| SooperKanoon Citation | sooperkanoon.com/2657 |
| Court | Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi |
| Decided On | May-14-1986 |
| Reported in | (1989)(44)ELT488TriDel |
| Appellant | Kasturi and Sons. |
| Respondent | Collector of Customs |
2. At the time of import, the imported goods were assessed to duty under Chapter 37 of CTA Heading 37.01/08 and for the purpose of additional duty under T.I. 68 for Printing Plates and 37-C.II for R.C.Paper and Graphic Art Films.
3. The appellants claimed refund on the ground that the goods for purposes of basic customs duty correctly fell under Heading 84.34 of CTA and as they were not manufactured or produced in India, no additional duty was chargeable. The plea did not find favour with the lower authorities who by different orders rejected these claims. The orders were upheld in appeal by the lower appellate authority. Hence these appeals to the Tribunal.
4. At the hearing of the appeals on 17-4-1986, while according to Shri C.S. Vaidyanathan, Advocate Toyobo Printing Plates were directly used in printing, Shri Sundar Rajan, JDR stated that it had only a distant connection. For proper appreciation of the issue involved as respects this item, the Bench felt that parties should after examining the actual working of the plate in question in a printing machine submit an agreed statement. If they could not submit such an agreed statement, the Bench was to give further directions. Pursuant to this direction, parties submitted the following agreed statement of facts about the Toyobo Printing Plate :- "As directed by the Hon'ble Bench in the hearing held on 17th April 1986, a team consisting of Shri Ravinder Bhatt, Advocate for appellants, Shri J. Gopinath, SDR, and Shri A.S. Sundar Rajan, JDR visited the Times of India and Patriot printing press situated at New Delhi. Enquiries and inspection revealed that these two units are not using what is called as Toyobo photo-sensitive nylon printing plate. Our enquiries from the Madras office of the appellants also revealed that the appellants themselves have discontinued the use of the said Toyobo photo-sensitive nylon printing plate. However, the other two products, namely, graphic art film and the photo-sensitive resin coated paper are being used by the Times of India. The samples of these products are enclosed.
The matter (news or advertisement) is photo-composed.
Photo-composition is a process by which type images are set on to the photographic material -photo-sensitive paper or film - according to the types, style, size and line length. For this purpose photo ensitive paper is used which is nothing but a photographic paper.
The matter printed on photo-sensitive paper is pasted on a newspaper form according to the layout. The pasted layout is converted into a film negative (sample enclosed) which is the graphic art film. The only difference is the film is being exposed to ultra-violet rays.
This film negative is in the form of a newspaper page.
The Times of India press is using a photo-sensitive plate which is backed by a steel sheet. But for this difference in the backing material, there appears to be no material difference in the photo-sensitive material used by the Times of India and the process said to have been used by Hindu in their photo-sensitive nylon printing plate. This photo sensitive plate with steel backing is subjected to two exposures to ultra-violet rays which result in transfer of the film negative matter to the photo-sensitive plate.
At this stage there is no physical change in the sensitive plate except the exposure which result in the light transmission only.
However, the sensitive plate is non-sensitised. This exposed plate is further subjected to chemical processing in Nylo wash out unit which result in physical images coming in the form of relief on the plate. The plate which has the relief character is directly taken on the printing machine which is actually used for printing of the newspaper. In the photo-sensitive nylon printing plate used by M/s.
Kasturi & Sons, the same process is said to have been adopted except that in place of steel mounting/backing in the case of Times of India, they are using certain adhesive type of tapes to position the printing plate on the rotary machine." 5. The learned JDR agreed that the Toyobo photo-sensitive nylon printing plate (hereinafter called "printing plate") is exclusively used in printing industry and has no other use elsewhere.
6. At the hearing of the appeals, parties made both oral and written submissions. About Items 2 and 3 graphic art films and R.C. Paper, the learned Counsel for the appellants Shri Vaidyanathan and Shri Ravinder Bhutt mainly reiterated the grounds urged in the Memo of Appeal for challenging classification under Heading 37. The main grounds are that the Graphic Art Films are lithographic films which are different from photographic films. Reference in this connection is made to their description in import policy. About R.C. Paper, it is urged that it is photo type setting paper which is a material on which output of the photo composing equipment is received. It is different from photographic paper used in photography. In applying Chapter 37 to these two, the lower authorities had widened the scope of Chapter 37 which could not in any case stand legal scrutiny.
7. The appellants' main attack is about classification of the Printing Plate under Heading 37.01/08 and claiming classification under Heading 84.34. The appellants in support of their case argue as under.
8. The essential nature and characteristic of the Printing Plates is that of printing plate and the employment of the photographic principle can, in no manner, detract from such characteristic. The printing plates are known in the industry as printing plates used in the industry as printing plate and known to be used only and solely as printing plates and should, therefore, be classifiable under Heading 84.34 of CTA as printing plates and cannot be classified as any other goods on the ground of photographic principle being involved. While not disputing that the principal test to determine the proper classification of a product under Customs Tariff Act, 1975 is the event of importing into India, as held in Dunlop India Ltd. v. Union of India - AIR 1977 (S.C.) 597, the appellants urged that the decision does not rule out the criteria of end-use. The appellants also reply on commercial parlance test and submit that applying this test, printing plates would be classified only under the heading claimed. It is also urged that CCCN notes on which the lower authorities have placed reliance for denying classification under the heading claimed cannot be engrafted for all purposes into CTA for purposes of classification because it is not part of the CTA 1975. Further submission is that in a dispute about classification, the onus lies on the department to show that proper classification is under heading claimed by it. It is also urged that as goods are not produced or manufactured in India, no additional duty would be chargeable on the same. The appellants, besides Dunlop India's case referred to above in support of their arguments regarding classification of printing plates, rely on the following precedents :-A. V. Venkateshwaran, C. C, Bombay v. Ramchand Sobhraj Wadhwaney and Ors.
(2) Indo International Industries v. Commercial ST. U.P. -1981 E.L.T. 325 (S.C.) (3) United Offset Process (P) Ltd. v. C. C, Bombay -1985 (19) E.L.T. 242Cougar International (Pvt.) Ltd. v. Collector of Customs, Cochin - 1984 (16) E.L.T. 310Empire Jute Industries v. Collector of Central Excise -1985 (19) E.L.T. 572Collector of Customs, Delhi v. Electronic Industries -1983 (14) E.L.T. 2394 (9) Nivedita Chemicals (P) Ltd. v. C.C., Bombay -1985 (20) E.L.T. 382 (10) Bharat Electronics Ltd. v. C.C., Bangalore -1985 (19) E.L.T. 245 9. On behalf of the respondent, defending classification of Printing Plates under Heading 37.01/08 ibid, Shri Sundar Rajan advanced the following arguments :- "1. Toyobo photo-sensitive nylon printing plate is, as the name indicates, a sensitive material which is exposed to ultra-violet rays.
2. The processing of this plate is done in dark room to avoid automatic exposer.
4. When the exposed plate is processed in the Nylo wash out unit, the relief in the form of the printable matter appears on the plate.
5. The essential character of the imported material is totally changed as a result of exposure and subsequent processing.
6. Even though ultimately the plate is taken on the rotary printing machine the fact remains that the imported material and the plate on the machine are having different characteristics.
7. As per Explanatory Notes of CCCN Page 528 these photographic plates are classifiable under Heading 37.01. There is a specific reference to this type of printing plate with or without support material, metal or otherwise.
8. This is also evident from exclusion note at page No. 1281 of Explanatory Notes for Heading 84.34.
9. The reliance in this connection is placed on the judgments of the Supreme Court in Dunlop India v. Union of India reported in 1983 (13) E.L.T. 1566 where the Supreme Court has held that the end-use of the article is absolutely irrelevant. The goods are classifiable on the basis of the character of the goods at the time of import. It has also been held that the goods should be classifiable under specific entry and not under residuary entry.
10. That the goods are classifiable under Heading 37.01/08 is also evident from Notification No. 161-Customs, dated 8-6-1983 which exempts photo polymer (Relief image) plate falling under Chapter 37.
The appellants are availing the benefit of this notification. Any other classification would render this notification nugatory.
11. This is also supported from the observations of the Tribunal (though in the nature of an obiter) in the appellant's own case reported in 1985 (19) E.L.T. Page 183 para 7.
12. So far as resin coated photo-sensitive paper and graphic art film are concerned the very look at the sample produced clearly indicates that these are photographic material. These are not even taken to the printing press room. These are processed and used in the dark room. These are covered by Chapter 37 for Basic Customs Duty." 10. Before we proceed to examine the rival contentions about classification of the Printing Plates, the two relevant headings for ease of references may be extracted below :- "37.01/08. Photographic plates and film, sensitised, whether or not exposed or developed; sensitised paper, paperboard and cloth (including those used in X-ray, electrocardiographic, 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 : Explanation. For the purposes of this sub-heading, where a film is designed with a view to different vertical sections thereof being exposed separately, its length shall be deemed to be the aggregate of the lengths of all such sections.
"8434. Machinery', apparatus and accessories for type-founding or typesetting; machinery, other than the machine tools of Heading No. 84.45/48, for preparing or working printing blocks, plates or cylinders; printing type, impressed flongs and matrices, printing blocks, plates and cylinders; blocks, plates, cylinders and lithographic stones, prepared for printing purposes (for example, planed, grained or polished)." 11. The finding of the learned Collector (Appeals) (Shri. K.Viswanathan) in the impugned orders dated 28-4-1984 about the Plates in question being Photographic Plates or Printing Plates is not very specific and clear. On this aspect of the matter, his finding is as follows :- "Further Heading 37.01/08 cover 'Photographic plates and films, sensitised, whether or not exposed or developed, sensitised paper, paperboard and cloth whether or not exposed but not developed; cinematorgraph films;....' The above heading clearly indicates that whether exposed or not plates in question (here they are not exposed but sensitised) irrespective of the end-user industry it will get covered under this heading. I therefore hold that for purposes of classification Heading 37.01/08 CTA should be preferred to Heading 84.34. CTA." From the portion extracted, it would be seen that the learned Collector (Appeals) proceeded to decide on the presumption that the goods in question were photographic Plates. He did not consider whether they were printing plates. From his order, it is also observed that he did not place any reliance on the Chapter Notes of CCCN and rejected the appellants' claim for classification of the plates in question under Heading 84.34 CTA on the above reasons. There is another impugned order dated 29-3-1982 by Smt. Varalakshmi Rajamanickam, Collector (Appeals) but from the title and the record of personal hearing and her finding, it appears that it did not relate to the printing plate in question but to Graphic Art Films. This order would have no relevance for decision on classification of the printing plate.
12. Now the admitted position is that the printing plate is exclusively used only for printing and for no other purposes, though the Revenue contends that its use involves a photographic principle. As would be seen from the portion extracted of the order of the learned Collector (Appeals). He did not record a clear finding whether the goods in question are photographic plates and films (which would be relevant for Heading 37.01/08) or printing plate (which would be relevant for heading 84.34). He proceeded on the presumption that they were photographic plates. The goods in question no doubt at the time of import and clearance from Customs were not expo. 4 or developed.
Assuming for argument that these were imported or cleared from Customs developed or exposed could it in popular sense be taken to be photographic plates and films. The answer, in our view, would be categorically in the negative because at the risk or reputation we must emphasise that the exclusive use of these plates is only in printing industry. Our categorical finding on this aspect would be that such plates by those dealing with them would be called printing plates and not photographic plates or films.
13. The terms photographic plates and films and printing plates have not been defined in the Tariff. Therefore, following the long line of precedents, these terms would have to be construed in their popular sense, i.e. the sense in which people conversant with the subject-matter with which the statute is dealing could attribute to it and on this test as there can be no doubt that the plates which even the Revenue calk printing plates at the time of import or clearance from the Customs deserve description as printing plates and not as photographic plates or films.
14. As for learned JDR's reliance on the Explanatory Notes on CCCN in his arguments, it is sufficient to say that the learned Collector (Appeals) for coming to a finding against the appellants did not rely on the same. Even otherwise at best these notes have persuasive value and in the view we have taken above about these plates, we do not see how these could help the respondent.
15. As for reliance by both the parties on the Supreme Court decision in Dun-lop India Ltd. v. Union of India (supra), and the argument by the Revenue that end-use of the article is absolutely irrelevant and the argument by the appellants that in the context of the entry end-use is relevant, in our view, as already set out above, the printing plates at the time of its clearance from Customs by those dealing with it would be understood to be printing plates and not as photographic plates. Besides competing entry falling for consideration here is 84.34 where the goods are printing plates. In the context of this entry use of the goods becomes relevant and the observations of the Supreme Court in paras 30 and 42 of the decision do not in any way come in our way in classifying the goods as printing plates under Heading 84.34.
16. The goods cannot also be denied classification as printing plates merely on the ground that photographic principle is involved in its use or scientifically and technically it may be photographic plates.
17. To us more appropriate classification for the Toyobo Printing Plates appears to be Heading 84.34 and not Heading 37.01/08 of CTA as found by the lower authorities.
18. As for two other items, i.e. Graphic Art Film and R.C. Paper as already set out except for reiterating the arguments in the memo of appeal no particular arguments were advanced. Chapter 37 applied to this article is more specific than Heading 84.34 claimed in respect of this product. The classification of these goods under Chapter 37 by the lower authorities must be upheld.19. As for the argument that no additional duty is chargeable as the goods are not manufactured or produced in India, the argument is not tenable in view of the decision in Khandelwal Metal & Engg. Works Ltd. v. Union of India -1985 (20) E.L.T. 222. This argument must be rejected.
20. As for classification under Excise Tariff for quantification of additional duty of Customs, no particular arguments were advanced by either of the parties. This aspect of the classification would, therefore, call for no interference.
21. As a result, the Toyobo Printing Plates are held properly classifiable under Heading 84.34 of CTA, 1975. Their classification under Chapter 30.01/08 is set aside. Except for this modification, the orders are otherwise upheld.22. The appeals are thus partly allowed with consequential relief to the appellants.