TMI Blog1990 (6) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... 69/87-D with Suppl.A Nos. 2796 to 2799/87-D and 2929 to 2935/87-D in C/1114 to 1125/86 dated 28-10-86, C.A. No. 72/87-D in 29/AP/2/1986 dated 25-9- 86, C.A. No. 480 to 483/87-D in C3/1422 to 1425 dated 4-2-87 ORDER 9-10-1987 para 13 V.T. Raghavachari, J. 1. All these appeals are by M/s Hindustan Photo Films Manufacturing Company Limited. Since the issue involved in all the appeals is common they were heard together. 2. The dispute is with reference to the liability for payment of additional duty of customs under Section 3 of the C.T.A on the jumbo films imported by the appellants for being converted into cinematographic positive films of various sizes for supply to their customers. The case for the Department is that these goods fell under Item 68 GET for purpose of additional duty of customs while the case for the appellants is that the proper classification would be under Item 37-1 CET. In respect of the majority of imports in issue the appellants had paid duty under Item 68 CET as demanded and had later preferred refund claims on the basis that proper classification would be under Item 37-1 CET. In respect of other imports the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. As earlier mentioned, some of these appeals relate to demands raised by the Department for payment of duty or differential duty as under Item 68 CET as against Item 37-I CET while the majority of the appeals relate to claims for refunds after duty had been paid under Item 68 CET. Though there are various orders of several Assistant Collectors the reasoning adopted by almost all of them in rejecting the claim of the appellants was that the goods, as imported, could not be said to be cinematographic films-unexposed, since they were of such a size that they could not be straightway utilized for purpose of cinematography. It was held by them that until the jumbo film was slit to a suitable standard size an the edges were perforated it could not be used as cinematographic film. It is admitted by the appellants that without such slitting and perforation the films could not be put to actual use of cinematography. In fact the following passage in the order-in-original dated 15.3.80 (concerned in Customs Appeal No. 1076/83) (summarizing the arguments of the appellants) would make this position clear:- the imported jumbo film has to undergo certain process in their factory. Its s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6, a general term use d for any commodity in a fiscal legislation covers that commodity in all its forms of varieties. It is pointed out that this judgment has been subsequently followed by this Tribunal also in the case of M/s. Hargovinddas Company (1987 Vol.29 ELT 975). 10. It has been already seen that at least one of the Collectors (Appeals) (A.K. Singh) observed that a jumbo film is not known to the trade as a cinematographic film. However, no supporting material is cited by him in support of the said observation. Nor is any such material produced before us for the Department. It is, However, argued that it would be for the appellants to establish that a jumbo film is also known in the trade as a cinematographic film, though it could not in fact be used for such purpose in its jumbo form. I have earlier held that the jumbo film, as imported, cannot be said to be cinematograph film, If the appellants yet want it to be classified as cinematograph film as known in the trade it would be for them to prove such trade usage or trade parlance. 11. In this connection Shri Jain sought to rely upon several circumstances as establishing the above contention of the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce produced of trade parlance is in relation to their own transactions only, with overseas manufacturers also, evidence of said trade parlance being with reference to the transactions in issue in these appeals themselves. I am not satisfied that this would suffice as proof of the trade parlance relied on by the appellants. 14. 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 37.01/08(1) CTA- It is seen that in the matter of payment of basic customs duty, the appellants had paid duty under the said heading claiming benefit of notification No. 220/76 dated 2.8.76. That notification exempted colour jumbo films falling within chapter 37 of the First Schedule to the CTA, when imported into India for processing into colour cine films, from so much of that portion of the duty of customs leviable thereon which is specified in the said first schedule as is in excess of 50% ad valorem, the notification does not spell out the sub-heading. But when we look into the rate of duty in heading 37.01/08 it is clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself which, in the absence of any contrary indication, may be taken up to be a fair index of the understanding of the trade also, particularly in the context of the evidence produced by the appellants though it pertains to their own transactions. 19. In the Customs Tariff Schedule, cinematograph films, not exposed falls under heading 37.01/08(2) (the same expression is used in Item No. 371 of the Central Excise Tariff Schedule also). Colour jumbo films imported for processing into colour cine films is evidently considered by the central Government to fall under heading 37.01/08(1) ( not elsewhere specified ) as is clear from customs Notifications No. 230/76 dated 2.8.1976. Though this sub-heading is not spelt out in the notification, there is no mistaking it in view of the exemption being expressed as that in excess of 50% ad valorem (the residuary sub-heading has a duty rate of 100% ad valorem). However, there is another notification No. 176/83 Customs, dated 14.06.1983 which fixes concessional rates of duty on jumbo rolls of roll films [The heading shown in the notification is 37.01/08/(1)], jumbo rolls of medical X-ray films [heading 37.01/08(4)] and jumbo rolls or i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appropriately under Item No. 37(I) of the Central Excise Tariff Schedule than under the non-descript residuary Item No. 68. Item No. 37(I), 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 widths 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 cinematograph 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 which has been picturesquely described by Courts of Law as an orphanage to which goods should not be consigned if there is be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned Members who heard the appeals in the first instance was as follows: Whether the unexposed cinematograph film in jumbo rolls, imported by the appellants, was correctly classifiable under Item No. 37(I) or Item No. 68 of the First Schedule to the Central Excises and Salt Act, for the purpose of levy of additional duty of customs. 27. I accordingly heard both sides on the point of difference on 22.6.1990. Shri A.K. Jain, the learned Advocate for the Appellants filed miscellaneous application No. C/413/90-B seeking to introduce 7 documents including a letter from the Central Board of Excises Customs to the Collector of Central Excises, Madras. Shri Jain's plea in support of the miscellaneous application was that the Member(Judicial)-in his order observed that the appellants should have established international parlance. Shri Jain submitted that as the appellants are entitled to file documents in obedience to the directions of Bench, the documents may be taken on record and allowed to be relied on. The application was strongly opposed by Shri Asthana, the learned JCDR on the ground that the Member (Judicial) made observations about international trade parlance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vocate for the Appellants. The learned Advocate supporting the order, proposed by the Sr. V.P., submitted that the goods imported were colour cine film positive (jumbo film) . He submitted that the appellants are the only unit in India permitted to import the goods. The rival entries of TI 68 TI 37(I) were being alternatively resorted to by Customs and there were instances in which demands were made by Customs when they held, haying assessed the goods(for CVD) under 37(I) proposed re-classification under 68 and refunds were also granted when having initially assessed the goods under TI 68, customs agreed to re-classification (under TI 37(I)). The learned Advocate submitted that the appellants did produce evidence of trade parlance in respect of the imported goods but the Member(J) rejected the evidence that the goods imported were cine films, as the proof adduced by the appellants was based on the appellants' own transactions. Shri Jain pleaded that the evidence should have been accepted as the Dept. failed to bring forward and produce any evidence at all, to the contrary. He referred to the various pieces of evidence produced by the appellants before the Bench and submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation No. 220/76 which partially exempted colour jumbo films falling within Chapter 37 of the First Schedule to the CTA when imported into India for processing into colour cine films. He argued that the Ld. Member was wrong in holding that the Govt. in issuing the films (?) would fall under heading 37.01/08(1). Shri Jain submitted that this point was dealt with by the Ld. Sr. V.P. also in paragraph 19 of his Order, and pleaded that the Sr. V.P.'s Order should prevail as there is no estoppel in tax matters and in any event, the identity of the goods was clear. Referring to Bombay High Court's Judgment in Commissioner of Sales Tax v. Agarwal Co., 1983 ELT 116(Bom), Shri Jain submitted that in terms of this judgement and also other judgments,(especially Collector v. Hargovind Dass Co., a general term used for any commodity covers all its forms and varieties. Citing many judgments, he argued that resort to a residuary item should be made only when there is absolutely no other possible classification. Finally, the Ld. Advocate pleaded that from the beginning, there was doubt in the minds of customs who vacillated between the two rival entries and even now, the Ld. Members o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence of trade parlance as the minutes of the meeting were not drafted with reference to the customs tariff and related matters and no specific question was posed. 35. The mention of the goods as positive raw colour cine films twice in the minutes was only in passing and does not amount to trade parlance according to him. 36. Submitting that the arguments advanced and case law cited by Shri Jain about the existence of manufacture were not relevant, Shri Asthana submitted that the only question before the Bench is whether or not the imported goods were cinematograph films and whether trade parlance said so. He submitted that for the reasons mentioned in paragraph 8 of the order of M(J), jumbo films were not cinematograph films. In this context, the Ld. JCDR referred to an earlier Judgement of the Tribunal in Northern Plastics Ltd. v. Collector of Customs 1990 ELT(45), 263 Tribunal, to argue that jumbo rolls were not cinematograph films. He further submitted that even if Tariff covered the goods, trade palace was relevant and in his support referred to the Judgment of the Supreme Court in Collector of Customs v. Bhor Industries Ltd.. He submitted that the Ld. Sr.V.P.' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n are that the goods should be jumbo films; that they should fall within Chapter 37(CTA) and that they should be imported for processing into colour cine films. It is not the case of the Deptt. that any of these requirements have not been satisfied. The goods admittedly fell under Chapter 37, they were colour jumbo films and they were imported for the prescribed purpose; that they may no be classifiable under any of the four sub-headings of 37.01/08 is neither a reason to deny them the concession nor to hold against the appellants that the availment of the Notification amounted to a claim/admission that the goods were not colour jumbo films. This is because the character of the goods is beyond dispute. 40. The other major point argued by both sides related to trade parlance. 41. 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, Minister of Industry, Govt. of GDR etc. When the Deptt. did not themselves bring any evidence about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T 25 SC, the Hon'ble Supreme Court held that only such goods as cannot be brought under the various specific entries in the Tariff should be attempted to be brought under the residuary entries. In other words, unless the Deptt. can establish that the goods in question can, by no conceivable process of reasoning, be brought under any of the Tariff Items, resort cannot had to be residuary Item . Similar is the ratio of the other Judgments cited by the Ld. Advocate namely:- (a) 1989(4Q)ELT 287 (SC) in the case of CCE v. Jayant Oil Mills Pvt. Ltd (para 18). (b) in the case of Bharat Forge Press Industries (P) Ltd (para 13). (c) 1980 ELT 249(Bom) DB in the case of Garware Nylons Ltd. v. U.O.I. and Ors. (para 19). (d) 1980 ELT 390(Guj)(DB) in the case of Darshan Hosiery Works v. U.O.I. (e) in the case of Sainet Pvt. Ltd. v. U.O.I. (para 27). (f) 1989 (39) ELT 569(Tribunal) in the case of B.H.E.L. v. C.C. (para 5 6). 45. In passing, I observe that in letter No. 119/1/88/CX-3, dated 5.9.88, addressed to the Collector of Central Excise, Madras, the Central Board of Excise Customs took a view that is in accordance with the views of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
