Supreme Court - Daily Orders
Commissioner Of Central Excise Mumbai V vs M/S Reliance Media Works Ltd. on 9 May, 2023
Bench: Dinesh Maheshwari, Sanjay Kumar
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IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2699/2022
COMMISSIONER OF CENTRAL EXCISE APPELLANT(S)
VERSUS
M/S RELIANCE MEDIA WORKS LTD. RESPONDENT(S)
O R D E R
The submission on behalf of the appellant is essentially to the effect that question of classification was not properly gone into by the Customs, Excise & Service Tax Appellate Tribunal (“the Tribunal”, for short) because of the confusion with reference to the earlier orders passed in the matter by the High Court including the orders dated 24.06.2009 and 12.11.2009. Therefore, according to the learned counsel for the appellant, the matter deserves to be remanded to the Tribunal to examine the issue of classification of the goods in question.
2. Learned counsel would submit that in terms of Signature Not Verified Digitally signed by Neetu Khajuria the order dated 12.11.2009, whereby the High Court Date: 2023.05.10 17:13:22 IST Reason: made it clear that rather than setting aside the order impugned, the matter was only disposed of, when 2 the entire matter was open for reconsideration, the Department ought to have been given an opportunity to establish its case but before that, the order had already been passed by the Commissioner on 25.08.2009. According to the learned counsel, effect of the order dated 12.11.2009 as passed by the High Court had not been properly taken into comprehension and that has led to the position that the question of proper classification has not been gone into.
3. We have gone through the findings of the Tribunal, and particularly the following:-
“7.1 This Tribunal while remanding the matter back vide order dated 11/07/2008 had clearly directed the adjudicating authority to apply his mind independently on the submissions made by the appellant as regards the marketability of the products and give a detailed and speaking order on the issue. However, in the impugned order, the adjudicating authority has failed to comply with this direction and has not given any independent findings as to the marketability of the products but has merely followed the earlier findings in order of 26/06/2000 wherein the proceedings were dropped on account of time bar and wherein certain observations were made regarding the excisability of the some of the products. This Tribunal in para 17 of the order dated 11/07/2008 had clearly held that these findings are not binding on the appellants as the order dated 26/06/2000 has been dropped and various evidences have been led by the appellant to show that the chemical preparations which are marketed are used for still photography whereas the preparations made by them are used in processing of 3 cinematographic films and such goods are customer specific and are made in situ and captively consumed and never marketed at all. This contention of the appellant has not been effectively rebutted by the Revenue.
7.2 As regards the so-called confusion in the impugned order of the adjudicating authority with regard to order dated 24/06/2009 of the Hon’ble High Court of Bombay, we notice that there is no room for confusion at all. Para 1 of the order dated 24/06/2009 of the Hon'ble High Court reads as under:
"After hearing the parties and considering the impugned order, we are not inclined to interfere with the order of remand passed by the authority concerned".
From this, it is absolutely clear that the Hon'ble High Court did not set aside the order of this Tribunal. In respect of such clear directions, the adjudicating authority has failed to consider the directions of this Tribunal and of the Hon’ble High Court.
7.3 Further, we find that Revenue has not led to any iota of evidence which shows that the various chemical preparations made by the appellant while processing of the cinematographic films are marketable or are marketed. There is no dispute about the fact that the appellants have not, at any point of time, marketed these goods. Further, there are a series of decisions passed by this Tribunal affirmed by the Hon'ble Apex Court in the case of Prasad Film Laboratories, Famous Cine Laboratories and Navrang Cine Center (P) Ltd. (cited supra) wherein this Tribunal while considering an identical matter has given a categorical finding that the chemical preparations used in the processing of cinematographic films are not goods known to the market and hence are not exigible to duty. Further, the experts opinion adduced by the appellant 4 from M/S. Kodak India Ltd. also clearly shows that these preparations are mixed prior to their usage and such mixed chemical preparations are prone to oxidation and other chemical reactions which could make them less effective and such chemicals are not marketed. The department has not tested any of the samples to ascertain the shelf life/other parameters relevant for examining the issue of marketability of the products. In other words, the experts opinion adduced by the appellant from M/s. Kodak India Ltd. has not been rebutted at all. In Bhor Industries Ltd. case [1989 (40) ELT 280 (SC)] the Hon’ble Apex Court held that "simply because a certain article falls within the schedule, it would not be dutiable under excise law, if the said article is not goods known to the market. Marketability is, therefore, an essential ingredient in order to be dutiable under the Schedule to the Central Excise Act". The Hon'ble Apex Court further held that the burden to prove "goods" is on the department which in the present case the appellant has not discharged at all.” (emphasis supplied)
4. It is also noticed that during the course of arguments, it was submitted by the Departmental Representative to the Tribunal that various chemical preparations used in cine film processing were marketed by many including M/s. Kodak India Ltd. and for that purpose, the query regarding nature of goods was raised, but the Department was unable to make good its submission.
5. The Tribunal also took note of a letter dated 04.10.2013 produced by the respondent-Assessee from M/s. Kodak India (P) Ltd. and observed as under:-
5“7.4 During the course of the arguments, it has been submitted by the DR that various chemical preparations used in cine film processing are marketed by many including M/s. Kodak India Ltd. However, when a query was raised whether these goods are sane or similar to the goods made by the appellant in their studio, Revenue could not confirm the same. Therefore, merely because certain chemicals are marketed cannot lead to the conclusion that the chemical preparations made in situ by the appellant are also marketable and no effort whatsoever has been made by the Revenue to establish the marketability and Revenue has failed miserably in this regard. Further the appellant has produced a letter from M/s. Kodak India (P) Ltd. dated 04/10/2013 wherein it has been stated that "the kit chemicals marketed by them are in a concentrated form and have to be mixed with water as per specifications for different baths and after dilution, the chemicals have a very short shelf life and are not marketable".
(emphasis supplied)
6. In view of the above, and particularly in absence of the requisite evidence, the Tribunal ruled in favour of the respondent while observing as under:-
“7.5 In view of the above and in the absence of any evidence to the contrary, the appellants contention that the various chemical preparations produced by them in situ and captively consumed are not marketable goods falling under CETH 3707 of the Central Excise Tariff have to be upheld.
Accordingly, the demands confirmed in the impugned orders under the aforesaid heading are set aside. As regards the duty demand on silver residue which is arising during the processing of the film, as per Chapter Note to Chapter 26, silver waste arising in the 6 processing of cinematographic films stands excluded from Chapter 26 and are properly classifiable under Chapter 71 and during the material period, the silver residue was exempt from excise duty. Therefore, the excise duty demand in respect of silver residue also does not sustain. Once the duty demands fail, all consequential demands towards interest and penalties also fail.” (emphasis supplied)
7. In the light of what has been noticed hereinabove, we are satisfied that the finding of fact with reference to the evidence, or want of evidence, as recorded by the Tribunal does not lead to any question of law worth consideration in this appeal.
8. Accordingly, the appeal stands dismissed.
9. All pending applications also stand disposed of.
....................,J.
(DINESH MAHESHWARI) ....................,J.
(SANJAY KUMAR) NEW DELHI;
MAY 09, 2023
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ITEM NO.42 COURT NO.6 SECTION XVII-A
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No(s). 2699/2022
COMMISSIONER OF CENTRAL EXCISE Appellant(s)
VERSUS
M/S RELIANCE MEDIA WORKS LTD. Respondent(s)
IA No. 24614/2021 - EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT AND IA No. 24611/2021 - STAY APPLICATION) Date : 09-05-2023 This matter was called on for hearing today.
CORAM :
HON'BLE MR. JUSTICE DINESH MAHESHWARI HON'BLE MR. JUSTICE SANJAY KUMAR For Appellant(s) Mr. Balbir Singh, A.S.G. (NP) Ms. Nisha Bagchi, Adv.
Mr. Anmol Chandan, Adv.
Mr. Mukesh Kumar Maroria, AOR Mr. Bhuvan Kapoor, Adv.
Mr. Samarvir Singh, Adv.
Ms. Preeti Rani, Adv.
Mr. Mohd. Akhil, Adv.
For Respondent(s) Mr. Arvind Datar, Sr. aDv.
Mr. Mahesh Agarwal,Adv.
Ms. Sayaree Basu Mallik, Adv.
Mr. M.S. Ananth, Adv.
Ms. Kamakshi Sehgal, Adv.
Mr. E. C. Agrawala, AOR UPON hearing the counsel the Court made the following O R D E R The appeal stands dismissed in terms of the signed order.
All pending applications also stand disposed of.
(NEETU KHAJURIA) (RANJANA SHAILEY) ASTT. REGISTRAR-cum-PS COURT MASTER (Signed order is placed on the file.)