Customs, Excise and Gold Tribunal - Delhi
Collector Of Customs vs Photogravurs (India) Pvt. Ltd. on 3 April, 1987
Equivalent citations: 1987(12)ECC90, 1987(12)ECR29(TRI.-DELHI), 1987(29)ELT647(TRI-DEL)
ORDER Harish Chander, Member (J)
1. Collector of Customs, Bombay has filed an appeal being aggrieved from order in appeal No. S/49-640/84CL dated 30-3-1985 passed by Collector of Customs, (Appeals), Bombay.
2. Briefly the facts of the case are that the respondents M/s Photo-gravurs (India) Pvt. Ltd., Bombay had imported Lu Cop II/M-Film Step and Repeat Machine vide Bill of Entry Cash No. 741 OC dated 29-1-82. The same was assessed to duty under heading 90.10 of the Customs Tariff Act 1975. The respondents had filed a refund application before the Assistant Collector of Customs and had claimed that the goods imported were correctly assessable under heading 84.35 of CTA 1975 as other printing machinery/machinery for uses ancillary to printing. The learned Assistant Collector had taken the view that the repeat machines imported by the respondents was designed for taking copies of the designs from photographic positive or negative to the sensitized materials like zinc, aluminium or photographic plates or films. He was of the view that as it was a photo copying machine, which transfers the designs on the principle of contact and exposure, it fits into the description of such machines given in the explanatory notes on page 1554 BTN under heading 90.10 of CCCN. He had confirmed the original assessment under heading 90.10 of the CTA 1975 and had rejected the refund claim. Being aggrieved from the aforesaid order the respondent had filed an appeal before the learned Collector of Customs (Appeals), Bombay. Before the Collector of Customs (Appeals), respondent had contended that the function of this step and repeat machine was only for preparing large film which designs at a required distance. This film was then taken to another machine for printing the designs on the metal roller by exposing films and, therefore, since step and repeat machine helped the machine which prints the design on the metal roller in the textile mills, it could be considered as a ancillary printing machine under heading 84.35 of the CTA 1975. It was also argued that a step and repeat machine was not known in the market as photographic or cinematographic appliance. It was only used as an ancillary to an industrial printing machine for preparing a film which designs at a given distance. The learned Collector of Customs (Appeals) had taken the view that the machine was intended for use in textile printing with rotary or flat screens, serigraphic arts, printed circuits, printed labels, graphic arts and other application field. He had held that the machine was used for graphic arts, beliogravure, package printing, printed circuits and printed labels. Photocopier was not used for this type of printing. The learned Collector of Customs had held that the imported machines viz. Step and Repeat machine fall under heading 84.35 of CTA 1975 and had allowed the appeal. Being aggrieved from the aforesaid order the Revenue has come in appeal before the Tribunal.
3. Shri J. Gopinath, the learned SDR, who has appeared on behalf of the appellant, has referred to his application dated nil with the covering letter dated 26-12-86. He has pleaded that in the said application the appellants have made an alternative plea that the correct classification was that the imported goods fall under heading 84.59(1) and states that in case the appellant's grounds of appeal raised in the memorandum of appeal is not accepted, then the alternative plea may be allowed. The said application is reproduced below :-
"Collector of Customs, Bombay, filed an appeal against the Order-in-Appeal No. S-49-640/84 CL dated 30-3-86, which has been registered in the CEGAT as an appeal No. C1372/85-B2.
The issue involved in this appeal is regarding the classification of Step and Repeat machine.
One lucap film Step and Repeat machine was imported by the respondent against Bill of Entry No. 7410 dated 29-1-82 and the same was assessed to duty under heading 90.10 CTA, subsequently the respondent preferred a refund claim Under Section 27 of the Customs Act, 1962 for reclassification under heading 84.35 CTA. This refund application was rejected by the Assistant Collector. Subsequently an appeal was filed before the Collector of Customs (Appeals), Bombay and he allowed the appeal and held classification under heading 84.35.
Collector of Customs, Bombay has filed an appeal against the above decision of the Collector of Customs (Appeals).
On a similar issue involving the classification of identical machine, the CEGAT held the classification of the Step and Repeat machine under heading 84.40, 1985(24) ELT 662, CC Bombay v. Bharat Vijay Mills]. The appellant propose to take up a law point for the interpretation of the Custom Tariff, by way of reference to the relevant interpretative rules, Section and chapter notes and plead for an alternative classification under heading 84.59(1), without prejudice to classification under heading 90.10.
As the above is purely a legal submission, it is requested that the appellant may be permitted to plead for alternative classification under heading 84.59(1) in addition to the points already mentioned in the appeal memorandum."
4. Shri J.M. Patel, the Ld. Advocate, who has appeared on behalf of the respondents, has objected to the appellant's application for the amendment of the grounds of appeal. He has pleaded that the application for the amendment of the ground of appeal has been signed by Shri J. Gopinath and is not signed by the Collector of Customs, Bombay, who is the appellant. He has pleaded that the Collector of Customs, Bombay had formed an opinion in terms of provisions of Sub-section (2) of Section 129A of the Customs Act, 1962 and after forming his opinion he had filed an appeal and the appellant cannot go beyond the grounds of appeal raised in the memorandum of appeal. Shri Patel states that in case the appellant had intention to move such an application, the same should have been signed by the Collector of Customs, Bombay. He has pleaded for the rejection of the appellant's request for the amendment of the grounds of appeal.
5. Shri J. Gopinath, in reply, has pleaded that once the Collector forms an opinion to file an appeal, he can always amend his grounds of appeal. He has referred to Sub-rule (2) of Rule 9 of the Customs, Excise & Gold (Control) Appellate Tribunal (Procedure) Rules, 1982 and has pleaded that the appeal filed by the Revenue is duly accompanied by an order passed by the Collector containing such a direction. Shri Gopinath states that classification under a different heading is a question of law and can be raised at any stage. In support of his arguments, he has referred to two judgments' of the Tribunal in the case of Khader Knitting Co. v. Collector of Central Excise, Madras reported in 1984(15) ELT 176 and in the case of Cynamid India Ltd. v. Collector of Central Excise, Bombay reported in 1984(15) ELT 186 and had pleaded that in the case of Cynamid India Ltd. the Tribunal had held that if the appeal involved the question of correct classification of the goods on which a ruling would have to be given, it would be in the interests of justice or conduced to a proper disposal if the appellants were prevented from raising the new ground. He has pleaded that the appellant's request for raising the additional ground of appeal may be allowed.
6. We have heard both the sides. There is no dispute on the facts of the case and the goods imported by the respondents and we further observe that no further evidence on facts would be required. In order to appreciate the arguments of the appellant which is now sought to be raised, we decide to allow this plea being taken up because we feel that any ground based purely on point of law can be urged at any stage. Our views are further fortified by the earlier judgments of the Tribunal in the case of Khader Knitting Co. v. C.C.E. Madras reported in 1984(15) ELT 176 and in the case of Cynamid India Ltd. v. CCE Bombay reported in 1984(15) ELT 186 where in the latter case the Tribunal had held that -
"Apart from this, he argued that the fresh ground should not be allowed to be taken at this stage, since it had not been taken before the lower authorities or in the original appeal to the Tribunal. The Bench considered that, since the appeal involved the question of correct classification of the goods, on which a ruling would have to be given, it would not be in the interests of justice or conduce to a proper disposal if the appellants are prevented from raising a new ground. The Bench accordingly indicated that this ground would be allowed to be raised."
In view of the above discussion, we over-rule the objection of Shri J.M. Patel, the learned Advocate, for the respondent and hold that for the proper disposal of the appeal there has to be a correct classification and this plea, which is purely a legal plea, should be permitted at the appellate stage.
7. On merits, Shri J. Gopinath, the learned SDR, has reiterated the facts. He has relied on a judgment of the Tribunal in the case of Collector of Customs, Bombay v. Bharat Vijay Mills, Kalol reported in 1986(24) ELT 662 where the Tribunal had held that the use, utility, structure and application of step and repeat machine sets it apart from photocopying machine. The same characteristics also set it apart from a printing machine. It is a machine used for printing of repetitive designs, repetitive words or overall colour on textile, leather, wall paper, wrapping paper, linoneum and other materials. Thus, it is a different machine from photocopying machine which is designed for copying written text and similar matter from paper to paper, and which can be handled by an unskilled worker. Step and repeat machine, on the other hand, is a far more complicated machine and requires far more operations and controls as well as certain amount of skills in photocopying apparatus. Thus its classification under heading 84.34 is ruled out as this item includes only printing machines that print paper and similar stock for the purposes of reproducing communication intelligence, graphic and printed material on paper and similar surfaces. Heading 84.40 covers a wide variety of machines which are used for printing repetitive designs, words or overall colour etc. on wall paper, wrapping paper, rubber, artificial plastic sheeting, linoleum, leather etc. The heading also contemplates printing machine for treatment of textiles. Using the rule of interpretation, it could be said that this heading is the most appropriate of all headings in the entire tariff and the said machine should fall under this heading. Shri Gopinath states that the decision cited by him is of a 3-Member Bench decision and the majority view was that the item imported by the appellants is to be assessed under heading 84.40 and whereas the minority view was that it has to be assessed under heading 84.34. Shri Gopinath states that the correct classification will have to be under heading 84.59(1) which relates to machines and mechanical appliances, having individual functions, not falling within any other heading of this chapter and sub-heading relates to not elsewhere specified. He states that the machine imported by the appellant is not a printing machine. It is a machine for making negatives. Photographic principle is involved. It is like a photocopying machine and falls under heading 90.10. He pleads that his plea for classification under heading 84.59(1) is alternative. The correct classification is under heading 90.10 of the CTA. He further pleads that it is not a printing machine nor is a part or accessory of the same and at best it can be a machine ancillary to a repeat printing machine. He has referred to note 5 of chapter 584 which lays down that a machine, which is used for more than one purpose is, for the purposes of classification, to be treated as if its principal purposes were its sole purpose. Lastly, Shri Gopinath has pleaded that the Tribunal has ruled out the classification under headings 84.34 and 84.35 and the correct classification is under heading 90.10 in case appellant's plea for its classification under heading 90.10 is not accepted, alternatively it may be assessed under heading 84.59(1). He has pleaded for the acceptance of the appeal.
8. Shri J.M. Patel, the learned Advocate, has opposed the acceptance of the appeal and in support of his argument he states that the imported machine does not fall under 90.10. It is an ancillary to the textile industry, different designs are made at required distance and the main function is step and repeat and no photographic function is involved. He has referred to the statement of facts made before the Collector of Customs (Appeals). Shri Patel states that the correct classification is under heading 84.35. In case the respondents plea for 84-35 is not accepted, the respondent has no objection for its classification under heading 84.40 adopted by the Tribunal in the case of CC Bombay v. Bharat Vijay Mills, Kalol reported in 1986(24) ELT 662. He has further argued that heading 90.10 relates to photocopying apparatus. He further makes distinction between a machine and apparatus. Heading 90.10 is applicable in the case of apparatus and not machine. Shri Patel states that the earlier judgment of the Tribunal is binding and as such the assessment may be made under heading 84.35, alternatively 84.40. He has pleaded for the dismissal of the appeal.
9. Shri J. Gopinath, the Ld. SDR, in reply, has again pleaded for the acceptance of the appeal.
10. We have heard both the sides and have gone through the facts and circumstances of the case. Before we proceed further, we reproduce the respective headings so that we can appreciate the respective coverage.
Heading 90.10 "Apparatus and equipment of a kind used in photographic or cinematographic laboratories not falling within any other Heading in this chapter; photocopying apparatus (whether incorporating an optical system or of the contact type) and thermocopying apparatus; screens for projectors."
Heading 84.35 "Other printing machinery; machinery for uses ancillary to printing."
Heading 84.59(1) "Machines and mechanical appliances, having individual functions, not falling within any other heading of this chapter;
(1) Not elsewhere specified."
Heading 84.40 "Machinery for washing, cleaning, drying, bleaching, dyeing, dressing, finishing or coating textile yarns, fabrics or made-up textile articles (including laundry and drycleaning machinery); fabric folding, reeling or cutting machines; machines of a kind used in the manufacture of linoleum or other floor coverings for applying the paste to the base fabric or other support; machines of a type used for printing a repetitive design, repetitive words or overall colour on textiles, leather, wall paper, wrapping paper, linoleum or other materials, and engraved or etched plates, blocks or rollers therefor:
(1) Not elsewhere specified;
(2) Domestic washing machines, laundry and dry-cleaning machinery."
A simple perusal of the headings shows that the imported goods most appropriately fall under heading 84.40 i.e. machines of a type used for printing a repetitive design, repetitive words or over-all colour on textiles. Heading 90.10 relates to apparatus and equipment of a kind used in photographic or cinematographic laboratories and heading 84.59(1) relates to machines and mechanical appliances, having individual functions, not falling within any other heading of this chapter. For classification, it is an accepted principle that where the goods are imported, the goods have to be classified under a heading which tallies most with the description of the goods. In the present matter before us the function and the description of the goods is not disputed. Our views are further supported by an earlier judgment of the Tribunal in the case of Collector of Customs, Bombay v. Bharat Vijay Mills, Kalol reported in 1986(24) E.L.T. 662. Paragraph Nos. 13 and 14 of the said judgment are reproduced below :-
"13. The machine imported by M/s Bharat Vijay Mills is a complex one; the heading 84.40 contemplates printing machine for treatment of textiles and using the rule of interpretation relied upon by the Appellate Collector, one can say easily that this heading is the most appropriate of all headings in the entire tariff and that the step and repeat machine therefore should fall under this heading.
14. The Appellate Collector said heading 84.40 refers to machines used for printing repetitive designs etc. on textiles and covers engraved etched plates, blocks or rollers for such machines; and photocopying machines does none of them. (By photo-copying machine the Appellate Collector meant the step and repeat machine). But heading 84.34 "is restricted to such equipment of a kind used in the printing of texts and illustrations etc. whether on paper or sometimes on other materials by the normal printing processes viz. (I) relief printing, (II) planegraphic printing, and (III) intaglio printing. 84.40 covers machines "for printing a repetitive designs... on the textiles." Because the step and repeat machine prepared only the negative, it cannot be said it is not used for printing of repetitive design on textiles. The preparation of screen or blocks from the negative made by the step and repeat machine is a step towards the repetitive printing; it is a machine used for printing such repetitive designs. Furthermore in his discussion the Appellate Collector relied on the wording in heading 84.34 that the machines covered are "for preparing or working printing blocks, plates or cylinders." This machine, however, does none of these : it prepares the negative which is employed for etching or engraving the designs on the rollers."
11. There is no merit in the argument of Shri J. Gopinath that the goods fall under heading 90.10 and equally there is no force in the argument of the alternative plea of Shri Gopinath that the goods fall under heading 84.59(1). We also do not find any weight in the argument of the learned Advocate that the goods fall under heading 84.34 of the Customs Tariff Act, 1975. In view of the above discussion, we hold that step and repeat machine falls under heading 84.40 of CTA 1975. The appeal is disposed of accordingly.