S.V. Maruthi, Member (J)

1. The short point for consideration is whether the conversion by way of slitting and cutting of jumbo rolls of Video Magnetic Tapes into Pancakes amounts to manufacture as defined under Section 2(f) of the Central Excises Salt Act.

2. The appellants imported Video Magnetic jumbo rolls of about 10,000 ft. in length and 13 inch in width. These jumbo rolls are subjected to the process of slitting for making smaller rolls known as 'Pancakes' having approximately 12.65 mm width and 10,000 ft. in length. The process of slitting according to the appellants, is by machine known as slitting machine. After slitting the product, it is known as 'Pancake'. An application was made to the Assistant Collector for issue of a certificate certifying that the process of slitting of Video Magnetic Tapes into Pancakes from jumbo rolls is exempted from the central excise control. Therefore, no licence is required. The Assistant Collector rejected their request on the ground that the process of slitting of jumbo rolls into pancakes amounts to manufacture and therefore, no certificate as prayed for can be issued. On appeal, the Collector confirmed the order of the Assistant Collector. Hence the appeal before us.

3. The relevant tariff heading reads as follows :--

Tariff Heading 8523.13:

"Video Tapes in the form of jumbo rolls, pancakes, hubs or reels, before amendment the Tariff Heading 85.23 read as "Prepared unrecorded media for sound recording or similar recording of other phenomena, other than products of Chapter 37".

A reading of the tariff entry shows video tapes in any form whether it is in the form of jumbo rolls or pancakes or mini-pancakes, falls under Tariff Entry 8523.13. The Assistant Collector held that from a reading of the tariff entry, "it can be considered that there is specific entry for each of the products such as jumbo rolls, pancakes, mini-pancakes in the new tariff though all the items are falling under the same Chapter sub-heading No. 8523.13. They are distinct from each other and therefore, separately excisable. The Collector held that the further sub-divisions on the basis of forms of video tapes by distinct enumeration of various forms of video tapes, the conversion of one form into another would amount to manufacture. Therefore, according to him, slitting of jumbo rolls into pancake amounts to manufacture and the appellants are not entitled to the certificate claimed for.

4. The main contention of Shri Jain on behalf of the appellants is that slitting of jumbo rolls does not amount to manufacture, though jumbo rolls and pancakes are distinctly mentioned under Tariff Item 8523.13. Since there is no change in the characteristics of the film except a change in the width namely, the width is reduced from 13 inches to 12.65 mm, the process of slitting does not amount to manufacture. The fact that the tariff item differently describes or identifies the jumbo rolls and pancakes does not make them distinct and separate products calling for levy of duty at every stage. In support of the contention that slitting and cutting of jumbo rolls does not amount to manufacture he relied upon the judgment of the Madras High Court in Computer Graphics (P) Ltd. v. U.O.I. -MANU/TN/0251/1990 : 1991 (52) E.L.T. 491 and C.C. v. Hindustan Photo Films -MANU/CE/0152/1990 : 1991 (52) E.L.T. 301 . In support of the contention that specific enumeration in the tariff entry does not make the goods different goods, he relied upon the judgment of the Supreme Court in A. Venkateswarlu v. Govt. of Andhra Pradesh - MANU/SC/0333/1978 : AIR 1978 SC 945 and Basheer Ahmed v. C.C.E. and Konark Steel Industries and Anr. v. Sales Tax Officer - 1969 STC 187 . He also contended that a change in physical form does not amount to manufacture. He also brought to our notice the trade notices issued by the Office of the Collector of Central Excise, Bombay Rajkot stating that cassette tapes for sound recorded (Blank Cassette) would not attract duty