1992 (9) TMI 232 - AT - Central Excise

Re-recording on blank video cassettes ruled as manufacturing under excise duty, tribunal affirms decision

The tribunal held that re-recording on blank video cassettes, despite prior content, constituted manufacturing. The inclusion of video cassettes in the ... Manufacture Issues:Excisability of recording of blank video cassettes.Analysis:The appellants engaged in recording feature films/programs on blank video cassettes under a license, seeking a refund for the activity. The argument was that recording sound and image on blank cassettes does not constitute manufacturing, as it involves transferring existing content from U-matic cassettes. Reference was made to previous tribunal and Supreme Court decisions to support the claim that re-recording does not create a new product. The contention was that since the original owner already recorded the content, re-recording does not amount to manufacture.The department, represented by a JDR, argued that once an item is included in the tariff schedule, it becomes excisable regardless of whether the process qualifies as manufacturing. They contended that re-recording should be considered manufacturing, citing a previous tribunal order in support of their position.The central issue was whether re-recording blank video cassettes constitutes manufacturing. The relevant tariff heading covered recorded media for sound or other phenomena, including images. The tribunal analyzed the legislative intent behind excisability and referred to a Supreme Court judgment to explain that the inclusion of an item in the tariff schedule makes it liable for excise duty, irrespective of strict manufacturing definitions. Therefore, the argument that re-recording does not amount to manufacture was dismissed.The tribunal emphasized that the specific mention of video cassettes in the tariff heading, along with the phrase 'other similarly recorded phenomena,' encompassed recording images. The analogy of printing and reprinting books was used to illustrate that re-recording falls under the definition of recording. The tribunal also noted that the previous tribunal decision did not consider a relevant Supreme Court judgment, which clarified the excisability of re-recording activities.Ultimately, the tribunal concluded that re-recording on blank cassettes, even if the content was previously recorded, constituted manufacturing. The legislative inclusion of the product in the tariff schedule made it dutiable, regardless of the repetition of recording. Therefore, the appeal was dismissed based on the understanding that re-recording blank video cassettes amounted to manufacturing under the excise laws.