Recording on blank cassettes was held not to create manufacture, so pre-recorded video cassettes were not excisable.

Recording video images and sound on blank cassettes was treated as not amounting to manufacture because no new product emerged from the recording process. Applying the Supreme Court principle that recording sound on duty-paid magnetic cassettes does not create a distinct commodity, the Tribunal held that the same reasoning extended to video cassettes, as the process and medium were materially identical apart from tape size. The resulting pre-recorded video cassettes were therefore not regarded as excisable commodities, and duty valuation was unnecessary.

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Issues: Whether the recording of video images and sound on blank cassettes amounted to manufacture, and whether the resulting pre-recorded video cassettes were excisable commodities liable to duty.

Analysis: The Tribunal followed the Supreme Court's ruling that recording sound on duty-paid magnetic cassettes does not result in manufacture because no new product emerges. It held that the same principle applied to video cassettes, as the process and medium of recording were materially identical apart from the size of the tape. On that basis, the product made by the respondent was not treated as an excisable commodity, making valuation for duty unnecessary.

Conclusion: The issue was decided in favour of the assessee and against the Revenue; the manufactured video cassettes were not held to be excisable.

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