Excisability and classification of video cassette plastic housing upheld, while penalty on the respondent was set aside.

Plastic housing for video cassettes without magnetic tapes was treated as excisable goods and classified under sub-heading 3926 of the Central Excise Tariff Act, following earlier Tribunal authority; the contrary view of the Commissioner (Appeals) was rejected. Penalty under Rule 209A of the Central Excise Rules was not sustainable against the respondent because the goods were manufactured and seized from the job worker, who was treated as the manufacturer on the facts found. The classification issue thus favoured Revenue, while penalty relief remained with the respondent.

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Issues: (i) Whether plastic housing for video cassettes without magnetic tapes is excisable and classifiable under sub-heading 3926 of the Central Excise Tariff Act. (ii) Whether penalty under Rule 209A of the Central Excise Rules could be sustained against the respondent.

Issue (i): Whether plastic housing for video cassettes without magnetic tapes is excisable and classifiable under sub-heading 3926 of the Central Excise Tariff Act.

Analysis: The Tribunal relied on its earlier decision holding that plastic housing for video cassettes without magnetic tapes is excisable goods and falls under sub-heading 3926. On that basis, the contrary finding of the Commissioner (Appeals) on classification could not stand.

Conclusion: The goods were held to be excisable and classifiable under sub-heading 3926, in favour of Revenue.

Issue (ii): Whether penalty under Rule 209A of the Central Excise Rules could be sustained against the respondent.

Analysis: The goods were manufactured by the job worker and were seized from that job worker. Since the job worker was treated as the manufacturer of the impugned goods, duty liability and consequential penal consequences were not fastened on the present respondent on the facts found.

Conclusion: The penalty on the respondent was not sustainable and was set aside, in favour of the respondent.

Final Conclusion: The classification finding was reversed in favour of Revenue, but the penalty relief remained undisturbed, resulting in dismissal of the appeal overall.

Ratio Decidendi: Goods manufactured by a job worker are to be assessed against the manufacturer who actually produces them, while plastic housing for video cassettes without magnetic tapes is excisable and classifiable under sub-heading 3926.

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