Decided on January 29,1998

Balaji Audio And Video Co. (P) Ltd. Appellant


M.Ramakrishna, Chairman - (1.) AGGRIEVED against the orders passed by the Appellate Deputy Commissioner (CT), Secunderabad Division, Hyderabad Dated 13 -6 -1996 in appeal No. 761/95 -96 filed against the assessment orders of the Commercial Tax Officer, Abids Circle, Hyderabad, in G.I. No. 2301/93 -94, dated 6.2.1996, the appellant has come up with the present appeal before us. Though the appellant disputed the rate of tax on Rs. 15,91,705/ - turnover as seen from the grounds of appeal, the appellant disputed the very levy on that turnover. The appellant purchased the blank cassettes from the local registered dealers and arranged for its recording and certain types of songs like bhajans etc., by paying studio charges, Orchestra charges got the programme title printed over the blank cassettes and clad it in plastic covers inlayed with inlay cards giving the printed details of the programme recorded in the cassettes and sold it as a pre -recorded cassettes. It claimed exemption on the turnover on the ground that blank cassette and the pre -recorded cassettes constitute the same commodity. The exemption was disallowed on the ground that the pre -recorded audio cassettes sold by the appellant were commercially distinct and different commodities from the blank cassettes purchased by it. The A.D.C. dismissed the appeal on the same ground that blank cassette is one commodity and recorded cassette was another commodity of commerce. However, he remanded the matter to the assessing authority to levy tax at the concessional rate of tax of 2 per cent for the period from 1.4.93 to 31 -3 -93 and 4 per cent for the period from 1 -8 -93 to 31 -3 -94. Aggrieved against the same, the present appeal has been filed.
(2.) THE learned Authorised Representative reiterated the contentions urged before the lower authorities and contended inter alia that the only process undertaken by them was recording of songs and programmes in the blank audio cassettes which did not alter the basic character and identity of the cassettes into a new and distinctive commodity. The recording so undertaken is not irreversible and could be easily erased and used for fresh recording. The activity of recording songs and programmes on blank audio cassettes is not at all an activity of manufacture and that such activity did not bring into existence a commodity distinct and different from blank cassettes. The learned Authorised Representative has relied upon the recent decision of the Bombay High Court reported in 98 STC page 403 in the case of Commissioner of Sales Tax, Maharashtra State, Bombay v. Rajshree Electronics.
(3.) THE learned Authorised Representative has also relied upon the following decisions: (i) : (1989) 73 STC 346 (Aryavaidya Pharmacy and Another v. State of Tamilnadu); Sales Tax (Law) Board of Revenue (Taxes), Ernakulam Vs. (ii) : (1982) 46 STC Page 63 in Deputy Commissioner, Sales Tax (Law), Board of Revenue(Taxes) v. Pio Food Packers (SC). (iii) : (1986) 63 STC 239 in Sterling Foods v. State of Karnataka and Others. (iv) : (1978) 41 STC 394 in Alladi Venkateshwarlu and Others v. Government of Andhra Pradesh and Another. (v) : (1995) 21 APSTJ p. 180 in State of A.P. v. Narsing Industries; and (vi) : (1997) 104 STC 44 in State of A.P. v. Apex Agencies.;

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