Customs, Excise and Gold Tribunal - Delhi
Collector Of Central Excise vs Hindustan Reprographics Ltd. on 29 March, 1993
Equivalent citations: 1993(47)ECR405(TRI.-DELHI)
ORDER G.P. Agarwal, Member (J)
1. This appeal is directed against the impugned Order in Appeal passed by the Collector of Central Excise (Appeals), New Delhi.
2. Shortly put the facts of the case are that, the respondents M/s Hindustan Reprographic Ltd. filed their Classification List dated 6.4.1984 in respect of Micro Film Reader Printer (for short MFRP) manufactured in their factory for approval wherein they have classified the above goods under T.I. No. 33-B (sic) and claimed exemption from duty under Notification No. 51/70-CE dated 1.3.1970, as amended, being not covered under Schedule annexed to the Notification. On receipt of the same, a Show Cause Notice dated 23.5.1984 calling upon them to show cause as to why MFRP manufactured in their factory be not classified under T.I. 33-B (sic) of the Central Excise Tariff, was issued. The respondents contested the Show Cause Notice inter alia contending that their said product, namely, MFRP is neither a reproducing machine nor a photocopying machine. However, the Assistant Collector negatived the said defence of the appellants and held that machine in question (MFRP) have both the functions that of reproducing and photocopying machine, as mentioned in Schedule annexed to the Notification No 51/70-CE. On these findings, he approved the said Classification List classifying MFRP under Heading 33-D without giving them exemption benefit under Notification No. 51/70-CE. Against the said order of the Assistant Collector, the respondents filed their appeal before the Collector (Appeals), New Delhi. Before him, the classification of the said product under T.I. No. 33-D was not contested by the respondents and the only point raised before him was that they were entitled for the benefit of the said Notification No. 51/70-CE. The Collector (Appeals) agreed with the respondents and extended the benefit of the said Notification No. 51/70-CE to their said product, namely, MFRP in question. Hence the present appeal by the Revenue.
3. Arguing on behalf of the appellants, Shri S K. Sharma, earned JDR submitted that the subject product, namely. MFRP integrates the function of a Micro Film Reader and a Printer contained within itself. It is used to perform the function of reproducing machine. It reproduces the image recorded on a micro film on a viewing screen. It also has the capability of printing the impressions recorded on the micro film. The catalogue of MFRP indicates that "To actively use this microfilmed engineering drawing, the critical item is the reader-printer. An incredible marvel of the technology of the future. The reader-printer enables you to view the drawing in its actual size-even magnify a small section of it-when necessary. For copies, the printer gets to work...turning out faithful prints at the touch of a button. Each print an exact copy of the original." In this background, it was contended by him that the product MFRP has the integrated function of the Micro Film Reading and Printing. It was stressed by him that the Collector (Appeals) in his impugned order has also admitted that a reproducing machine falling under SI. No. 13 of the Schedule annexed to Notification No. 51/70-CE is the one used in computers or data processing industry and is a machine operated with Punched Cards but the learned Collector (Appeals) erred in limiting his finding to 'Punched-Card Technology' only. A reproducing machine can be any machine which reproduces any recorded information/data. It is an admitted fact that the product MFRP reproduces on a viewing screen any information recorded on a micro film. Functionally, it is covered only as a reproducing machine falling under SI. No. 13 of the Schedule. The product MFRP in addition to its function as reader-printer can also be made use of indirectly for the purpose of photocopying. First an image or a print is microfilmed with the help of an independent device, such as, a camera and then this microfilmed print or image is reproduced as a print or an image with the help of MFRP. Therefore, though the product MFRP does not directly perform the function of photocopying and accordingly cannot be said to fall under SI. No. 28 of the Schedule annexed to the Notification, it is, however, covered within the ambit of the explanation given at the bottom of the Notification No. 51/70-CE dated 1.3.1970, as amended, and therefore, the benefit of Notification No. 51/70-CE cannot be extended to the subject product, namely, MFRP. In reply, Shri V. Sridharan, learned Counsel for the respondents, while supporting the impugned Order-in-Appeal submitted that it would be wrong to say that MFRP has a characteristic of reproducing machine and took us through the definition of "Reproducer" as given in McGraw Hill Dictionary of Scientific and Technical Terms and also to the Explanatory part of the Note for the reproducing machine given in BTN at page 896. He also took us through the said Notification No. 51/70-CE and cited the case of Blue Star Limited v. Union of India 1980 ELT 280 (stress was laid on paragraph 20 of the Report) and Rohit Pulp and Paper Mills Ltd. v. Collector of Central Excise .
4. We have considered the submissions.
5. It is not in dispute that Micro Film Reader Printer manufactured by the respondents was classifiable under Tariff Item 33-D at the relevant time. The only dispute confined in the instant appeal is regarding the interpretation and availability of exemption Notification No. 51/70-CE dated 1.3.1970, as amended from time to time. The Assistant Collector has rejected the claim of the respondents regarding the benefit of the said Notification No. 51/70-CE whereas on appeal the Collector (Appeals) has extended the benefit of the said Notification No. 51/70-CE to the respondents.
6. The said Notification No. 51/70-CE, as amended, so far as relevant reads as under:
In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts office machines and apparatus falling under Item No. 33D of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), other than those specified in the Schedule hereto annexed from the whole of the duty of excise leviable thereon:
THE SCHEDULE 1 to 12. xxxxxxxxxxxxxxxxxxx
13. Reproducing machines.
14 to 27. xxxxxxxxxxxxxxxxxxx
28. Photo copying machines.
29, 29 A & 30 xxxxxxxxxxxxxxxxxxxx Explanation.-In the Schedule to this notification, office machine or apparatus Includes an office machine or apparatus which may, in addition to Its own function be used for performing the functions of two or more machines or apparatus specified therein.
7. The Assistant Collector has held that, a study of catalogue for the same machine issued by the respondents reveals that the machine have a characteristic of the Reproducing Machine. An extract from the catalogue itself reflects the position Unlike diazoprints which have to be reproduced in the same size, you can make a small print of just relevant portion of the drawing, from a microfilm. Since any drawing can be converted on the Micro Films which can be reproduced or screened on the screen provided in the machine. This leads to the conclusion that the machine has very characteristic of reproducing machine. The respondents have themselves stated that their machine may be termed as photo copying machine, as photocopy of the drawing can be obtained from the same. The nature of the photocopying machine, as discussed in Chapter 90.10 of the B.T.N. relating to the photocopying apparatus interpreting an optical system, printing of copies of original (Micro Films, Opaque documents etc.) in actual sized or in-large or reduced, resembles with the quality, property and specifications of the MFRP. Hence the machine in question have both the functions that of reproducing and photocopying machines, as mentioned in Schedule annexed with the Notification No. 51/70-CE dated 1.3.1970, as amended. In terms of the explanation given below the Schedule to the above said Notification and in view of the above discussion, the respondents are not entitled for exemption under the said Notification in respect of their product MFRP.
The Collector (Appeals), however, while setting aside the said findings of the Assistant Collector extended the benefit of the said Notification to the respondents, observing that, the reproducing machine, referred to in the Schedule to the said Notification, is one used in computer industry and is a punch card machine that reads punch card, duplicates the same on another punch cards. It is essentially a machine used in data processing or computer industry and, therefore, in his view the reproducing machine, mentioned at Serial No. 13 of the Notification, covers and denotes a completely different equipment and does not cover the subject product, namely, MFRP. He also held that the subject product, namely, MFRP, is also not a photo copying machine, as mentioned at Serial No. 28 of the Schedule to the Notification. He further held that the Explanation to the Schedule of the said Notification is also not applicable.
8. On going thorough the catalogue of the subject product, namely, MFRP, we find that the subject product integrates the function of a Micro Film Reader and a Printer contained within itself. For ready reference the relevant portion of the catalogue may be reproduced as under:
What is engineering micrographics...and how does it work for you? Micrography begins as a simple photographic process. Your engineering drawing is first filmed on 35 mm micro film with a special camera-almost as easily as you would take an ordinary photograph. The film is then processed to make a negative.
Now your engineering drawing has been reduced to just one frame of a 35 mm film. A miniaturised, faithful-and really permanent-copy of the original. So compact... you'd hardly believe it.
To actively use this microfilmed engineering drawing, the critical item is the reader-printer. An incredible marvel of the technology of the future. The reader-printer enables you to view the drawing in its actual size-even magnify a small section of it when necessary. For copies, the printer gets to work...turning out faithful prints at the touch of a billion. Each print an exact copy of the original.
Perhaps no other invention in history has saved the drawing office as much time, effort and money...as the engineering micrographic system.
Today, all over the world it is fast replacing conventional methods of handling, retrieving, reviewing, updating and reproducing almost any kind of engineering drawing.
(Emphasis Supplied)
9. In view of the above, we have no hesitation in holding that the subject product, namely, MFRP is a reproducing machine and falls under Serial No. 13 of the Schedule. Reliance placed by the learned Counsel on the Explanatory Notes to the Brussels Nomenclature, 1955, page 896, wherein under Heading 84.53 which deals with statistical machines of a kind operated in conjunction with punched cards, Reproducing machines has been defined as 'machines operated by a master punched card, reproduce a large number of similarly punched cards containing all or certain of the holes on the original master card', has no relevance in view of the catalogue of the respondents, as extracted above. Moreover, it is settled law that while interpreting the exemption Notification Brussels Nomenclature or its Explanatory Notes cannot be made basis even for classification purposes under Central Excise prior to 28.2.1986 because the Excise Tariff, at that time, was not framed on the basis of BTN or Customs Tariff. See Haldyn Glass Works Pvt. Ltd. v. M.L. Badhwar 1980 ELT 291 (Bom) : 1989 (23) ECR 311 (Bombay) and Saurashtra Chemicals, Gujarat v. Collector of Customs, Bombay 1983 ELT 1182 : 1983 ECR 1504D (Cegat SB-D). Sunrise Electric Corporation v. Collector of Customs, Bombay 1983 ELT 2465 : 1983 ECR 1762D (Cegat SB-D). In the case of Collector of Customs v. O.E.N. India Ltd. and Guest Keen Williams Limited v. Collector of Customs, Calcutta : it was ruled by this Tribunal that while interpreting an exemption notification interpretative Rules, Section or Chapter Notes as contained in the Tariff are inapplicable. Even HSN Explanatory Notes are not binding while interpreting exemption Notification. The definition of "Reproducer' given in McGraw Hill Dictionary of Scientific and Technical Terms is also of no help, in view of the catalogue referred to above which itself describes the function of the MFRP in details. That apart, from the catalogue, it is clear that MFRP in addition to its function as reader printer can also be made use of indirectly for the purpose of photocopying. First an image or a print is microfilmed with the help of an independent device such as a camera and then this microfilmed print or image is reproduced as a print or an image with the help of MFRP. Thus, it can unhesitatingly be said that though the product MFRP does not directly perform the function of photocopying and accordingly cannot be said to fall under Serial No. 28 of the Schedule to the Notification, yet it is covered within the ambit of Explanation given at the bottom of the Notification.
10. In the result, we allow the appeal and set aside the impugned Order-in-Appeal passed by the Collector (Appeals) and restore the Order passed by the Assistant Collector.