| SooperKanoon Citation | sooperkanoon.com/18206 |
| Court | Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi |
| Decided On | May-08-2000 |
| Reported in | (2000)(119)ELT211TriDel |
| Appellant | Parasrampuria Synthetics Ltd. |
| Respondent | Commissioner of Cus. |
2. Case put forth by the Company is that the imported materials are printed books which are to be classified under Heading 49.01 of the Customs Tariff Act, 1975 as they are books containing technical knowledge. The imported goods are eligible to get the benefit of exemption from duty as per serial No. 10 in the Table annexed to Notification No. 25/95-Cus., dated 16-3-1995. The imported materials were in 97 volumes. 23 volumes alone contained pictorial drawings/designs, while 46 volumes contained textual materials.
Remaining 28 volumes were textual matters with a few drawings and designs. Therefore, they contended that the entire document could not be held to be drawings/designs in pictorial form falling under Chapter Heading 49.11 of the Customs Tariff Act. Yet another contention that was raised by the appellant was that the value of these materials imported has been wrongly assessed and duty levied.
3. The question of classification of the goods imported was considered by the Bench which referred the matter to a Larger Bench. While dealing with the issue, the Bench, which referred the matter, considered various decisions placed before them. On similar set of facts, this Tribunal in Roto Inks Pvt. Ltd. v. Collector of Customs, 1990 (47) E.L.T. 398, Tata Consultancy Service v. Collector of Customs, 1991 (53) E.L.T. 454, Tata Elxi India Ltd.,1995 (78) E.L.T. 370 and Lakshmi Cement v. Collector of Customs, 1996 (84) E.L.T. 271, took the view that materials similar to the one in this case were taken as books. A contrary view was taken by the Tribunal in the decision in Tractors and Farms Equipment Ltd. v. Collector of Customs, 1993 (68) E.L.T. 234.
Because of these conflicting views expressed by Benches of coordinate jurisdiction of this Tribunal issue of classification of the imported goods as to whether it falls under Heading 4901.99 or 4911.99 of the Customs Tariff Act, 1975 was referred to the Larger Bench.
4. Tariff Item 49.01 deals with printed books/ brochures, leaflets and similar printed matter whether or not in single sheets. Dealing with this Tariff Item, HSN gives the following note regarding books and booklets:- "(A) Books and booklets consisting essentially of textual matter of any kind, and printed in any language or characters, including Braille or shorthand. They include literary works of all kinds, text-books and technical publications; books of reference such as dictionaries, encyclopaedias and directories; catalogues for museums and public libraries (but not trade catalogues); liturgical books such as prayer books and hymn books (other than music hymn books of Heading 49.04); children's books (other than children's picture, drawing or colouring books of Heading 49.03). Such books may be bound (in paper or with soft or stiff covers) in one or more volumes, or may be in the form of printed sheets comprising the whole or a part of the conv plete work and designed for binding.
Dust covers, clasps, book-marks and other minor accessories supplied with the books are regarded as forming part of the book." This description makes it abundantly clear that "printed books" must come under the heading "printed books" in Tariff Heading 49.01 and the question to be looked into is what is meant by books. Under Income Tax Act "plant" takes within its ambit books. With reference to "books" coming under the category of plant, Courts examined the meaning of word "book". In Commissioner of Income Tax, Gujarat v. Elecon Engineering Co. Ltd., 1974 (96) ITR 672, the High Court of Gujarat made an exhaustive survey of the word on the point and observed : "The decisions referred to above bring into limelight the point that whenever the question has arisen before courts whether a particular article or object was book, the test which was commonly applied was whether it had the physical characteristics of a book. In other words, the test applied was: Is it a collection of sheets of paper, fairly securely fastened together at one end, and protected by two covers? Is it in a book form and does it look like a book? If this test was satisfied, the article or object was held to be a book no matter that its utility was only for the person who owned it and it was not in the nature of an ordinary book available in the market.
This is the very test which we too have indicated should be implied in judging whether a particular article or object is book...." This decision was approved by their Lordships of the Supreme Court in Scientific Engineering House Pvt. Ltd. v. Commissioner of Income-tax, Andhra Pradesh, AIR 1986 SC 338. Relying on that decision, appeal against the decision of the Gujarat High Court was also dismissed on 29th August, 1986. In AIR 1986 SC 338, their Lordships were concerned with the issue as to whether drawings, designs, charts, plans, processing data and other literature should be regarded as constituting "book". Reliance was placed on the meaning of the word "book" as given in Webster's New World Dictionary for knowing what book means. Their Lordships came to the conclusion: "If the aforesaid test is applied to the drawings, designs, charts, plans, processing data and other literature comprised in the 'documentation service' as specified in Clause 3 of the agreement it will be difficult to resist the conclusion that these documents as constituting a book would fall within the definition of 'plant'. It cannot be disputed that these documents regarded collectively will have to be treated as a book...." 5. In the instant case, the materials that were imported were contained in 97 volumes. Each volume was a collection of sheet paper containing printed matters. They were fairly securely fastened together at one end. They were protected by two covers also. It certainly looked like a book as well. Each volume if seen by a common man, he will treat it as a book, because each looks like a book. Even though the contents may not be of use to people at large as an ordinary book available in the market, it still continues to be a book.
6. An argument was advanced on behalf of the Revenue that the decisions of the High Court of Gujarat and of the Supreme Court regarding "book" rendered under the Income Tax Act cannot be of any assistance to the appellants herein in dealing the issue under the Customs Act. This argument, we are afraid, cannot be upheld. A book, as understood by a common man, cannot change its character depending on the different statutes under which they are dealt with. This is more so when it is seen that the word "book1 has not been defined under the Customs Act, 1962. In Collector of Central Excise, Pune v. Dai Ichi Karkaria Ltd., 1999 (112) E.L.T. 353 their Lordships dealt with a similar argument and observed: "21. The learned Attorney General submitted that judgments relating to the Income Tax Act or other statutes had no relevance while considering a provision in an excise statute. There can be no doubt about the correctness of this proposition, but the Challapalli Sugars Ltd. judgment is one in which the meaning of "actual cost', not defined under the Income Tax Act, 1922, was considered. For ascertaining what 'actual cost' was in the circumstances, this Court referred to accepted accountancy rules and said that they should be adopted and that the expression "actual value" should be construed in a sense which commercial men would understand. The judgment in Challapalli Sugars Ltd. is relevant to the instant case where we have to put a meaning to the word 'cost' which is not defined in the Act. The meaning we give should be such as accords with the meaning that a man of business put upon it, and for so doing established accountancy practice would be relevant." In the light of this statement of law and in the absence of definition of book in the Customs Act, we hold that the understanding of the word 'book' made by the High Court of Gujarat and Supreme Court must govern the issue before us. Accordingly, we come to the conclusion that the materials imported by the appellants were books and books only.
7. According to the Revenue, the printed material which has been imported should fall under Tariff Heading 4911.99. This contention is raised on the ground that they are printed matters including designs and photographs. We shall proceed to examine the tenability of this argument. When goods imported are prima facie found classifiable under two or more headings, how are they to be classified? For this, reference has to be made to the General Rules for the Interpretation of the Schedule in the General Rules for Interpretation. Clause 3(a) of the Rules states that when goods are prima facie classifiable under two or more headings, the heading which provides the most specific description shall be preferred to headings providing a more general description.
Heading 49.01 is a specific description "printed books" as against Heading 49.11 "other printed.matters". When the goods imported were found to be books and they have a specific heading, that specific heading should be the one under which the goods are to be classified.
8. Notes to Chapter 49 of the Customs Tariff Act state that Heading 49.01 also covers a collection of printed reproductions of, for example, works of art or drawings, with a relative text, put up with numbered pages in a form suitable for binding into one or more volumes.
This Chapter Note squarely applies to the goods imported. Thus, this Chapter Note gives no room to doubt the nature of the goods and the heading to which it is to be classified. It can be classified only under Heading 49.01.
9. The appellants claimed general exemption No. 121 as per Notification No. 25/95-Cus., dated 16-3-1995 as amended by Notification No.49/95-Cus., dated 18-5-1995 and No. 175/95-Cus., dated 29-12-1995. As per this general exemption notification, printed books (including covers for printed books) and printed manuals (including those in loose-leaf form with binder) coming under Chapter Heading 49 are exempt from duty. Item 10 in the notification is in relation to books coming under Chapter Heading 49. This notification makes it clear that all books falling under different sub-headings of Chapter 49 are exempt from duty. In view of our finding that the imported goods are printed books and they come under Chapter 49, they are entitled to complete exemption as per General Exemption No. 121. In this view, the goods are not liable to any duty. Consequently, it is not necessary for us to go into the question as to the correctness or otherwise of the valuation of the goods as done by the authority.
10. Now the question that remains to be considered is whether the decision in Tractors and Farm Equipment Ltd. v. Collector of Customs, 1993 (68) E.L.T. 234 is correct or not. The question that was dealt with by the Tribunal was whether the goods imported there could be classifiable under Heading 49.01 or whether under the residuary Heading 49.11. Importance was given to Chapter Note 4 of Chapter 49. That Note made mention of work of art or drawing. The 'drawing' used after work of art according to the Tribunal, is to be understood in accordance with the principle of noscitur a sociis. Accordingly, this Tribunal came to the conclusion: "The word 'drawings' has to be interpreted in line with the meaning of the preceding phrase 'Works of Art' which would refer to the word 'Drawings' as used in Art and not the technical/engineering drawings." This approach made by the Tribunal in the case of Tractors and Farm Equipment Ltd., 1993 (68) E.L.T. 234 is unsustainable. A Constitution Bench of the Supreme Court had to consider the words "claims of set off" or "other proceedings" to enforce a right arising from a contract coming under Clause (3) of Section 69 of the Indian Partnership Act.
Issue was whether the words "other proceedings" are to be restricted to situations similar to set off. Their Lordships stated the law as : "Interpretation ejusdem generis or oscitur a sociis need not always be made when words showing particular classes are allowed by general words. Before the general words can be so interpreted there nust be a genus constituted or a category disclosed with reference to which the general words can and are intended to be restricted." Since the words "claim of set off" did not disclose a category or a genus, "other proceedings" in the Section, words "other proceedings" shall not be read ejus-dem generis with "claim of set off". Their Lordships also observed that the words "other proceedings" must receive their full meaning untrammelled by the words "a claim of set off." Similarly, in the case on hand, Chapter Note mentions works of art or drawings. Words "works of art" do not constitute a genus or a category.
In the absence of a genus or a category, the word "drawing" cannot draw its colour from the preceding words, namely, "work of art." They are separate and they should get their full meaning untrammelled by the word which precedes or succeeds.
11. Note 4 to Chapter 49 states that Heading No. 49.01 also covers the items mentioned in Clauses (a), (b) and (c) to that Note. This proves that, over and above the various items falling under Clauses (a), (b) and (c), some others are also covered by Heading 49.01. Note 4 to Chapter 49 can thus be seen that it is not at all exhaustive. It states that Heading 49.01 is inclusive of items mentioned in Clauses (a), (b) and (c) as well. Interpretation resorted to by this Tribunal in the case of Tractors and Farm Equipment Ltd., 1993 (68) E.L.T. 234 cannot be held to be the correct statement of law. The law stated by this Tribunal in 1990 (46) E.L.T. 500, 1990 (47) E.L.T. 398,1991 (53) E.L.T.454, 1995 (78) E.L.T. 370 and 1996 (84) E.L.T. 271 is the correct one.
12. In view of what has been stated above, we allow the appeals holding that the printed materials imported by the appellant are books coming under Tariff Heading 49.01 and are entitled to complete exemption under serial No. 10 "printed books" falling under Tariff Heading 49 from customs duty as per Notification No. 25/95. No duty is leviable on these goods. The contrary view taken by the Commissioner of Customs is incorrect. We reverse the or-der-in-original No. 95/A&R/VS/97, dated 31-10-1997 in its entirety. It means the penalties imposed on the appellant company and its Directors are also to be set aside. We do so.