Commissioner of Central Excise Vs. Monotype India Ltd.

1. The Revenue is aggrieved with the Commissioner (Appeals)'s Orders accepting the assessees' plea to classify the Dark Room Camera, Gallery Camera, Vertical Camera, Semi-Automatic Vertical Camera, Photographic Image Processors and parts of Camera under Chapter Heading 90.08 as against the classification adopted by the lower authorities under Chapter Heading 90.06. The rival headings read as follows : 90.08 Image Projectors, other than Cinemato- graphic; Photographic (other than Cine- 9008.20 - Microfilm, microfiche or other microform readers, whether or not capable of produc- 9008.40 - Photographic (other than cinematographic) enlargers and reducers 90.06 Photographic (other than Cinematographic) cameras, Photo graphic Apparatus and 9006.10 - Cameras of a kind used for preparing print- ing plates or cylinders 9006.20 - Cameras of a kind used for recording docu- ments on microfilm, microfiche or other mi- 9006.30 - Cameras specially designed for underwater use, for aerial survey or for medical or surgi- cal examination of internal organs; compari- 2. The contention of the Revenue in this appeal is that the findings given by the Commissioner (Appeals) that the items in question are "Process Camera, a commodity different from a Photographic Camera" is not a correct view. It is stated that the items in question are required to be classified under Chapter Heading 90.06 as 'Photographic Camera' (other than Cinematographic) instead of under Chapter Heading 90.08 as Photographic Enlargers and Reducers (other than Cinematographic). It is contended that the words 'Process Camera' appears to be used only as a nomenclature but they are not cameras in strict sense inasmuch as they transform image of the object on a light sensitive film, which forms the negative and is used to make positive by contact printing. It is stated that it is, therefore, no way different from that of a camera where the image of the object is transformed to the light sensitive film which is used to get a picture on the photographic paper. It is stated that for the additional facility of getting image of the required size on a film, all the functions are akin to the function of a conventional camera. The description of subject item as given by the manufacturer indicates them as reproduction camera and functions on the same principles as a photographic camera. They rely on the HSN Notes to Chapter sub-heading 90.06 and state that such chapter Notes make it clear that all kinds of cameras, including process cameras used for printing are classified under the sub-heading 90.06. They state that the Section/Chapter notes and the description of Heading 90.06 exactly fits into the subject item as well as for vertical cameras and process cameras and also with the description on the advertisement materials which forms the dependable evidence in determining the classification of goods. He further stated that the capturing of image of the object on the film is the major functions of the goods and this is nothing but the functions and these cameras are specified under Chapter Heading 90.06. Enlarging or reducing the size of the image is an additional functional facility, which has no relevance for the purpose of classification of goods.

Hence, they seek for restoration of the OIO.3. We have heard learned SDR Shri L. Narasimha Murthy and learned Counsel Shri S. Raghu.

4. The learned SDR pointed out to the Chapter Heading 90.06 and contended that the item, in terms of HSN Notes, has to be classified as Photographic Camera, and not as Image Projectors (other than cinematographic), Photographic (other than cinematographic), Enlargers and Reducers.

5. The learned Counsel submitted that even in terms of the exclusion clause under Chapter Heading 90.06, on pg. 1587 of the HSN Notes, photographic enlarging or reducing apparatus fall under Heading 90.08.

It is his submission that the item is used in printing industry and it does the functions of photographic enlarging or reducing and hence the Commissioner (Appeals)'s finding is correct and should be upheld.6. We have carefully considered the submissions and have gone through the order passed by the Commissioner (Appeals). The Commissioner has relied on the functions of the process cameras as explained on pg. 1141 of the Book by Shri S.B. Sarkar titled "Words and Phrases of Excise and Customs", 2nd Edition, and has distinguished the functions between the Process Camera and the Photographic Camera. He has noted that the Process Camera is basically used for enlarging or reducing the size and for production of two dimensional objects only and is mainly used in the printing industry. He has also noted that the functional utility of the item is totally different from that of the Photographic Camera and hence upheld the assessees' contention for classification under Heading 90.08 which, deals with the product Image Projectors (other than cinematographic), Photographic (other than cinematographic), enlargers and reducers. This portion of the evidence gathered by the Commissioner (Appeals) is from the written submission and technical literature produced by the assessee. The Revenue has not produced the records on the grounds that the same is not available as the assessee-company is closed and records are not found. Going by the Commissioner's findings, we note that the Commissioner has looked into the literature and found that the item is a 'Process Camera' which carries on the function of enlarging or reducing the size and for reproduction of two-dimensional objects only and is mainly used in the printing industry. Page 1587 of the HSN Note under sub-heading 90.06 clearly excludes Photographic Enlarging or Reducing Apparatus and it is stated that it falls under Heading 90.08. The grounds taken by the Revenue that 'Process Camera' is an ordinary camera is not supported by any evidence. The HSN Notes under 90.06 deals with photographic camera whether for professional or major use and whether or not presented with their optical elements. The findings recorded by the Commissioner are well founded and in the absence of any material produced by the Revenue to controvert the same, the findings are required to be upheld. The distinctions made by the Commissioner with regard- to the assessees' items and the 'Photographic camera' in Paras 6 to 8 of his order are re-produced herein below.

"6. I have carefully gone through the submissions made by the Appellants both in their grounds of appeal as well as at the time of personal hearing. It is observed that the goods in question are 'Process Cameras'. The function of the Process Cameras have been explained on page 1141 of the book by Shri S.B. Sarkar titled 'Words and Phrases of Excise and Customs, 2nd Edition, which is as under : PHOTO PROCESS CAMERA - The process camera is a commodity different from a Photographic Camera. It is a mechanism of technological device for printing technology, a sort of copier, used for the purpose of printing. Printing blocks used in the photomechanical reproduction process are made from negatives which are exposed in a process camera sometimes called a copying camera. The photo process camera can be used for taking flat objects but cannot be used for taking photographs of three dimensional objects. [From Focal Encyclo of Photography Vol. II 1974 Edition - CCE v. Monotype Corporation Limited-1991 (82) STC 292 WBTT)]." Also from the functional utility and the process carried out by the Process Camera and a Photographic coverage, it would be seen that there are various differences between the two as can be seen from the differences given below:----------------------------------------------------------------------- Process Camera Photographic Camera-----------------------------------------------------------------------Reproduction of two dimensional Reproduction of three dimensionalobjects only objectsFocus at a point Focus at RangeMagnification or reduction of the Magnification or reduction not pos-reproduction possible depending sibleTonal gradation is done by expos- Tonal gradation in the output noting through half tone screens possibleColour output (negative) not pos- Colour negatives possiblesibleLight sensitive materials (film) Films used very fast and exposureused are very slow & as such ex- timing is very slowposure timings required is quiteLens apparatus are very big up to Lens apparatus are smaller 2.5 or 4.5270 mm/200 mm.

cm etc.

Thus, from the above, it is seen that the main function of a Process Camera is different from that of a Photographic camera, particularly when it would be seen that a Photographic camera gives a colour output (negative) whereas in a Process camera, colour output (negative) is not possible. Further, the Process Camera is basically used for enlarging or reducing the size and for production of two dimensional objects only and is mainly used in the printing industry. The functional utility of the item is totally different from that of a Photographic Camera.

Therefore, in my opinion, the correct classification of the product would be under Chapter Head 90.08 which deals with the product Image Projectors, other than Cinematographic, Photographic (other than Cinematographic) enlargers and reducers. Process Camera manufactured by the appellants would rightly fall under Chapter 90.08 rather than under Chapter Head 90.06. Besides, a large number of judicial pronouncements submitted by the Appellants in their grounds of appeal, would also support their argument that the functional utility of the product would determine the classification of the product. In the present case, the specific entry given under Chapter 90.08 covers the goods manufactured by the Appellants.

7. I therefore feel that the item would rightly fall under Chapter Head 90.08 and not under Chapter Head 90.06 as held by the lower Adjudicating Authority.

8. I therefore, set aside the Order passed by the Assistant Commissioner and accordingly allow the appeal." On a careful consideration, we do not find any infirmity in the order and the same is upheld by rejecting these appeals.