Blaine, the gym leader of cinnabar island, gives it to you after whooping his butt.
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The 8 badges for Pokemon Red are: Boulder Badge, (Brock) Cascade Badge, (Misty) Thunder Badge, (Lt. Surge) Rainbow Badge, (Erika) Marsh Badge, (Sabrina) Soul Badge, (Koga) Volcano Badge, (Blaine) and Earth Badge. (Giovanni)
You will get the 7th Badge which is the Volcano Badge from Blaine, the Gym Leader of Cinnabar Island however you will need to receive the Key from within the Pokémon Mansion before you can unlock the Gym's locked door.
In Pokemon Red, the fifth badge is possessed by the Poison-Type Koga. The badge is named Soul Badge. It lets you use Surf outside of Battle.
In the game Pokemon Yellow you have to beat the leader of gym seven in order to win the Volcano Badge. The leader of this gym is named Blaine and he specializes in fire type Pokemon. To enter this gym you first have to get the secret key. This key is located in the building across from the lab.
You can obtain the 8th gym badge (the earth badge) in fire red from Giovanni in Viridian City.