Brand name on a component does not defeat exemption when it is cleared for incorporation, but separate spare-parts sale may trigger the bar.

Paragraph 7 of Notification No. 175/86-C.E. was held not to be attracted merely because flex cords cleared for use in Mixies and TVs carried the customers' brand names, since those marks belonged to the finished appliances and not to the cords as independent trade goods. The exemption therefore was not denied on that basis. Liability could, however, arise if verification showed that the cords were separately sold as spare parts in the replacement market, because such sale of the goods as such would bring the paragraph 7 bar into operation.

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Issues: Whether the benefit of Notification No. 175/86-C.E. could be denied under paragraph 7 where the goods were cleared with the customers' brand names affixed on cords fitted into Mixies and TVs, and whether liability could arise if such goods were separately sold in the replacement market as spare parts.

Analysis: The brand names "Sumeet" and "Sears" were found to relate to the customers' finished appliances, not to the flex cords as independent trade goods. On that footing, paragraph 7 was not attracted merely because the cords carried the customers' brand names and were supplied to the appliance manufacturers. The decisive factual inquiry was whether those cords were thereafter sold as spare parts in the replacement market, because sale of the goods as such would bring the para 7 mischief into play.

Conclusion: The exemption was not to be denied on the existing findings, but limited liability could arise to the extent the cords were shown, on verification, to have been sold as spare parts in the replacement market.

Ratio Decidendi: A branded component cleared for incorporation into another manufacturer's product does not attract the bar under paragraph 7 of Notification No. 175/86-C.E. merely because the brand belongs to the purchaser, but the bar may apply where the component is separately marketed as such in the replacement market.

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