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TMI Blog1999 (11) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant is indulging in a mass production of such pre-recorded audio cassettes. It is a manufacturing activity. The appellant's activity cannot be compared with a person sitting in the market extending facility of recording any demanded music or sounds on a blank audio cassette brought by or made available to the customer, which activity may be called a service. The Tribunal was not right in equating the appellant's activity with photo-processing and holding the appellant a service industry. Thus the Assistant Collector of Customs, Calcutta was not justified in rejecting the appellant's application for registration of the contract dated 6-11-1989 on the ground on which it did. - 134 of 1991 - - - Dated:- 25-11-1999 - S.P. Bharucha, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fer equipment and electric sound E.S.1850 cassette loaders and spare parts. 3. In exercise of the power conferred by sub-section (1) of Section 25 of the Customs Act, 1962 on 26-11-1983 the Government of India issued a notification granting an exemption from payment of Customs duty on goods falling under Heading No. 98.01 of the First Schedule to the Customs Tariff Act, 1975 when imported into India for the initial setting up of an industrial unit for the manufacture of electronic equipment or the substantial expansion of an existing industrial unit manufacturing electronic items. 4. Heading No. 98.01, referred to in the abovesaid notification reads as under :- "98.01 9801.00 All items of machinery including prime movers, instrument ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Collector of Customs refused to register the appellant's contract dated 6-11-1989. Appeals preferred successively before the Collector (Appeals) and Central Excise Gold Control and Appellate Tribunal having failed, the aggrieved appellant has come up to this Court filing this appeal under Section 130E of the Customs Act. 6. A perusal of the order of the Tribunal dated 17-9-1990 shows that in the opinion of the Tribunal the appellant industry was engaged in the activity of duplicating music recorded on audio cassettes which was a service activity akin to photo-processing industry and could not be called a manufacturing activity and therefore the appellant was not entitled to have the contract registered under Project Import Regulations, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment of the goods falling under the said heading No. 98.01 on or before their importation shall apply in writing to the proper officer at the port where the goods are to be imported or where the duty is to be paid for registration of the contract or contracts as the case may be." 9. It is not disputed that the machine forming subject matter of the contract in question enables duplicating of audio cassettes from the mother cassette. The mother cassette is loaded in the machine and on being operated the machine multiplies the audio recording on several audio cassettes of a specified number at a1high speed. The blank audio cassettes are converted into pre-recorded audio cassettes. This activity is systematically carried on large scale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T. 353 (S.C.). It was held that if there should come into existence a new article with a distinctive character and use, as a result of the processing, the essential condition justifying manufacture of goods is satisfied. The following passage in the Permanent edition of "Words and Phrases" was referred to with approval in Delhi Cloth and General Mills - 1977 (1) E.L.T. (J 199) (S.C.) = AIR 1963 SC 791; 795 :- "Manufacture Implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation; a new and different article must emerge having a distinctive name, character or use." 13. In a series of decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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