1991 (7) TMI 212 - AT - Central Excise

Summary

Issues:
1. Confirmation of demand of duty on video cassettes.
2. Imposition of personal penalty on the appellants.
3. Interpretation of exemption under Notification No. 102/82 for video cassettes intended for rental to libraries.

Analysis:
The judgment by Appellate Tribunal CEGAT, BOMBAY involved an appeal against an order confirming a duty demand and imposing a personal penalty on the appellants for 163 video cassettes. The appellants had claimed exemption under Notification No. 102/82, stating the cassettes were not for sale but for rental to cassette libraries. The authorities, however, found evidence suggesting the cassettes were intended for sale, leading to the denial of the exemption.

During the proceedings, the authorized representative of the appellants argued that the cassettes were not meant for sale or promotion of sale, falling within the exemption criteria of the notification. On the contrary, the Department's representative contended that the cassettes were part of commercial transactions, making them ineligible for exemption. Reference was made to a previous decision involving audio cassettes to support the argument that the transaction was commercial in nature, thereby disqualifying it from the exemption.

The Tribunal, after considering the submissions and evidence, concluded that the appellants had purchased video rights, recorded the cassettes, and supplied them to video libraries for rent, constituting a commercial transaction. The Tribunal emphasized that the nature of the transaction was commercial, different from the case involving audio cassettes in the precedent cited. Consequently, the Tribunal rejected the appeal, stating that the benefit of the exemption notification did not apply in this commercial context.

In summary, the judgment affirmed the duty demand and personal penalty, ruling that the appellants' transaction involving video cassettes for rental to libraries constituted a commercial activity, thereby disqualifying them from the exemption under Notification No. 102/82. The decision was based on the distinction between commercial transactions and non-commercial activities, as evidenced by the nature of the appellants' dealings with the cassettes.