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TMI Blog2009 (11) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... e, "Scrabble" is a puzzle or in the alternative it is an educational toy falling under sub-heading 9503.00 of the CETA. Assessee holds a licence from M/s. J.W. Spears & Sons Ltd., U.K., to use the brand name(s) "Scrabble" and to manufacture the product in India. Assessee pays royalty to M/s. J.W. Spears & Sons Ltd., U.K., on sale of "Scrabble" in India. In these civil appeals we are concerned with the period March 1996 to June 2001. 3. On 12.4.96, the assessee filed a declaration under Notification No.13/92-CE (NT) dated 14.5.92 informing the Department that the assessee manufactured toys and puzzles falling under sub-heading 9503.00 of the CETA which were fully exempt from payment of excise duty as per Notification No.81/90-CE amended by Notification No.56/94-CE. In the declarations for the relevant years in question, according to assessee, the Department was informed that they were manufacturing items classifiable under sub-heading 9503.00 as well as under Heading 95.04 either on their own account or by using the brand name of others. According to the assessee, along with the declaration(s), a list of toys manufactured by it, classifiable under sub-heading 9503.00, was also fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search on the subject etc., the assessee submitted that in any event "Scrabble" was an educational toy. Assessee also relied upon various dictionary meanings to show that "Scrabble" was a puzzle and, therefore, classifiable under sub- heading 9503.00 of the CETA. Assessee also furnished affidavits of purchasers of "Scrabble" who deposed that "Scrabble" was an educational toy used for imparting education to children and is treated as a puzzle by adults. 5. Vide orders dated 30.1.02 and 30.9.03, the Commissioner (A) held that "Scrabble" was a board game classifiable under sub-heading 9504.90 of the CETA and liable for levy of central excise duty thereunder. The Commissioner further held that the assessee had deliberately suppressed the fact of manufacturing and clearance of dutiable brand goods "Scrabble" under sub-heading 9504.90 and, therefore, the longer period of limitation was invocable. 6. Aggrieved by the Orders of the Commissioner (A), Assessee went in appeal to CESTAT bearing Nos.E/1554/02, E/1553/02 and E/32/04. All three appeals filed by the assessee were collectively heard by CESTAT and disposed of by a common Final Order No.A/346-348/08/C-I/EB dated 21.3.08. By the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely, other toys; models; puzzles of all kinds. 9. According to the assessee, a "Scrabble" is very similar to a crossword or jigsaw puzzle and, therefore, "Scrabble" falls under sub-heading 9503.00 which refers to "puzzles of all kinds". According to the assessee, since the expression "other toys" in sub-heading 9503.00 is followed by a semi-colon, the said expression "other toys" constitutes one separate and distinct class from "puzzles of all kinds" which itself constitutes a different and distinct class from "reduced-sized models" because, according to the assessee, each of the three classes are followed by a semi-colon. 10. The key question which we have to answer is : whether "Scrabble" is a puzzle. In our opinion "Scrabble" is not a puzzle. Let us first see how "Scrabble" was invented and how it evolved. When the Great Depression left architect Alfred Mosher Butts out-of-work, he decided to invent a board game. He did his market research and produced a document entitled "Study of Games". He concluded that there are three kinds of parlour games: "number games", such as dice and bingo; "move games", such as chess and checkers; and "word games", such as anagrams. He stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value and the player has to create words. He tries to create words which attain maximum value; tries to gain maximum value from the lettered tiles which come by chance to him. This is where skill comes in. Each player uses his skill to achieve the highest value. In other words, if a player has command over language, he can coin or create words with highest maximum value. Thus, these two elements of chance and skill are the key elements of a "Scrabble". In "Scrabble" no clues are given as in the case of crossword or jigsaw puzzles. In "Scrabble", outcome is not fixed or pre-determined as in the case of puzzle. The game is essentially in the nature of anagrams played on a board (of 15 X 15 squares) which uses the concept of a crossword only to the extent of arrangement of words formed either vertically or horizontally. The essential characteristic of crossword to lay down clues and having a solution is absent from "Scrabble". Thus, "Scrabble" is an ingenious mix of anagrams, crosswords, chance and skill. It involves a lot of luck. One of the crucial ingredients is that you cannot know what tiles are on your opponent's rack or which you will draw next. So, aided by artful strategy th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the instruments by which chance may be developed and upon which skill may be exercised are also games - such as cards, dice, balls, figures, letters, checks etc. Therefore in a game there is a trial of skill or chance between two or more contesting parties according to some rule(s) by which one may succeed or fail. It is a contest for success, for a trial of chance or skill and it embraces every contrivance which has for its object sport, recreation or amusement. These are the various dictionary meanings of the word "game". Applying the dictionary meaning, we are of the view that "Scrabble" is a board game. It is not a puzzle. In the circumstances, it falls under Heading 95.04 and not under sub-heading 9503.00 of the CETA. 19. In the alternative, it is the case of the assessee that they are also selling what is called as "Junior Scrabble" which is an educational toy which falls in sub-heading 9503.00 of the CETA under the expression "Other Toys". It is submitted that "Junior Scrabble" has an element of playfulness and recreation. It is submitted that it is not a process but an article a child can play and develop his word power with the scrabble. It is submitted that "Junior Scra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emain even today tools of amusement. They remain an object for a child to play with. One needs to apply the predominant test in such cases. Applying these tests, we are of the view that even a "Junior Scrabble" will not fall in the category of "educational toys". As stated earlier, the two main elements of "Scrabble" are - chance and skill. These elements are absent in a toy. Hence even a "Junior Scrabble" is not an educational toy. It is a game. It remains a board game and in the context of the placement of the entries in Chapter 95 which we have discussed above, in our view, even "Junior Scrabble" will come under Chapter Heading 95.04 of the CETA. 22. Now, coming to the question of extended period of limitation, it is the case of the assessee that they bonafidely believed that "Scrabble" is a toy in the nature of a puzzle and, therefore, it was classifiable under sub-heading 9503.00 of the CETA. According to the assessee, the longer period of limitation was not invocable under the proviso to Section 11A(1) of the 1944 Act as the assessee had stated in all their annual declarations that they are manufacturing toys and puzzles classifiable under Heading 95.04 and sub- headin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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