Magnetic unrecorded tape hubs - Classification - [Tariff Item 59(3)] - Central Excise - 158/1/86-CX.4

Magnetic unrecorded tape hubs - Classification - [Tariff Item 59(3)] Letter No. 158/1/86-CX.4 Dated 8-5-1986 Government of India Ministry of Finance (Department of Revenue) New Delhi Reference to Boards' Tariff Advice No. 2/86, dated 4-2-1986, whereunder it was viewed that magnetic tape cut to size for sound recording on 'mother shell', which comes into existence at the intermediate stage during the process of manufacture of sound recorded cassette tapes, would be classifiable under sub-item (3) of the erstwhile Item 59 of Central Excise Tariff. 2. Representations were received to the effect that in the manufacture of recorded commercial cassettes, small scale manufacturers are employing a process in which no 'mother shell' in the form of unrecorded audio magnetic tape in casing, comes into existence at any stage and what in fact comes into existence at the intermediate stage is an audio magnetic unrecorded tape 'cut', wound on hubs, which is manually placed on the base panel of a mother shell of the recording or duplicating machine for recording, and, thereafter, the recorded tape 'cut' on hub is manually taken out from the duplicating machine, placed in a commercial cassette shell, and assembled as a sound recorded cassette tape, which is wholly exempt under sub-item (4) of the erstwhile Item 59 of CET. In this operation, the base panel is stated to be repeatedly used for recording purposes, unlike the blank shell of a commercial cassette in which the magnetic tape on hubs is housed and cleared for sale. 3. The matter has since been examined by the Board. The Board is of the view that, where a process of the type described above is employed in which no mother shell enclosed in a casing comes into existence at any stage in the course of manufacture, the classification of the producl under sub-item (3) of the erstwhile Item No. 59 of CET may not be attracted. For such a process of manufacture, Board's Tariff Advice No. 2/86, dated 4-2-1986 may not be relevant as the said tariff Advice refers to coming into existence of mother shell in which the unrecorded tape cut to size is cased, which is similar to the casing of a commercial cassette. 4. The Board desires that necessary action may be taken by the Collectors to settle the pending disputes on classification keeping in view the above guidelines, but after due verification of the process of manufacture employed by the manufacturers. 5. The Board is further of the view that under the new Excise Tariff the problem would not appear to exist in view of the fact that unrecorded tape whether in spools or in cassette form are covered by a single sub-heading 8523.00 only, and consequently, the excise duty would be attracted at one stage only.