1. The question for decision in these four appeals, originally filed as revision application to Government of India, is classification for the purpose of c.v.d. on Vitavex H.F. Speaker unit imported by the appellants by four Bills of Entry No. Cash 3157 dated 26-7-1975, 901 dated 9-10-1976, 2823 dated 26-11-1976 and 2122 dated 18-10-1975. The appellants claimed that no c.v.d. was chargeable. The Asstt. Collector of Customs by his orders dated 24-1-1976, 13-5-1976 and 17-4-1976 rejected the claims for refund as untenable and upheld the original assessment under Item 37A (ii) of CET read with Notification No. 14/75.
The Appellate Collector of Customs, Bombay by a common order dated 6-7-1976 in four appeals presented by the appellants, dismissed the appeal and upheld the Asstt. Collector's orders. The appellants then filed revision application to Government of India. To comply with the procedure of the Tribunal they have filed three more appeals which are the present four appeals before us.
2. At the hearing of the appeal Shri J. J. Shah, argued that appellants are manufacturers of cinematograph projectors falling under tariff item No. 37B of the CET and that they do not manufacture any gramophones, Record Players, Record Playing decks, Record changer decks or parts and accessories thereof falling under tariff item 37A of the CET. The goods were imported by the appellants under actual user licence as component parts of projection equipment and not that of gramophones or record changer, etc. The goods imported could not ordinarily be used in gramophones, record players, record playing decks, record changer decks. The frequency range of speaker for gramophone is limited upto 10K/cs whereas the speakers imported by the appellants is 14 kf US range. It was also urged that according to the Bombay Trade Notice No.(125) (MP)/gramophone(3)/75 dated 14-7-1975, that the word 'speakers' would not include bare loudspeakers. What the appellants have imported were bare loudspeaker not to be used in gramophone, record player, etc.
they would therefore, not fall under item 37A(ii). He also relied on a order-in-appeal dated 4-2-1982 passed by the Collector of Customs, Bombay in which with reference to wording of item No. 33f(2), the Collector (Appeals) held that bare-loudspeakers would not fall under tariff item 33f(2) of CET but residuary item of T.I. 68. Shri Shah also argued that Philips India who manufacture speakers like those imported by the appellants were levied central excise duty under tariff item 68 and not under 37A(ii). A letter from the Philips India Ltd. dated 15-5-1975 addressed to the appellants stating that refund of differential duty would be made to them was produced. Reliance was also placed on Order No. B-997/83 in appeal No. CE(SB)(T) 235/77-B dated 3-11-1983 where the Tribunal held that high frequency speaker unit imported by the appellants would be properly assessable under Tariff Item 68 at the material time. To a question from the Bench whether the speakers imported by the appellants could be used in gramophones, record player etc. Shri Shah replied that while such a use may be theoritically possible, it should not be commercially viable because the expenses would be extremely high and no sensible manufacturer would do so.
3. On behalf of the respondent Shri K.V. Kunhikrishnan, argued that speaker unit imported by the appellants were sound equipment and could be used in gramophone, record changer, record changer deck etc. He relied on an order of the Tribunal in Murphy India Ltd. v. Collector of Central Excise and Customs, Bombay reproduced in 1983 E.L.T. 828. He therefore, argued for dismissal of the appeal.
4. We have carefully considered the arguments advanced by the parties.
According to the appellants while a theoretical use of the imported speakers in gramophone, record player etc. may be possible the same would not be commercially viable due to manufacturing cost being extremely high. This has not been disputed by the department nor any material placed before the Tribunal to disbelieve the appellant's contention on this account. Besides, the appellants have placed before us a copy of Trade Notice issued by the Bombay Collectorate dated 14-7-1975 from which it would appear that bare-speakers would not be assessable as speakers. The order of the Collector of Customs (Appeals), Bombay in the appeal would support the appellants' for assessment under Tariff Item 68 of CET of the goods. Apart from this once it is held that the use of the speakers in gramophone or record players etc. as component parts is not commercially viable the decision of the Bench in Order No. B-997/83 becomes applicable to the present appeal. The Bench decision had also distinguished the Murphy India case on which Shri Kunhikrishnan has relied.
5. In view of the foregoing the appellants claim for assessment under Tariff Item 68 (all the Bs/E relate to period after 1-3-1975) for c.v.d. would appear to be well merited. As a result the assessment under T.I. 37A(ii) is set aside and the goods are held properly assessable under Tariff Item 68. The appeal is therefore, allowed with the consequential refund to the appellants.