TMI Blog1990 (11) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... rein, imported goods described as cinematograph film (unexposed) colour positive in Jumbo forms with a specification of an effective width of 112 CMS. This was assessed to CVD by the Custom House under Item 68 CET as all other goods, not elsewhere specified , and after 1-3-1986 under Heading 3701.90 CETA as other photographic plates and films in the flat or in rolls, sensitised, unexposed, of any material other than paperboard, paper, etc. The respondents, subsequently, preferred a refund claim seeking re-assessment under Item 37-I CET as cinematograph films, unexposed, and under Heading 37.04 after 1-3-1986 under CETA as cinematograph films, unexposed. This claim was rejected by the Assistant Collector, by her order dated 16-9-1987 by holding that in the imported form, the goods are not fit for being used as cinematograph film because it has to undergo further slitting before being put to use as cinematograph film and that, therefore, the Assistant Collector held that the goods is only the raw-material for the manufacture of cinematograph film. Further, it was found that basically, all are photographic films which are distinguished by ultimate usage as photographic, cinematogra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the heading as also films in rolls with or without sprocket holes and that photographic films not cut to usable sizes remain classifiable under that heading. It was submitted that it is well settled that the Explanatory Notes to the HSN, which the CETA largely follows have persuasive value in determining the classification. The Ld. S.D.R., further, pointed out that in the corresponding Customs Tariff Act another sub-heading 3702.39, the classification of other films without sprocket holes of a width exceeding 105 mm is under various sub-headings with specification of width and length of the film, whereas in the CETA of these headings are compressed into the sub-heading 3702.90 as other. In this context, the Ld. SDR pointed that the CETA description underwent a change after 1-3-1987 and the department s case is that from 1-3-1986 to 28-2-1987, the classification of the goods should be 3701.90 as other photographic plates and films, etc. and after 1-3-1987 under heading 3702.90 as other photographic films in rolls sensitised, unexposed, etc. For the period prior to 1-3-1986, the Ld. S.D.R. submitted that he would adopt and reiterate department s arguments before the Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at case. The Ld. Counsel further contended that the finding of the Tribunal in that case has relevance even under the CETA Tariff Schedule because the tariff description under Item 37-I as well as under heading 3704 and 3702 subsequently remained the same, namely, cinematographic films, unexposed. The Ld. Counsel also urged that when the tariff description itself is clear, there was no ground for seeking the aid of Explanatory Notes to the HSN which do not have any statutory authority and the explanatory notes cannot be taken as a conclusive of the issue. The Ld. Counsel also contended that the decision of the Tribunal in Northern Plastics case (supra), does not materially support the department because in that case, the question was with reference to the claim for exemption under notifications 52/86 and 266/86 and 40/88 and 50/88. There was also a question of mis-declaration as the goods were not declared as jumbo rolls by Northern Plastics and the further question of violation of ITC regulations. The notifications referred to were on the basis whether the material was jumbo rolls or non-jumbo rolls and there was a further aspect to that case of having imported the goods without h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly assessable to duty under Item 37-I as cinematographic films unexposed. The majority judgment, therefore, held that even though jumbo films may have to be further slit and perforated before use, its primary function was as cinematographic film, and the essential characteristic of the imported goods is the capability to become cinematographic film. Trade parlance on an international level was also relied upon. This was with reference to the fact that in the talks held by the Indo-GDR Group of Experts, jumbo rolls were also referred to as positive colour cine films, and that the meeting of the committee of the experts was also attended by the D.G.T.D and the experts from Government of India and GDR and that, therefore, some weight would have to be given to the views expressed in the minutes of the expert committee where the goods were considered as cinematographic films unexposed. Therefore, from the above, decision, it is very clear that the classification of the goods under the erstwhile CET prior to 1-3-1986 under Item 37-I CET as cinematographic films unexposed, is well-founded and since there is no ground to take a different view, we follow the same in the case of these appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erforation. 23. For all the aforesaid reasons, the imported cinematograph films, unexposed, in jumbo rolls are classifiable more appropriately under Item No. 37(1) of the Central Excise Tariff Schedule than under the non-descript residuary Item No. 68. Item No. 37(1), as noted earlier, reads cinematograph films, unexposed. The entry does not place any width restriction on the film. Standard width cinematograph films, unexposed that is to say, of width 70MM, 35mm, 16mm, etc. would undoubtedly fall within the entry. There is no dispute about this position. From the words employed in the entry it is hard to see how the concept of width can be brought into the picture. So long as a given film is a cinematograph film by nature of its quality, though it may not be ready for use in cinematography equipment before being slit into one of the standard widths and perforated at the edges, there is no reason to hold that it would not fall within the scope of the description employed in the entry. In my view the said description is far more specific to cover cinematograph films, unexposed, in jumbo rolls which are the subject of the dispute rather than the non-descript residuary Item No. 68 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Asthana made an important point when he referred to the Judgment of this Tribunal in Collector of Customs and Central Excise v. Northern Plastics Ltd., reported in (1989) 24 ECC 45 (SB): 1990: (45) E.L.T. 263, Tribunal. In that judgment, it was held that the imported goods were jumbo rolls and not cinematograph colour films. In my opinion, the judgment does not influence the present matter. There the question was whether there was mis-declaration as the goods were described (in the bill of entry) as cinematograph films whereas the imported goods were found to be jumbo rolls. In the present matter, the Appellants declared the goods as jumbo rolls and the question is whether for purpose of CET 37(I), they should be considered as cinematograph films. The question being different and the facts being different, I do not consider that the earlier Judgment in Northern Plastics Ltd. (Supra) has to be followed here." 9. In the result, we see no reason to interfere with the orders passed by the Collector (Appeals). The appeals are, therefore, rejected. 10. [Contra per: S. L. Peeran, Member (J)]. - In these batch of appeals, the merits of the entire case was not argued before us, nor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not Item 37. The Assistant Collector had examined this issue in great details and had held that the goods are not capable of being used as a cinematographic film. It was in the nature of a raw material for the manufacture of cinematographic film. The Assistant Collector had also held that the Tariff Act did not define cinematographic film or photographic film. Basically, all the photographic film, depending on the use to which it is put, the item is distinguished as photographics, cinematographic film, X-ray film etc. The Assistant Collector had negatived the claim of the importer that the jumbo film had got essential character of being sensitive to light, required for cinematographic film. Sensitiveness to light is essential character of all photographic film and it was not peculiar to cinematographic film alone. The Collector (Appeals) had not gone into these matters at all and had also not taken into consideration trade parlance and commercial use and understanding, while examining the appeals before him. The importer had also failed to put forth any evidence in this matter. Therefore, Shri M. Jayaraman submitted that this matter required to be remanded for fresh adjudication. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred while stating in the Northern Plastics case (supra) that the matter related only to applicability of Notification and misdeclaration of the goods under Bill of Entry as cinematographic films while imported goods were found to be jumbo rolls. He pointed out that the Bench in Northern Plastics Ltd. case (supra) had also held in para 47 that the imported items were jumbo rolls and not cinematographic colour films. Although the question of classification was also in dispute before the Bench in Northern Plastics case and a clear finding had not been arrived at. He further pointed out that in Customs Classification matters pertaining to raw materials essential characteristics of the imported goods cannot be the basis for classification. Therefore, in view of the anomalous situation, he sought for the matter being referred to a larger Bench. 14. Shri A. K. Jain appearing for the importer respondent reiterated that the issue had been clearly gone into by both the Benches and it did not require any further clarification in the matter. 15. We have to examine the case from this point of view only. As merits of the matter have not been argued, therefore, the only question for our c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of manufacture laid down by the Courts. In earlier appeals before the same Collector, he had upheld the findings of Assistant Collector that the processes were manufacture and now when he was changing his view based on the Circular of Government of India, it tentamounted to extraneous forces working on his quasi-judicial powers. Such type of application of mind has been deprecated in the case of Orient Paper Mills Ltd. v. Union of India Others -AIR 1969 SC 48, also in 1978 E.L.T. 345 (SC) and in J.K. Steel Ltd. v. Union of India Others AIR 1970 SC 1173. 17. There are several items in each of the heading. The imported item is in a raw stage in huge Jumbo Rolls . It is not within our knowledge as no technical literature is produced before us, nor was such literature produced in both the earlier cases cited before us; which could suggest that the imported material cannot be converted into other forms of films noted in the tariff entries except the cinematographic film. The Assistant Collector has stated so in her Order-in-Original that the goods are not capable of use as a cinematographic film and depending on use to which it is put, the item is distinguished as photographi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pparently another method of describing what others mentioned in jumbo rolls). 12. I may here note that though Shri Jain had produced two other letters, both dated 15th July, 1987, one from the National Film Development Corporation Ltd. and the other from the South Indian Film Chamber of Commerce, he had conceded that they need not be looked into since they would be in the nature of additional evidence and no steps had been taken to introduce such additional evidence. 13. Thus, in effect, the appellants have produced, in support of their claim regarding the trade parlance, instances of discussions, agreements, follow up documents etc. of their own transactions only. The explanation is that they alone import such jumbo rolls and therefore there can be no instance of any other part in our country dealing with, and in the course thereof describing, jumbo films as cinematographic unexposed films. While it maybe true that no evidence of trade parlance within the country could be produced for the reason stated above it is not known why trade parlance at least in international trade could not be produced by the appellants. As earlier mentioned, the evidence produced of trade parlance i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cture goods liable to Central Excise Duty) which referred inter alia, to Cinematographic Colour Films (unexposed) Positive under sub-heading 3702.20. The respondents claimed that the goods should be classified under 3702.41 and argued before the Collector that this having been the earlier practice there could not be a departure from the same." 20. The question No. 1 for consideration raised in para 46 is (i) whether the goods imported by the respondents are Jumbo rolls/Cinematographic colour films . The answer at para 47 is In so far as the identity of the imported goods is concerned, it is quite clear that what has been imported are Jumbo rolls and not cinematographic colour films. It was never the case of the respondents that the imported goods were not Jumbo Rolls . 21. The findings pertaining to the same imported goods in Hindustan Photo Film Manufacturing Co. Ltd. (1990 29 ECC 116) by Judicial Member are paras 14,15 and 16 noted below :- I shall at this stage deal with the contention raised by Shri Sachar, as noted in para 6 supra. That was to the effect that the appellants themselves had, in the matter of basic customs duty, accepted classification under heading 37.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y demanded. I accordingly order dismissal of all these appeals." (underlined by me). 22. The findings of Sr. Vice President given at paras 22, 23 and 24 are noted below :- The nature of the subject - jumbo rolls namely, cinematograph films, is not to be doubted though it is true that they cannot be straightaway put into cinema equipment without their undergoing the process of slitting and perforation. These latter physical processes actually serve to help the mechanical process of fitment into the equipment and movement of the film in the equipment. But the quality of the goods which makes it cinematograph colour positive film is essentially attributable to the process of emulsion, coating etc. which the rolls have undergone prior to their being imported for, it is no body s case that jumbo rolls have to undergo any processing in India after their import, save that of slitting and perforation. For all the aforesaid reasons, the imported cinematograph films, unexposed, in jumbo rolls are classifiable more appropriately under Item No. 37(1) of the Central Excise Tariff Schedule than under the non-descript residuary Item No. 68. Item No. 37(1), as noted earlier, reads Cinemato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier. In the result, I would hold that the imported cinematograph films, unexposed, in jumbo rolls correctly fell under Item No. 37(I) of the Central Excise Tariff Schedule. The orders of the lower authorities deserve to be set aside and the appeals allowed with consequential relief to the appellants." (underlined by me). 23. The third Member has concluded it by noting as follows in paras 37, 38 and 39 :- The other major point argued by both sides related to trade parlance. After carefully considering Shri Asthana s devaluation of the minutes of the Indo-GDR meeting, I am of the opinion that even if trade parlance is a relevant point, the contents of these minutes cannot be ignored. As submitted by Shri Jain, the meeting was attended by representatives of DGTD, Ministry of Industry, and Government of GDR etc. When the Department did not themselves bring any evidence about trade parlance, this evidence, in my opinion, is reliable. I refer to these only to dispose of the Learned JCDR s arguments in this regard. The question discussed by the two learned Members and now before me is whether for the purpose of levying CVD, the goods should be classified under heading 37(1) C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mis-declaration alone was before the Bench. It could not be so also due to the fact that the classification has to be decided first before the eligibility of exemption notification could be considered. As exemption under the notification could be availed of only after deciding the classification. The film being in raw stage and awaiting several processes to undergo before reaching the end use it could not be said at this stage, in absence of technical literature that it would suit only for cinematographic film and not for other items. There is such advance in technology and the importer being manufacturer of various types of films, they could utilise it for converting it into any other type of film. The fact that it is being used for cinematographic film requires to be established, if the principle of enduse is being applied for classification purpose at this stage (which appears to me to have been done by the Bench (majority)) in Hindustan Photo Film Manufacturing Co. Ltd. (supra). In this connection, it may be pointed out that the end use cannot be determinative factor for the purpose of classification as held by Supreme Court in the case of Dunlop India Ltd. Madras Rubber Fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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