S. Venkatesan, Sr. Vice-President

1. These four appeals are directed against two orders of the Additional Collector of Central Excise, Bangalore. Three of the appeals, relating to the first three appellants, arise out of the Additional Collector's Order No. 39/83, dated 30-11-83. The appeal of M/s. Soundtrek arises out of the Additional Collector's Order No. 38/83, dated 24-11-83. Since the facts and charges in all the four cases are similar and all four appellants were represented by the same learned consultant, they were heard together and are being disposed of by this common order.

2. The charge basically was that the appellants were engaged in the recording of magnetic cassette tapes or spool magnetic tapes and thereby manufacturing goods falling under Item 59 of the Central Excise Tariff Schedule without obtaining Central Excise licences and without filing classification lists and price lists or paying duty. They were accordingly called upon to show cause why penalties should not be imposed upon them under Rules 9(2), 52A, 173Q and 226 of the Central Excise Rules; why the cassettes seized from their premises should not be confiscated; and why duty should not be demanded on the recorded cassettes/spools removed without payment of duty. (A show cause notice was also issued to M/s. Rashtrothana Parishat, to whom some recorded cassettes had been disposed of, asking them to show cause why the cassettes found with them should not be confiscated, but ultimately those cassettes were released without penal action).

3. All the appellants replied to the show cause notices. Basically their defence was that they were not aware that the work carried out by them amounted to manufacture of excisable goods and attracted Central Excise duty. Cadmas Internationals took the stand that they were only advertisement agents, and that they had got radio spots and sponsored programmes recorded by M/s. Prabhat Studios, and since they were not themselves the manufacturers, the question of their paying excise duty did not arise.

4. Apart from their basic defence, the appellants made various submissions on points of detail, relating to the number of cassettes involved, the correct value to be adopted etc.

5. All the appellants submitted that in the light of the explanations given by them there was no question of imposing penalties on them.

6. After granting a personal hearing the Additional Collector adjudicated the cases. He held that all the appellants (except Cadmas Internationals) had manufactured and cleared recorded cassettes/spools falling under Item 59-CET without obtaining a Central Excise licence, and had cleared them without payment of Central Excise duty and without complying with other necessary formalities, thereby contravening the provisions of Rule 9(1) and various other rules in the Central Excise rules. However on the question of penalty, he observed that the defence plea for a lenient view carried some weight considering the fact that the recording of cassettes was brought into the Central Excise net recently and therefore it was possible that the appellants might not have been aware of the position. The Additional Collector also dealt with the various submissions on the details of quantity, value etc. advanced by the respective appellants. In the end he demanded duty from M/s. Soundtrek, Prabhat Sound Studios and Prabhat Associates on the recorded cassettes/ spools held to have been removed by them without payment of duty; confiscated 52 recorded cassettes seized from Prabhat Associates, with an option to pay a fine of Rs. 150/-in lieu of confiscation; and imposed a penalty of Rs. 5,000 on M/s. Soundtrek, Rs. 8,000 on M/s. Prabhat Sound Studios, Rs. 2,500 on M/s. Prabhat Associates and Rs. 1,000 on M/s. Cadmas Internationals. It is against these orders of the Additional Collector that the present appeals are directed.

7. Appearing before us for all four appellants, Shri Sorani their learned consultant, raised before us a point which