R. C. Lahoti, J. - (1.) The appellant is a company engaged in manufacturing electronic goods. It is a scheduled industry under the First Schedule of the Industrial (Development and Regulation) Act, 1951. One of the products of the appellants company is pre-recorded audio cassettes which is excisable under Chapter Heading 8524.22 of the Central Excise Tariff Act, 1985 which reads as audio cassettes. Though the appellant is not required to pay central excise duty on pre-recorded cassettes by virtue of exemption provided by Notification No. 117/90 dated 16-5-90 nonetheless it files classification lists in respect of such pre-recorded audio cassettes consistently with the statutory obligation cast on the appellant. Under the industrial licence granted to the appellant by the Government of India in the year 1977 for manufacture of pre-recorded audio cassettes the licensed capacity as endorsed was 1.2 million pre-recorded cassettes per annum. The capacity was increased from time to time by expanding the same under the licences issued by the Government of India. In April 1987 the existing capacity of the appellant company was 10 million audio cassettes which was permitted by the Government of India to be increased to 30 million pre-recorded audio cassettes per annum.
(2.) The appellant placed two orders respectively dated 6-11-1989 and 21 -12-1989 on M/s. Audiomatic Corporation, New York for import of tape to tape sound transfer equipment and electric sound E. S. 1850 cassettes loaders and spare parts.
(3.) In exercise of the power conferred by sub-section (1) of Section 25 of the Customs Act, 1962 on 26-11-1983 the Government of India issued a notification granting an exemption from payment of customs duty on goods falling under Heading No. 98.01 of the First Schedule to the Customs Tariff Act, 1975 when imported into India for the initial setting up of an industrial unit for the manufacture of electronic equipment or the substantial expansion of an existing industrial unit manufacturing electronic items.;