1998 (8) TMI 214 - AT - Central Excise

Summary

Issues:
1. Request for adjournment based on pending matter in Supreme Court.
2. Challenge to Order-in-Appeal regarding approval of price lists for recorded video tapes.
3. Disallowance of deduction of royalty charges in Orders-in-Appeal.
4. Legal question on excisability of recorded video tapes.

Issue 1 - Request for Adjournment:
The common appellant requested an adjournment citing a pending matter in the Supreme Court. However, the Tribunal refused the adjournment, emphasizing that the pendency of a matter in the Supreme Court may not always justify adjournment, especially when there is a relevant decision that could aid in deciding the legal controversy. The appellant was unrepresented, and the Tribunal proceeded with the hearing.

Issue 2 - Challenge to Order-in-Appeal:
The appeals challenged the Orders-in-Appeal related to the approval of price lists for recorded video tapes. The Assistant Collector approved the price lists with deductions for various taxes and expenses, including interest on bad debts and transit insurance. However, the Collector (Appeals) set aside the Assistant Collector's orders and directed deductions only for the tax element, disallowing other deductions. The Tribunal found the Collector (Appeals) view on factory gate price applying to clearances to depots incorrect, as different regions had varying tax incidences, justifying different price lists.

Issue 3 - Disallowance of Royalty Charges:
The controversy involved the disallowance of deduction of royalty charges from the assessable value of recorded tapes. The Tribunal held that if the appellant manufactured blank tapes, recorded sound or image on them, and sold the recorded tapes, the assessable value should include all elements contributing to the tape's value. Royalty charges, being part of the value enhancement through recording, should not be deducted from the assessable value.

Issue 4 - Excisability of Recorded Video Tapes:
The legal question centered on whether the process of recording blank video tapes constitutes manufacturing. The Tribunal referred to a previous decision where it was held that recording sound on blank tapes does not amount to manufacture as it does not create a new product. The Tribunal also cited a Supreme Court decision regarding the excisability of recorded tapes, emphasizing that duty is payable on blank tapes, not on recorded ones unless a new excisable product is created through the recording process.

In conclusion, the Tribunal confirmed the non-deductibility of royalty charges, remanded the decision on whether the cleared articles constituted new excisable products, and directed duty payment if blank video tapes were manufactured and recorded. The impugned orders were set aside, and the cases were remanded for fresh adjudication based on the Tribunal's findings.