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United Offset Process Pvt. Ltd. Vs. Collector of Customs - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1985)(19)ELT242TriDel
AppellantUnited Offset Process Pvt. Ltd.
RespondentCollector of Customs
Excerpt:
.....collector of less-charge demand for rs. 7,60,032.72.2. the appellants imported a consignment of colour scanner c-299 and other accessories by air flight no. dl-353 dated 20-4-1980. in the relevant bill of entry, they showed items under tariff heading 84.35.the appellants contend that the colour scanner is intended to analyse the colour of a composite transparency or a colour bromide and finally produces four different positives and negatives on graphic art films.the colour scanner also analyses any transparency into four basic colours, viz., yellow, magenta, black and blue. the appellants submit that the colour scanner imported is capable of being used as ancillary equipment in the printing industry only. the assessing officer scored off the heading 84.35 and inserted the heading.....
Judgment:
1.The appellants have preferred the appeal against the order of the Appellate Collector of Customs, Bombay, in Order-in-Appeal No. 4161/82 BCH dated 27-7-1982 confirming the order of the Asstt. Collector of less-charge demand for Rs. 7,60,032.72.

2. The appellants imported a consignment of colour scanner C-299 and other accessories by air Flight No. DL-353 dated 20-4-1980. In the relevant Bill of Entry, they showed items under Tariff Heading 84.35.

The appellants contend that the colour scanner is intended to analyse the colour of a composite transparency or a colour bromide and finally produces four different positives and negatives on graphic art films.

The colour scanner also analyses any transparency into four basic colours, viz., yellow, magenta, black and blue. The appellants submit that the colour scanner imported is capable of being used as ancillary equipment in the printing industry only. The assessing officer scored off the Heading 84.35 and inserted the heading 90.25(1) of the Customs Tariff Act. On 26-7-1980, a letter No. S/2-2659/80-81 ACU was sent demanding a sum of Rs. 7,60,032.72. The appellants pointed out that the scanner was used only in the printing industry and was not used in the photocopying and cinematographic laboratory. They also urged that in the Import Policy of 1980-81, under Item 12 of Appendix II, Sl. No. 3, colour scanner has been set out as an item. The appellants therefore urged that the classification under 90.10 was incorrect and unjustified. The Asstt. Collector after enquiry, relied on Notification 36/81, dated 1-3-1981 which classifies the goods in Chapter 90 as being used in the printing industry. There was an appeal and the Appellate Collector has stated that the duty was chargeable under Heading 90.07 Hence the appeal.

3. Shri V.N. Deshpande, Advocate for the appellants, urged the following po nts :- (i) the show cause notice issued is not valid because the assessment had been completed and only the Board had the right to review the same. He relied on the rulings reported in 1982 E.L.T p. 43 and 1980-E.L.T.-p. 227 ; (ii) he also pointed out that the show cause notice should contain the reasons for the modification and relied on the ruling reported in 1980 E.L.T. 235; (iii) the machinery imported could be classified under 84.35 because it was a machinery ancillary to printing, He argued that 90.10 would not be applicable and in the case of doubt, the entry which is beneficial to the assessee should be taken into consideration.

4. Shri Kunhikrishnan, JDR, argued that the machinery imported was one operated on the principle of photographic camera and was correctly classified under 90.07. He also relied on the Notification 36/81 dated 1-3-1981 under which colour scanners have been exempted under Chapter 5. The learned counsel for the appellants urged that the classification having been concluded and the goods having been cleared it was not open for the Asstt. Collector to issue a show cause notice. There is no force in this contention. The appellants sought to clear the goods mentioning entry 84.35 and paid duty accordingly in respect of chromographic scanner. In regard to other items, they were classified under 90.25. The appellants also claimed the benefit of exemption under Notification 112/77. Section 28 of the Customs Act contemplates the issue of a Notice, in case the duty had been short levied. In this instance, the Asstt. Collector felt that there was short levy and he issued the show cause notice under question. The notice is thus justified under the statute.

6. The learned counsel cited the ruling 1980 E.L.T. 227 and urged that it was not open to the Appellate Collector to indicate a different entry than the one set out in the show cause notice for it was a new case not known to the petitioner. On the facts in the present case, it is manifest that the Collector has not made out a new case, not made known to the appellants at the time of the show cause notice. The modification of the Tariff Item has not caused any prejudice to the appellants and hence there is no force in the contention that the show cause notice is not valid.

7. The appellants have admittedly imported a chromographic colour scanner. The question is under what head, it is assessable. The appellants have mentioned 84.35 in the Bill of Entry. This entry refers to other printing machinery or machinery used ancillary to printing.

Both in the show cause notice and in his order, the Asstt. Collector has referred to the Entry 90.10 which reads as "apparatus and equipment of a kind used in photographic or cinematographic laboratories not falling within any other heading in this Chapter." The Collector in appeal held that the machinery would come within the ambit of 90.07 "photographic cameras." The classification by the appellants under 84.35 cannot be sustained if we analyse the catalogue submitted which reads as follows :- "We present the new Chromograph 299 for all scanner and process camera operators, and hope to help in shaping the future of your process operations. Let us state at the outset that the Chromograph 299 does not replace the expert operator. But with this modern high-performance "tool" he can more effectively and more economically apply his know-how to production." We also find in another portion "The Chromograph 299 produces colour separations rapidly and reliably without accessory equipment and without intermediate negatives or colour duplicates. This means reduced material costs and at the same time increased productivity." The learned counsel for the appellants argued that this machinery is correctly classifiable under 84.35. But 84.35 refers to other printing machinery. The particulars gathered from the catalogue do not indicate that the machinery in question could be called as one ancillary to printing. The appellants also urged that in trade and industry and in scientific and technological parlance, this equipment is used in the printing industry only. The colour scanner is intended to analyse the colours of a composite transparency. The function of this scanner is only to prepare colour separation sets which may be useful for printing. Therefore, it is not a printing machinery. Entry 84.35 is thus ruled out.

8. Let us now consider whether 90.07 would apply in the present case.

This entry contemplates a photographic camera. Obviously the machinery cannot be called a camera, much less a photographic camera. Hence in our view entry 90.07 is not attracted. The appellants have also mentioned 90.25 in their Bill of Entry. But a perusal of the classification also shows that this machinery cannot attract duty under 90.25. We are therefore left only with the other Item 90.10. If it is an apparatus or an equipment used in photographic or cinematographic laboratory, then this heading would be attracted. In this case, we find that the scanner produces colour separations rapidly without intermediate negative or colour duplicates. The learned counsel for the appellants also produced before us the colour separations made from the machine. On a perusal of those exhibits, it is clear that the machinery would come within the heading 90.10. The position is further confirmed by the Notification 36/81. It must be said that colour scanners have been classified under Chapter 9 and exemption has been granted for import of such machines when used in the printing industry. So, it is reasonable to conclude that the intention of the Govt is to treat colour scanners as falling within Chapter 90. The learned counsel for the appellants sought exemption under Notification 112/77. But that Notification applies to machines attracting duty under 84.35. Moreover, that Notification contemplates "process cameras within its ambit." The learned counsel for the appellants fairly conceded that the colour scanner imported, is not a process camera. In the show cause notice it is stated that chromographic colour scanners was correctly assessable under 90.10.


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