GEORGE THANGIAH Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner is a proprietor of a Sound Recording studio. He filed an application before the third respondent for registration of a contract with his suppliers under the Project Imports (Registration of contracts) Regulations 1965. THE petitioner wanted to import certain items of machinery, which according to him were meant for the initial setting up of a unit to manufacture Master Tapes. He wanted to say that the activities of the Unit will bring it within the Industrial Plant so as to have the levy as per Heading 84. 66 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975 ). THE case for registration as above was advanced before the third respondent in the following lines as I could see from the order of the third respondent - "they have stated in the application that the equipment is being imported in connection with the initial setting up of a recording Studio for manufacture of Master Tapes in Bangalore . THE capacity of the Unit is stated to be 300 Master Tapes a year. THE Master. Tapes as recorded are required for the manufacture of pre-recorded cassettes and gramophone records and in addition they are also used by Commercial Broadcasting Radio stations of All india Radio, Television systems, as these sports, jingles and other programmes which are used in Commercial Broadcasting radio are produced in the Recording Studios. THEy have also explained in detail the processes involved in the recording of music by making use of the various equipment, which inter alia include recorders, Amplifiers, Head Phones, Mixing consoles etc. All of which contribute in perfect recording of either music or speech and ensure perfect reproduction of the original music. THEy had further stated that the material used for the manufacture of Master Tapes is a blank magnetic tape of 1'width which will be imported in length of 2500 feet in spools and the music is recorded on this type by multi-track recording in 8 tracks at a speed of 15' per second. After recording on this 1'tape, the music is transferred to a 2 track l/4" * separate tape for supply to the end-users. In these processes, various equipments would be simultaneously used for proper recording and blending of the music, so as to get a harmonious blending. THEy have claimed that all this activity constitutes manufacturing activity and cited various court judgments to support this contention. Further they had also cited the Department of Industries letter dated 26. 7. 1977, Electronic Commissioner's letter dated 16. 8. 1979 and Development Commissioner's (SSI's letter dated 26. 7. 1980 to impress their view point that theirs is a manufacturing Unit, entitled to the benefit of concessional customs duty as a project. THEy have also placed reliance on the endorsement by the Joint Chief Controller of imports and Exports for extending to them the benefit of assessment as a project import under Heading 84. 66 of the CTA 1975.'the third respondent rejected the application of the petitioner for registration of the contract under the Project Imports (Registration of Contracts) Regulations, 1965 by his order dated 12. 5. 1981. THE third respondent after adverting to the contention of the petitioner and the factual features urged in support of his case that the Unit for manufacturing Master Tapes will come within the meaning of an industrial Plant, opined the other way about. THE petitioner appeals to the second respondent, and the second respondent by order dated 4. 8. 1981, did not find reasons to take a different view and rejected the appeal. THE petitioner agitated the matter by way of a revision before the first respondent. THE first respondent dealt with the two revision applications; one by the petitioner and the other by one Messrs. Suresh Productions, Messrs Suresh Productions were involved in the production of sound tracks on the films already processed. THEir activities were apparently different from the activities of the Unit proposed to be set up by the petitioners. THE nature of the activities of messrs Suresh Productions as put forth by them was summed up by the first respondent as point No. 1 in his order as follows - "the imported machinery is required for the production of sound tracks on the films already processed. THE entire operation is done in a specially constructed theatre in sound proof studios and the sound recording is done synchronising the sequence that has come up on the file. THE contention is that without sound recording film production cannot be completed and that the recording of sound is an industrial activity and accordingly the studio will come in the category of an Industrial Plant" *

(2.) THE first respondent did not at all advert to discuss and consider the factual features relating to the activities of the Unit proposed to be set up by the petitioner's for manufacture of Master Tapes. THEre were two points in common both for the petitioner and of Messrs Suresh productions. THEy were discussed by the first respondent in his order. THE first respondent in his order gave reasons for not accepting the activities of messrs Suresh Productions as coming within the ambit of an Industrial Plant, to attract Heading 84. 66. Ultimately the first respondent rejected both the revision applications.