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Issues: The judgment involves the following Issues:
1. Whether the assembly of magnetic tapes and plastic covers amounts to "manufacture" under Section 2(f) of the CESA 1944. 2. Whether the appellants are entitled to the grant of proforma credit under Rule 56A in respect of duty already paid. E/2540/84-D: The appeal arose from the order confirming the duty demand on blank cassette tapes cleared by the appellants for further use in manufacturing recorded cassette tapes. The Central Excise Department demanded duty on blank video cassette tapes arising from the assembly of plastic covers and magnetic tapes. The lower appellate authority upheld the duty demand, stating that a new product, video cassette tapes, emerged upon assembly, justifying the duty levy. The claim for proforma credit was disallowed due to non-compliance with Rule 56A procedure. C/284/88-D: This appeal challenged the duty demand on video cassettes without tape, contending they should be assessed as plastic articles. The demand was based on considering video cassettes without tapes as assessable to duty under Heading 92.01. The lower authorities rejected the appellants' argument, upholding the duty demand on video cassettes without tapes. Manufacture Issue: The Tribunal referred to legal precedents to define "manufacture," emphasizing the emergence of a new article with distinctive characteristics. It cited cases where assembly of items did not amount to manufacture, such as in the assembly of cycle parts. The Tribunal concluded that the assembly of video magnetic tape with plastic covers did not constitute manufacture, ruling in favor of the appellants. Proforma Credit Issue: While the Tribunal did not delve deeply into the proforma credit issue due to the manufacturing ruling, it noted that the duty liability for unrecorded video cassettes could be covered by available credit. The appellants' calculations showed that the duty liability could be fully adjusted using proforma credit, eliminating the need for cash payment towards duty. Conclusion: The Tribunal allowed Appeal No. E/2450/84-D with consequential relief, as the assembly of video magnetic tape with plastic covers was not considered manufacture. Appeal No. C/284/88-D was dismissed, affirming the duty demand on video cassettes without tapes.
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