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TMI Blog1997 (2) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... trial plant' to merit registration under project contract regulations. The learned Collector after considering the respondents' plea held that the imported equipment includes colour monitor, Microprocess based video editing system, Dual Channel-time based corrector with special effects, special effect generator, wave form monitor and others. According to the project report, the equipment is mainly utilised in producing video films. He has noted that the imported equipment is augmented by processing from indigenous source, video camera, VCR, audio mixer and other item available locally. He has noted that the recording is done on a blank video cassette. The learned Collector has held that the activity of converting the blank video cassette into a recorded one could be considered as industrial activity and the equipment utilised in such process as `Industrial Plant'. He has held that the activity involved in converting cassette into a recorded cassette would comprise a series of processes like shooting with video camera, mixing, dubbing, addition of special effect etc. with the help of imported equipments. He has held that these processes according to the definition given in the Notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deo recording does not fall within the definition of "Industrial Plant" in terms of Regulation 3 (a) of Project Import Regulation, 1986 which defines `Industrial Plant', he submits that the various processes carried out by the respondents could not result in a commodity as held by the Collector (Appeals). It is his submission that the activity falls within the exclusion clause of definition of "Industrial Plant". The activity falls within the term photographic studios, photographic film processing laboratories which comes within the exclusion clause of Regulation 3(a)(i) which reads as follows : - "(i) establishment designed to offer services of any description such as hotels, hospitals, photographic studios, photographic film processing laboratories, photocopying studio, laundries, garages, and workshops." 8. The learned DR relies on an unreported judgment rendered by the SRB in the case of Popular Video Audio Private Ltd. v. Collector of Customs, Madras, as per Order No. 229/1988. The learned DR relied on the ratio of the following judgments : - 1. Subhash Photographics v. Union of India -- 1992 (62) E.L.T. 270 (Bom.) 2. Subhash Photographics v. Union of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(f) of the Copy Rights Act, 1957, which defines "Cinematograph film" and submitted that the video film would fall within the said definition. It is his submission that the video software generation is totally different from the photography both in the technology involved and in the manner of its commercial use. Therefore, it is his submission that the activity cannot be considered as a service industry and is not excluded from the definition of "Industrial Plant". It is his submission that the equipments used by the respondents produces a distinct commodity which has got a market. Drawing our attention to the definition of Photography, the learned Advocate submitted that the photography is a process of producing a visible image upon a substance by the action of light or other radiant energy. It is his submission that on the other hand in video equipment video electro magnetic media is used to record the image in a video tape electromagnetically. In a video a series of picture are produced similar to cinematography, whereas in photography a single picture is produced. Thus the technology and processes involved in photography and videography are totally different and therefore, vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the First Schedule." 16. The Lower authorities had rejected the registration of the project on the ground that the Heading 9801 of the Customs Tariff Act excludes the importers' activity and it does not fall within the ambit of "Industrial Plant" as defined therein. We have noted the learned Collector's reasoning. The learned Collector has held that these activities brings into existence the commodity, which is vedio film and the said commodity has got a market. On a careful consideration, we have to hold that in the first place, the various process of recording video film would not result in a commodity, although it may have a market. The reason being that that recording is done on a video cassette and the said cassette can be re-used for recording by erasing the recorded material. Such recording of sound on duty paid magnetic tapes or spool magnetic tape has been held by Hon'ble Supreme Court in Prabhat Sound Studio to be not a process of manufacture and that no new substance emerges by such recording. In the present case also the process of recording pictures on a vedio film with the help of video camera is akin to recording sound on duty paid magnetic cassette tapes. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t's judgment rendered in the case of Prabhat Sound Studios. It has to be noticed that the judgment of the Madras High Court is in respect of pre-recorded cassettes by sound duplication on tape to tape and does not deal with the video recording. However, even this judgment gets overruled by the noted judgment of the Hon'ble Supreme Court. The learned DR has relied on the judgment of the SRB rendered in the case of Popular Video Audio Private Ltd. v. Collector of Customs, as per Order No. 229/1988, wherein the Tribunal has held that the activity of sound recording from the master tape to cassette tape is more of a trading activity and if the appellants were carrying on such an activity as a process of manufacture, they have not probabilised this claim of theirs by any material evidence, by way of their agreements for manufacture on a large scale, or the contract entered into by them to supply of duplicated cassettes on a large scale. The Tribunal has also noted that the appellants have not even mentioned what is the brand name under which the product they are to (sic.) is going to be marketed. The Tribunal has also noted that the other features referred to by the Collector (Appeal) v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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