Re-recording video cassettes treated as manufacture, and trade use defeats exemption meant for recorded articles not for sale.

Re-recording blank video cassettes from already recorded cassettes was treated as manufacture under the relevant excise provision, so the activity attracted excise consequences. The Tribunal also held that the exemption in Notification No. 102/82 applied only to recorded articles not meant for sale; because the re-recorded cassettes were used for trade purposes, the exemption was unavailable. On that basis, the order under challenge was set aside and Revenue succeeded.

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Issues: (i) Whether recording of blank video cassettes from already recorded video cassettes amounts to manufacture. (ii) Whether the respondents were entitled to the benefit of Notification No. 102/82 dated 28-2-1982.

Issue (i): Whether recording of blank video cassettes from already recorded video cassettes amounts to manufacture.

Analysis: The Tribunal followed its earlier decision holding that the process of re-recording video cassettes from already recorded video cassettes answers the description of manufacture under the relevant excise provision.

Conclusion: The activity amounted to manufacture, in favour of Revenue.

Issue (ii): Whether the respondents were entitled to the benefit of Notification No. 102/82 dated 28-2-1982.

Analysis: The notification granted exemption to recorded articles not meant for sale. Since the re-recorded cassettes were used for trade purposes, the condition of the notification was not satisfied.

Conclusion: The respondents were not entitled to the exemption, in favour of Revenue.

Final Conclusion: The impugned order was set aside and the appeal succeeded.

Ratio Decidendi: Re-recording of video cassettes from already recorded cassettes constitutes manufacture, and exemption intended only for recorded articles not meant for sale is unavailable when the goods are used for trade purposes.

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