TMI Blog1997 (7) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... ds besides manufacturing records as aforesaid for the above mentioned customers. Such records for the said two customers were cleared by the respondent on payment of duty levied on the value thereof which was based on the cost of raw materials provided by the respondent and the charges collected for the job work of manufacture of records and the show cause notices were issued alleging that the customers being the owners of the copyright of the music contents of the master tape and the respondent being required to sell the entire records produced by them using such master tape to the said customers only and not being free to sell them to any other buyer, the customers had hired labour in terms of Section 2(f) of Central Excises and Salt Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent as well as to the two customers it was averred that in the manufacture of gramophone records, the required programme is prepared and recorded on the master tape which is then transferred to the records. The respondent was given such master tape developed by the two customers who were holding the copyright for the music therein. Respondent company was manufacturing their own records where they had their copyright to deal in, where the development of the master tape was being attended to by them on their own. Such records were being sold by them at higher prices as compared to the prices at which they were selling the records to the two customers in question, using the latter s master tapes. As the respondent on being asked by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reiterated the contentions raised in the appeal. The respondent was not present despite notice of hearing. We are accordingly deciding the appeal on merits after considering the facts as have come out in the orders of the lower authorities and the appeal memorandum. 7. In the manufacture of gramophone records, the preparation of master tape is an important and vital process without which it is not possible to produce the records. The respondent company while manufacturing the records in question on the orders of the two customers, using the master tapes received from them, is also manufacturer of gramophone records using master tape developed by it, for which it was holding absolute right. It was selling such records at prices fixed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the amount, to be added to the price declared by the assessee, the order under appeal which was in favour of the assessee was not interfered with. 9. The Tribunal was informed at that time that the Supreme Court had held in a recent case that recording of blank cassette did not amount to manufacture. The said judgment of the Supreme Court has since been reported in 1996 (88) E.L.T. 635 in Prabhat Sound Studios v. Additional Collector of Central Excise. The Supreme Court took note of the Tariff sub-Item 59(3) covering cassette tapes for sound recording and 59(4) for sound recorded cassette tapes. It had been held by the Judicial Member of the Tribunal in the case that led to the appeal in the Supreme Court that recording on tapes was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivity. Duty was being paid on such records. The only dispute was about the value on which duty was payable. The ruling in respect of recording of duty paid cassette tapes is distinguishable in view of the difference in the respective Tariff entries. We are accordingly of the view as stated earlier that the cost of the master tape has to form part of the value of records manufactured from them. The national basis for quantifying the amount to be added to the price declared by the respondent is available in the shape of the declared prices for the records manufactured by the respondent from own master tape. We find that in page 3 of the Assistant Collector s order that there was no distinction between records of different languages as also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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