Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

M/s. HCL Limited Versus Commissioner of Customs, New Delhi

2015 (7) TMI 790 - SUPREME COURT

Classification of goods - Whether Risograph is an office machine having duplicating function and thus to be classified under sub-heading 8472.90 of the Customs Tariff Act, 1975 or is it a printing machine to fall under sub-heading 8443.50 - Held that:- The HSN Explanatory Notes makes it amply clear that small printing machines, even if intended for office use and even duplicators using embossed plastic or metal sheet, which can also operate with stencils, and photocopying etc. are specifically e .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nt of a plate from which there can be reproduction is, thus, recognised as a process of printing. It would also be pertinent to mention that these very HSN Explanatory Notes clarify that apart from the normal types of printing machines, there are special printing machines which are also covered by this heading. Examples of 7 such machines are specifically given. For the purpose of this case, printing machine described at serial No.7 would be pertinent.

A fine distinction between the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

self takes place when the ink is squeegeed through the stencil onto the screen and ultimately onto the paper. It is the screen which holds the image area, which can carry either a pictorial or typographic material. Similarly, in the case of a Risograph, the long fibre Japanese type paper is the master through which the ink is pressed to reproduce the image or text. The screen printing stencil prepared is equivalent to the plastic film coating on the cellulose fibre of Risograph master. Thus, the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l Appeal No. 4513 of 2005 - Dated:- 21-7-2015 - A. K. Sikri And Rohinton Fali Nariman,JJ. For the Petitioner : Mr. M. P. Devanath For the Respondent : Mr. B. Krishna Prasad JUDGMENT A. K. Sikri, J. Classification of the machines known as Risograph, which are imported by the appellant M/s. HCL Limited, is the issue involved in the present appeal. The question is as to whether Risograph is an office machine having duplicating function and thus to be classified under sub-heading 8472.90 of the Cust .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

% 8443.12 - Sheet fed, office type (sheet size not exceeding 22 x 36 cm) 65% 8443.19 - Other 65% - Letterpress printing machinery, 8443.21 - Reel fed 65% 8443.29 - Other 65% 8443.30 - Flexographic printing machinery 65% 8443.40 - Gravure printing machinery 65% 8443.50 - Other printing machinery 65% 8443.60 - Machines for uses ancillary to printing 65% 8443.90 - Parts 65% 2) Sub-heading 84.72, on the other hand, deals with 'Other office machines' and includes duplicating machines. Various .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ds, machines for opening, closing or sealing mail and machines for affixing or cancelling postage stamps 65% 8472.90 - Other 65% 3) As per the appellant-assessee, Risograph machine is a printing machine which should be covered by sub-heading 8443.50, namely, 'other printing machinery'. On the other hand, the respondent-Revenue has taken the position that it is a specie of duplicating machine and falls under the sub-heading 8472.90, viz. 'Other'. Though under both the sub-headings .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

it in the respective residual clauses viz. Other printing machine or Other respectively. Therefore, what needs to be examined is as to whether the Risograph machine would belong to the family of 'printing machinery' or it belongs to the clan of 'duplicating machine'. Right from the Order-in-Original passed by the Adjudicating Authority, Commissioner of Customs (Appeals) to the Customs Excise and Service Tax Appellate Tribunal (CESTAT), the view taken is in favour of the Revenue .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

icating machine has not cut any ice with the Tribunal which has chosen to follow its own decision in the case of Pioneer International. In a case like this, the first query of the Court was as to whether in the case of Pioneer International any appeal was preferred. Answer given was in the negative, which means that the correctness of the order of the Tribunal in Pioneer International was not tested in this Court. 5) Questioning the wisdom of the authorities below with the contention that they h .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nting machine and also the assessment by the Japanese Customs specifically classifying the machine under sub-heading 8443.50. The appellant categorically brought to the notice of the Assistant Commissioner the following facts for the purpose of classification: (a) Riso Kagaku Corp, the manufacturers of Risograph, were themselves clearing the machine under sub-heading 8443.50 of the classification without raising any objection; (b) test of trade parlance was in favour of the appellant wherein Ris .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

.43 wherein it specifically provides that in addition to normal type of printing machine Chapter Heading 84.43 also cover special machines such as small office printing machines which operate by means of printing type or by offset process, and which are improperly referred to as 'duplicating machines' because their operating principles and appearances are similar to those of duplicating machines, no doubt referring to machines like Risograph; (e) even if principles of duplication are inv .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ioning and also explained that the principle of Risograph is akin to screen printing for which the appellant submitted technical literature. Learned counsel for the appellant submitted that the aforesaid aspects are totally ignored by the authorities below and insofar as the Tribunal is concerned, it has conveniently omitted to look into these aspects by blindly following its decision in Pioneer International and has erred in the following manner thereby: (a) The opinion rendered by the DGTD/Dep .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Customs. (c) The scanner has been extensively used in the printing industry to transfer the image by utilising a thermal head to make masters used for printing, and hence the classification of the Risograph can only be under that Chapter Heading. (d) Risograph does not cut stencils but makes masters of the image to be printed. (e) Chapter Heading 84.72 is a residuary entry and the HSN specifically rules out classification of the Risograph under that heading. (f) The bare literature of the Risogr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in a photocopying machine. (h) Operation Guide itself shows how the master is first made and thereafter prints are taken out and hence the Conclusion of the Tribunal in para 9 in Pioneer International is totally incorrect and perverse. (i) In the case of offset printing, as per the Tribunal, the impression is taken on a rubber roller and then on to the paper. In other words, the master is made which is transferred to the rubber rollers, which thereafter prints on the blank paper. In the present .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is made on to the paper'. In the case of the Risograph machine, ink goes through the pores of the long fibred paper used in the paper plastic master to make the prints. (j) The master made by the Risograph is not like the stencil which is a simple process in stencil duplicating machine, but the master is by the printing technology principles for making the master. Such stencil making process for printing is indeed recognised in the HSN Explanatory Notes inasmuch as Heading 84.43 even covers .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

their findings and also relied upon the Tribunal's decision in Pioneer International for the reasons given therein and submitted that the impugned order of the Tribunal does not call for any interference. He further submitted that Risograph machine is not a machine to print original matter. Master board is only for reproduction. Giving details of the Risograph machine, he submitted that the Risograph works by the process of automatic digital scanning, thermal screening duplicating systems. T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the original, as read by the scanner. The thermal head, which consists of hundreds of heat emitting elements, is used to make the master copy on the basis of the signal received from the image scanner. This master copy is exactly similar to a stencil used in a duplicating machine, which is then loaded on to the drum. The ink which is carried in the drum pieces through the micro-pores in the master on the paper when it is fed underneath the rotating drum. It is, therefore, submitted that Risog .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

assified. The Collectors' Conference, after examining the detailed catalogue and working of Risograph, came to the conclusion that the machine is a duplicating machine and, therefore, appropriately classifiable under Heading 84.72. The Collectors' Conference also came to conclusion that Risograph is more appropriately classifiable under sub-heading 8472.10. 8) He, thus, summed up his arguments by contending that printing and photocopying were somewhat overlapping in the instant case. How .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tal Scanning and Thermal Screening system (b) Printing system : Automatic Stencil Duplicating System (c) Image scanning system : Flat-bed scanner moving system Thus, the specification itself establishes that the printing system inside the Risograph is an Automatic Stencil Duplicating System. B. The input is the original and the output is the copy of the original. C. Technology in Risograph is simple, highly reliable, speed-wise far more superior and cost-wise less expensive than a standard photo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

have given our due consideration to the aforesaid submissions of the learned counsel for the parties and have also gone through the material as well as literature produced by the learned counsel in support of their respective submissions. In a matter like this it is obvious that we have to understand what is duplicating machine and what is printing machine and how they differ from each other. Thereafter, we will have to take note of the technical specifications and functioning of the machine in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

term 'office machine' is to be taken in a wide general sense to include all machines used in offices, shops, factories, workshops, schools, railway stations, hotels, etc., for doing 'office work' (i.e. work concerning the writing, recording, sorting, filing, etc., of correspondence, documents, forms, records, accounts, etc.). It, thereafter, gives the description of duplicating machines, which is included in the aforesaid Heading, as under: Duplicating machines of the hectograph .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ding 84.43), and photocopying or thermocopying apparatus and microfilm apparatus (Chapter 90). 11) The HSN Explanatory Notes makes it amply clear that small printing machines, even if intended for office use and even duplicators using embossed plastic or metal sheet, which can also operate with stencils, and photocopying etc. are specifically excluded. What follows from the above is that if there is a small printing machine like letterpress, lithographic or offset printing machine, which does th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

xcludes the following: (a) Office hectograph or stencil duplicating machines, addressing machines and other office machines of headings 84.69 to 84.72. (b) Photocopying or thermocopying apparatus (e.g. for the production of blue prints, plans, etc., or for the reproduction of documents, picture postcards, etc.) (Chapter 90). HSN Explanatory Notes further clarifies that this Heading includes the following: (1) Machines for printing a repetitive design, repetitive wordings or overall colour on tex .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oncerned, the variety thereof is stated in the following manner: (i) Ordinary presses, used particularly for printing artists' engravings or proofs. In their simplest form they usually consist of a fixed horizontal slab (or bed) to hold the forme, cliché or plate to be reproduced, and a movable plate which is pressed against the bed by means of a screw or lever mechanism; the paper sheet is interposed and backed with a special material (blanket) to distribute the pressure evenly; inki .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

implest form of printing presses consists of a fixed slab (or bed) to hold the forme, cliché or plate to be reproduced. The ingredient of a plate from which there can be reproduction is, thus, recognised as a process of printing. It would also be pertinent to mention that these very HSN Explanatory Notes clarify that apart from the normal types of printing machines, there are special printing machines which are also covered by this heading. Examples of 7 such machines are specifically giv .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e been first printed in black and white, special art editions, playing cards, children's illustrations, etc., by means of stencils or stencil-plates, the colour being applied by brushes, rollers or by spraying. 15) What is significant is the recognition of the fact that there are many special machines (obviously due to advancement of technology) which are small office printing machines and they operate by means of printing type or by the offset process. It is also acknowledged that many time .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nes. Example of four such machines are given in this inclusive description and screen printing machines are specifically included therein. The aforesaid aspects are demonstrated in the following specific words: Machines for printing a repetitive design, repetitive words or overall colour on textiles, wallpaper, wrapping paper, linoleum, leather, etc., include: (1) Block printing machines in which blocks engraved with the design, generally in relief, are repeatedly pressed on the cloth, wallpaper .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ether with a stencil-screen band, the colour being applied through the stencil. (4) Yarn printing machines. These produce colour effects on the yarn (or sometimes on the roving before it is spun into yarn). 16) Thus, a fine distinction between the printing machine on the one hand and duplicating machine on the other has to be borne in mind with specific understanding that in many cases there may be confusion between duplicating machine and specific form of printing machine, namely, screen printi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ged or reduced as per the user. The scanner portion of the Risograph consists of a photo sensor comprising of light emitting diodes and photo detectors. The light emitted from these diodes strike the original. The light falling on the dark areas of the original are absorbed. The photo detector then detects the reflected light and reads the white and black area of the original as read by image scanner. The image thus formed by the scanner is a digital image and not an optical image or continuous .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

for subsequent printing. The master material consists of film based on polyester plastic material boded with long fibre Japanese type paper (through which ink can penetrate). The master film is a few microns in thickness and is, thus, thin. The polyester based material is bonded to the long fibre Japanese type paper by co-polymerization. The plastic film used is heat sensitive. The paper is basically cellulose web through which ink can penetrate. The master material is in the form of a roll of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ce, then to the master and then on to the paper to be printed. 19) From the aforesaid description of the process adopted in Risograph machine, it becomes apparent that Risograph printing process is more akin to screen printing. As already pointed out above, the screen printing process requires a stencil and a screen, with the stencil carrying the design to be printed. This stencil is mounted against the screen. The printing itself takes place when the ink is squeegeed through the stencil onto th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d in screen printing. 20) At this stage, let us embark on a brief journey of printing from Gutenberg to date to see how it has evolved over a period of time leading to screen printing which is one of the most sophisticated form of printing. 21) Printing, today, has become one of the most important means of mass communication though with the advent of computers and e-form of communication, in recent years its importance is somewhat dented. Fact remains that even today it remains an important mean .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as been improvement in the methodology of printing with the advancement of technology. 22) However, there are certain steps which are common to all printing processes. These steps include: (i) typesetting, (ii) proofing, (iii) preparing illustrations for reproduction, and (iv) page makeup. Typesetting is the process of putting into type the words to be printed. It is also called composition. Typesetting can be classified as (1) hot-metal typesetting or (2) photocomposition. Hot-metal type printi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mmercial printing today is done by one of the three processes: (1) relief printing, (2) offset lithography, or (3) gravure printing. Each of these processes uses a different kind of image carrier (the printing surface that carries the images to be printed). In relief printing, the printing surface is raised above the level of the non-printing surface. In offset lithography, the printing surface and the non-printing surface are on the same level. In gravure printing, the printing surface is below .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the stencil onto the surface to be printed. The design can also be traced directly on the screen, and the non-printing parts painted out. Or the screen can be given a light-sensitive coating and the design put on it photographically. Screen process can be used to print on paper, glass, cloth, wood, or almost any other material. It is used to print on objects of almost all sizes and shapes, including draperies, banners, bottles, toys, and furniture. Most screen process printing is done on automa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hrough which ink can be squeezed on to the copy paper. Spirit duplicating (also known as hectographic duplicating) is a process/method which uses strong aniline dye. Originally the ink was transferred to a sheet of gelatin by placing the sheet of paper with the dye on it in a shallow tray. The moisture retaining qualities of gelatin kept the ink moist, and the copy was made by pressing an ordinary sheet of paper on to the gelatin. The modern process, which has replaced the aforesaid original ver .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oms Tariff Act, the stencil itself is made using a typewriter or stylus i.e. the stencil is created outside of the machine before the same is fed and ink directly passed through it. The HSN Explanatory Notes to Customs Tariff Heading 84.72 itself confirms this understanding wherein it is stated that duplicating machines include the stencil duplicating machines which operate with waxed paper stencils previously cut by a stylus or on a typewriter. 26) As pointed out above, the Tribunal has simply .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cated machine with previously unheard print quality; that the machine uses a method of scanning at 400 DPI resolution as used in Scanners in Printing Industry; that instead of optical system (Lens & Mirror) as used in a photocopier, Risograph uses a charged couple device, as used in the scanners in printing industry; that the method is digital only; that just like in Offset Printing which uses a lithographic plate made of aluminium or Zinc coated with photo sensitive material, the Risograph .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


Share:            

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version