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 goods had been cleared under bond and later removed from the bonded warehouse after payment of additional duty of customs under Item 37-I CET. Thereafter the Department had raised demands for payment of differential duty on the ground that duty should have been paid under Item 68 CET. In all the matters the Assistant collectors concerned held the proper classification to be under Item 68 CET and consequently either rejected the refund claims or confirmed the demands. The appeals against these orders had all been dismissed by the concerned Collectors (Appeals).
The present appeals are against the said orders of the ColIectors(Appeals).
3. We have heard shri A.K. Jain, Advocate assisted by shri C.Chidambaran, Consultant for the appellants and Shri K.C. Sachar for the Department.
4. Shri Sachar points out that in all these cases the appellants had paid basic customs duty under heading 37.01/08(1) CTA and that this circumstance itself should suffice to establish that the appellants themselves were aware, and accepted, that the imported goods were not cinematographic films, exposed or unexposed. To understand this contention it will be better to reproduce heading 37.01/08 CTA. 37.01/08: Photographic plates and film sensitised, whether or not exposed or developed; sensitised papar, paper-board and cloth (including those used in X-ray electro-cardiographic, recording and photocopying work) whether or not exposed but not developed; cinematograph film; chemical products and flash light materials of a kind and in a form suitable for use in photography as specified in Note 2 to this Chapter:(1) Not elsewhere specified 100%(2) Cinematograph film, not exposed Rs.1.00 perExplanation: For the purpose of this sub-heading, linear metrewhere a film is designed with a view to differentvertical sections thereof being exposed separately,its length shall be deemed to be the aggregate ofthe lengths of all such sections.
5. For convenience it would be better to reproduce at this stage Item 37-I CET: 6. The argument of Shri Sachar is that Item 37-I CET related to unexposed cinematograph films but that since the appellants themselves paid basic customs duty under heading 37.01/08(1) CTA they accepted that the imported goods were not cinematograph films, exposed, [under sub Item (3)] or not exposed [under Sub-item (2)] and hence their contention that, for the purpose of additional duty of customs, the goods should be classified as unexposed cinematograph films is not acceptable. I have taken note of this argument and shall deal with it later.
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 size at the time of import is such that it cannot be used for purpose for which the product is meant and as its name implies that it has to be cut to required sizes. This being a sensitive material it undergoes further processing and without this processing it cannot be marketed.
The Assistant Collectors had therefore held that these jumbo films would only be raw-materials for conversion into cinematographic films-unexposed and they would therefore not fall under Item 37-I CET.The Appellate Collectors had also had accepted this reasoning and had held that Item 37-I CET would apply only to cut and ready-to-use films and not to jumbo films. One of the Appellate Collectors, Shri A.K.Singh, has also observed in his order that these jumbo films are not known to the trade as cinematographic films. All the Appellate Collectors have observed that the process of slitting and perforation would be the necessary major processes as would convert the jumbo films into cinematographic films.
8. The jumbo film as imported is of such a size that it cannot fit into any cinematography apparatus since these apparatus are of standard design and are meant to take films of a particular width only. The width may vary from one apparatus to another but it is indispute that no cinematographic apparatus would take in a film of jumbo width.
Further, these cinematographic apparatus are such that the films could be wound on them, or made to move on them, only by provision of the necessary perforation at either edge. Without such perforations the films would not move and would not therefore be useful for purpose of cinematography. Admittedly the jumbo films do not have such perforation at either edge. It, therefore, appears to be clear that, as imported, the jumbo films would not be useful as cinematographic films in the normal manner.
9. But the case for the appellants is that the term "cinematographic film" has not been defined in the Act and in the absence of any such definition it would be the normal trade understanding thereof that would govern the classification of the product under issue. It is contended that cinematographic positive films of jumbo size are also known in the trade as cinematographic-unexposed films. It is also contended that, as has been held by the Bombay High Court in the case of the Commissioner of Sales Tax v. Aggrawala & Company 1983 ELT 116, 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 applellants 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 appellants.
He referred us to the fact that in the talks held by the Indo-GDR Group of Experts (as evidenced by the minutes of the meeting on 8th & 9th April, 1975) jumbo rolls were also referred to as positive colour cine films. He further pointed out that in discussions held between the appellants and the delegations of M/s. Kamera Film Export Import, Berlin on 27th, 28th and 30th April 1976(as evidenced by the minutes of the discussions) jumbo films were also discussed in the discussions over import and supply of positive colour cinematographic films. He also referred to the agreement concluded between the appellants and M/s Kamera Films, following the above discussion, in which colour jumbos were referred to with reference to the import of cine positive PC-7 films. He again referred to the purpchase orders, the invoices etc. of the appellants and their suppliers wherein jumbo films have been described as colour cine films positive, the same description being carried out in the bills of entry also. Reference was also made to the contract with Agra Gevaert on the part of the appellants wherein also mill rolls of colour cine positive films of width 140 cms. etc. have been referred to (the term mill rolls is apparently another method of describing what others mentioned as jumbo rolls).
12. I may here not 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 party in our country dealing with, and in the course thereof describing, jumbo films as cinematographic unexposed films. While it may be 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 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, fr6m 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 that the notification put the jumbo films under sub-heading (1) since that sub-heading provides for a rate of duty at 100%, sub-heading (2) at Rs. l/- per linear metre,' sub-heading (3) at 40% and sub-heading (4)(X-ray film) at 60%. It is thus clear that the Govt. also, in issuing the notification was of the opinion that colour jumbo films would fall under heading 37.01/08(1).
15. Cinematographic films are either exposed films or unexposed films.
Depending on whether they are exposed or unexposed they would fall under heading 37.01/08(2) or (3) respectively. 37.01/08(01) obviously does not deal with cinematographic films since, as earlier said, such films are either exposed or unexposed only: It is thus clear that in the matter of payment of basic customs duty the appellants themselves had consciously decided that the jumbo films were not cinematographic films and therefore chose to pay duty under sub-heading (1), claiming benefit of the notification applicable thereto also. In the circumstances their contention that colour jumbo films in trade parlance are known as cinematographic films only is not acceptable.
16. I have earlier held that the jumbo rolls in question could not be said to be cinematographic films as they could not, as imported, be used for that purpose. It has also been seen that there is no acceptable evidence of the description of these jumbo films as cinematographic films in trade parlance also. In the circumstances I hold that the classification adopted by the Customs authorities for purposes of levy of additional duty of customs under Item 68 CET was correct. Accordingly I hold that wherever duty had been paid under the said item it had been correctly paid and wherever duty was demanded thereunder it was correctly demanded. I accordingly order dismissal of all these appeals.
17. Sankaran, Sr. V.P.--I have read the order proposed by brother Shri Raghavachari but, to my regret, I am unable to agree with the conclusion reached therein.
18. For resolving this question, it would be useful to look at the heading in the customs Tariff Schedule and the notification issued by the Central Government in relation to jumbo films,though classification under the Customs Tariff Schedule is not in issue before us, the above exercise would provide, a clue to the understanding of the Government 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 applellants 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 industrial X-ray films [37.01/08(4)]. Heading 37.01/08(4) reads "X-ray films".
Ordinarily X-ray film is understood to be such film as is ready to be fitted into X-ray equipment. However, the Tariff Entry does not contain any size restrictions. It is. because of this apparently that jumbo rolls of medical and industrial X-ray films have been considered by Government in the aforesaid notification to fall under sub-heading(4).
If this be so, there is no reason to suppose that jumbo rolls of unexposed cinematograph films would not be covered by sub-heading (2).
On the same reasoning, it would follow jumbo rolls of cinematograph films unexposed would fall under Item 37 I of the Central Excise Tariff Schedule.
20. Further it is seen that Heading 37.02 ("Film in rolls, Sensitised, unexposed, perforated or not") in the Customs Cooperation Council Nomenclature (CCCN) covers, as the explanatory notes show, cinematograph film(raw stock) of whatever length and whether of standard (35mm) or sub-standard width(16mm., 9.5mm., or 8mm.). It also covers rolls of sensitised films from which these goods are made. The latter apparently refer to jumbo rolls from which films of the requisite width are made. This is also an index to the tariff/trade understanding of jumbo rolls.
21. The Import Control authorities have described the goods as "cinematograph films raw colour positive finished in jumbo rolls" in licenses. This is also a pointer to the understanding about jumbo rolls of films in international'trade.
22. 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 nobody's case that jumbo rolls have to undergo any processing in India after their import, save that of slitting and perforation.
23. For all. the aforesaid reasons, the imported cinematograph films, unexposed, in jumbo rolls are classifiable more 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 better entry to cover them. This view would gain support from the observations contained in paragraph 7 of the Bombay High Court's judgment in Commissioner of Sales Tax v. Agarwal & Co., 1983 ELT 116(Bom). In this paragraph, the High Court has considered several Supreme Court judgments holding that a term in a fiscal legislation should be interpreted having regard to newly developing materials, methods, techniques and processes. Particularly apposite is the observation of the Supreme Court in Porrits & Spencers (Asia) Ltd. v.State of Haryana in 42 STC 433 quoting Homes J. with approval - A word is not a crystal, transparent and unchanged; it is the skin of a living though and may vary greatly in colour and content according to the circumstances and the time in which it is used.
It may be that, till not so long ago, cinematograph films, unexposed, used to be imported into India in the standard formats, namely, widths of 70mm., 35mm., 16mm., etc. but, in recent years, imports of cinematograph films, unexposed, are taking place in jumbo rolls that are of a considerable larger widths and these are slit and perforated in the country. This difference in the format should not make any difference to the classification of the goods as cinematograph films, unexposed, if one applies the observations of the Supreme Court referred to earlier.
24. 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.
In view of the separate orders recorded by the two members, the following point of difference has arisen:- 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.
This point of difference is referred to the President in terms of Section 129 C (5) of the Customs Act.
25. Rao, Member.--These matters were referred to me by the President under his orders dated 2.6.1990 for hearing them on the point of difference.
26. The point of difference as formulated by the learned 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 but did not give directions for the filing of the documents. The learned Representative further submitted that the matters were heard nearly three years ago and were closed for orders. But for this difference of opinion between the two members, who heard the matter, there would not have been any further hearing. He submitted that this is not at all the stage at which any additional documents could be filed. Such filing would be against legality and unfair. Besides, Shri Asthana submitted that, all the documents pertained to a period not only after the importation took place but also to a period after the matters were heard and closed for orders.
28. After considering the rival submissions, I decide that the 6/7 documents which comprise letters from the suppliers and buyers of the appellants should not be allowed to be referred. I, therefore, reject the application in respect of these documents: However, I accept the request for taking on record the letter of the Central Board of Excise & Customs, dated 5.9.88 as this letter is issued by a body responsible for the collection of customs and excise taxes in India and also because, as the letter was issued in consultation with the Ministry of Law, it would allow a valuable insight into the mind of the Govt. The miscellaneous application is disposed of accordingly.
29. Coming to the main issue viz, difference of opinion with reference to the liability for payment of additional duty of customs on the jumbo films imported, by the appellants for being converted into cinematograph positive prints of various sizes for supply to their customers. The case for the Deptt. is that these goods fell under Item 68 CET for purpose of additional duty of customs while the case for the appellants is that the proper classification would be under Item 37-I CET. The learned Member(J) held that the correct classification of the imported goods(jumbo rolls) was under TI 68 CET as held by customs. He, therefore, proposed dismissal of the application.
30. The learned Senior Vice-President, in his proposed order, held that the jumbo rolls were correctly classifiable under Item No. 37(I) of the Central Excise Tariff and proposed to allow all the appeals with consequential relief. It was, in this context, that the point of difference was formulated and referred to me.
31. First, I heard shri Jain, the learned Advocate 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 that the Government of India and the Government of German Democratic Republic (GDR) understood that the goods forming the subject-matter of discussion and agreement were colour cine films. He referred to contracts, licenses etc. to submit that the goods were indeed colour cine films only. The learned Advocate submitted that the Learned Member(J) went wrong in ignoring the evidence filed and referring to non- existent international parlance arid in holding that jumbo rolls could not be used for cine purposes. Referring to TI 37(I) he submitted that in this Tariff Item, there is no reference to use or to adaptation for cine purposes, and therefore, such a condition cannot be imposed in the Judgment of the Tribunal. Shri Jain further submitted that cine film is not defined in the Tariff and therefore, the opinion and the trade parlance of the buyers and sellers of the goods should be taken into consideration. He emphatically stated that the only use of the jumbo rolls is for conversion into cinematograph and that there was no other use for the goods. In this context, shri Jain referred to paragraph 22 of the Sr.V.P.'s order and submitted that this paragraph mentions the essential and functional characteristics as are found in the jumbo rolls. Shri Jain argued that the identity (and therefore the classification) of an article is associated with its primary function and strongly relied on a judgment of the Supreme Court in Atul Glass Works, Supreme Court. Referring to the finding of M(J) that the goods were not ready for use, shri Jain referred to a judgment of the Supreme Court in Shri Chiranjeet Lal v. State of Assam, in 1985(60) STC, Supreme Court and submitted that in this matter the question was whether "meat on hoof" amounted to meat and the Supreme Court decided that it was. He also referred to two other Judgments of the Supreme Court reported in 1980 ELT 343 and submitted that in both these judgments, the Supreme Court took a similar view. He referred to other judgments of the Supreme Court and the Tribunal to argue that when the jumbo rolls are cut into cinematographic films no manufacture is involved. Shri Jain then referred to paragraph 4 of the M(J)'s order wherein the Ld.Member held that the appellants themselves accepted classification (for the levy of basic customs duties) under heading 37.01/08(1) CTA and availed of benefit of Notification 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 of the Tribunal differed indicating that there was a high degree of doubt in the matter. If so, according to Shri Jain, the benefit of doubt should go to the assessee in fairness.
32. Shri Asthana, the Ld.JCDR was then heard. He supported the findings arrived at by the Ld.M(J) and expressed the Department's disagreement with the order proposed by the Ld.Sr.V.P. He emphasized that though classification for the purpose of basic customs duty was not the issue here, it cannot be, even for a moment, ignored that the appellants emphatically declared the goods to be other than cinematograph films and availed of notification No. 220/76 which could not otherwise have been available to them. He referred to paragraph 19 and submitted that this position was accepted therein and therefore, the goods have to be held to be "other than cinematograph films". Shri Asthana argued that the question before the Bench was not what the Customs said but it was what the appellants themselves said and how they treated the goods. He submitted that one's own admission is the best evidence and here, going by what the appellants on their own, stated in connection with the classification of the goods for the purpose of basic customs duty, it should apply for the purpose of CVD. Pointing out that the appellants were the sole importers of the goods, Shri Asthana submitted that that was the reason to treat their representation (in the context of basic customs duties) as the best evidence. He submitted that the Ld.
Sr.V.P.concurred with the classification under 37.01/08 for basic customs duty. He pointed out that the appellants never pleaded that the classification was wrong and therefore, the case both of the Govt. and the Appellants was that for purposes of basic customs duties, the imported goods were not cine films.
33. Shri Asthana referred to paragraph 19 of the Order(of Sr. V.P.) and submitted that Notification No. 176/83 Cus, might not have been cited before the Bench at the time of hearing. The appellants, according to him, claimed only notification No. 220/76 in the two bills of entry.
(The bill of entry mentions two Notifications No. 220/76 & 96/78, dated 23.2.79 & 30.3.79, filed before us).
34. Referring to paragraph 13 of the Order(MJ), Shri Asthana argued that the minutes of the meeting held by the Indo-CDR Group of Experts, cannot be taken as evidence 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.'s reference to a judgment (para 23) of the Supreme Court in Porrits & Spencers (Asia) Ltd. v. State of Haryana in 1983 ELT 1607 was not relevant, as the appellants have not pleaded any change of technology or pattern of imports.
37. Referring to the contents of the Paragraph 21 (Sr.V.P.), Shri Asthana submitted that description given by the Trade Control Authorities is not relevant as they merely reproduce the language from the application into the license. He further argued that heeding 37.02(CCCN) covers cinematograph film(raw stock). He submitted that in the orders proposed by the Ld. Sr.V.P., there was no discussion regarding trade parlance, that the contents of paragraph 11 of the order(MJ) were ignored and that the order relied only on the Notification, the language used by the licensing authority and the CCCN....Therefore, he pleaded that I should agree with the order proposed by the Ld. Member(J).
38. In his Rejoinder, Shri Jain submitted that the Committee of Experts was attended by the DGTD and experts from the Govt. of India and GDR and therefore, the views expressed there had much value. He submitted that the Notification No. 220/76-CE made reference to jumbo cine colour films and covered the product imported and that customs allowed the concession with open eyes. He submitted that it is possible that there may be a lacuna in the Notification. He emphasized that a Notification cannot help to interpret the Tariff.
39. I have considered the submissions of both sides. A perusal of heading 37.01/08 shows that there are four sub-headings therein. The significance of each of the sub-headings has been brought out in paragraph 19 of the order. Notification No. 220/76 exempted colour jumbo films falling within Chapter 37 and it is in this context that Shri Asthana argued that the appellants themselves described the imported goods as other than cinematograph films, not exposed and that this description cannot be ignored for the purpose of levying of the CVD. After carefully considering the arguments and perusal of the orders of both the Ld. Members, I am of the opinion that the availment of the concession of Notification No. 220/76 does not lead to the finding that the imported goods are not colour jumbo films/cinematograph films. The language of a Notification has to be interpreted on its own. Here the requirements of the Notification 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 trade parlance, this evidence, in my opinion, is reliable. I refer to these only to dispose of the Ld'.JCDR's arguments in this regard.
42. The question discussed by the two Ld.Members and now before me is whether for the purpose of levying CVD, the goods should be classified under heading 37(I) CET 68. In my opinion, the contents of paragraph 22 of the Ld. Sr.V.P.'s order are of great significance. Shri Jain emphatically stated before me that the goods are utilized only for the manufacture of cine films and they have no other use. This was never denied either by the Ld.JCDR before me or by the Deptt. at any stage; slitting and perforation which is necessarily done on the films do not change the classifiability/as would be clear by the judgment of the Tribunal in Agarwal & Co. 87(29ELT 975). Besides, as correctly argued by Shri Jain classification of the goods is based on its primary functions. (Atul Glass Works) (Supra) In the present matter, the essential characteristic of the imported goods is the capability to become cinematograph films. The trade parlance on an international level having been held proved by the minutes of the Expert Committee, the goods have to be classified as cinematograph films, unexposed.
43. 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., 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-de-claration 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.
44. I also keep in mind the various Judgments cited by Shri Jain to plead that even if there is a broad specification in another Tariff Item, it would be sufficient for not classifying a product under TI 68.
In Bharat Forge & Press Industries (P) Ltd. 1990(45) ELT 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.Adcote namely:- (a) 1989(4Q)ELT 287 (SC) in the case of CCE v. Jayant Oil Mills Pvt.
Ltd (paral8).
(b) in the case of Bharat Forge & Press Industries (P) Ltd (paral3).
(c) 1980 ELT 249(Bom) DB in the case of Garware Nylons Ltd. v. U.O.I.and Ors. (paral9).
(d) 1980 ELT 390(Guj)(DB) in the case of Darshan Hosiery Works v. U.O.I.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 the Sr.V.P's and my own (present) orders.
46. For these reasons, I agree with the order proposed by the Sr. V.P.and I hold that the un-exposed cinematograph film in jumbo rolls imported by the appellants was correctly classifiable under Item 37(I) of the First Schedule to the Central Excises & Salt Act for the purpose of levy of additional duty of customs.
47. The point of difference is answered accordingly. The file is now sent back to the Bench for further orders.
48. In the light of the majority opinion, we hold that the imported cinematograph films, unexposed, in jumbo rolls correctly fell under Item No. 37 (I) of the First Schedule to Central Excises and Salt Act for the purpose of levy of additional duty of customs. In this, view of the matter, the orders of the lower authorities are set aside and the appeals allowed with consequential relief to the appellants.