1. The revision application, dated 29th December, 1976, against Order-in-Appeal No. S/49- 238/76R of 29.6.1976 and 14.7.1976 passed by the Appellate Collector of Customs, Bombay, has been transferred by the Government of India to the Tribunal for disposal in terms of Section 131B(2) of the Customs Act.
2. The Appellants imported Tank Development Equipment in four cases covered by B/E No. 525/35, dated 18.7.1975/24.7.1975 and claimed assessment at 40% (which is the machinery rate of duty) under Item No.77(5) ICT, read with Exemption Notification No. 23/69. The goods were, however, assessed at the standard rate of duty under Item 77(5) on the ground that the imported tank development equipment is not covered by the description "Standard Precision Process Cameias for preparing process and photo and litho blocks and component parts thereof not capable of being put to any other use", and it is only a chiller and is required after the function of camera is over. The Assistant Collector held that moreover no camera has been imported by the Appellants and the goods are not the component parts of the camera, which is a complete equipment without the said tank. Before the Appellate Collector, re-assessment was claimed under item No. 77(5) with Exemption Notification No. 23/69 or under item No. 72(b) ICT. They argued that the entire equipment was not just a chilling equipment, as held by the Assistant Collector, as it was worth over a lakh of rupees.
It was a highly sophisticated tank for developing the films in a machine which was known as Cronolith 24L Processor. After the film was exposed, it was passed through this developer tank and came out dry and duly developed within a few minutes. In the process, there is also a chiller tank through which the film has to pass. At the request of the appellants, the Appellate Collector visited the factory and was shown the working of the developer tank which was a sophisticated, electrically operated tank for developing exposed films. Earlier the process used to be done by using a chemical solution and manually processing the film when the developed film would have different degrees of exposure. In tiie case of the automatic tank, however, the correct strength of the solution is available and the film comes out dry and completely ready and properly developed. Less silver nitrate was required and the process saved both film and silver nitrate, besides, giving very accurately developed films, resulting in better projection of coloured pictures during tin-plate printing or paper printing. The Appellate Collector observed that the equipment is not a component of a process camera but is a self-contained developing equipment. It is also not a component of a standard precision camera for preparing process and photo-litho blocks. It is not, therefore, entitled to Notification No. 23/69 and its classification under 77(5) is more appropriate than item 72(b). He, therefore, rejected the appeal.
3. In this appeal, it is stated that it was explained to the Appellate Collector that the equipment was imported for use in conjunction with the 'Vario-Chromagraph' imported earlier in January, 1974, which was similar in function to a process camera and produced photographic negative from positive required for printing industry and it fell under item 77(5) read with Exemption; and alternatively, item 72(b) ICT was applicable, as it was a machine worked with electric power of 1/4 H.P.A Description Note has been enclosed. It is reiterated that the assessment for the tank development equipment was claimed thinking that the Vario-Chromagraph, being assessable under Item 77(5) with Notification No. 23/69, the same classification would also apply to the tank development equipment. In fact, the Customs authorities had assessed Vario-Chromagraph, valued at over Rs. 6 lakhs, under Item 77(5) and the assessment is under dispute. Since Item 72(b) is being claimed, the Appellants concede that the exemption claimed cannot cover the subject equipment. However, the Appellate Collector's decision in favour of Item 77(5) vis-a-vis 72(b) is contested. Considering its nature, speed and value it has an application in the printing industry and is unlikely to be used in a commercia studio. The ground that the equpment is designed for development and exposure of films need not prejudice the claim for assessment at the machinery rate, as a cine camera, including 16 mm cine film printing machines and photo- copying machines, are classified under machinery items and assessed as such.
The Appellate Collector has lost sight of the fact that the equipment works with electric power of 1/4 H.P., has application in an industry and will not be useful in a commercial photo studio. It is requested the goods are re-assessed under Item 72(b) and the consequential refund of Rs. 91,914.40 P. granted after setting aside the order of the Appellate Collector.
4. Shri Sheth reiterated these contentions. He stated that the equipment was part of the Graphic Article Printing Process Set-up and relied on the description note re-produced below: The Tank Development Equipment is also known as Cronolith-24L Processor which process firms which are exposed on the process camera. The film after exposure is to be developed in a developer solution, fixed in a fixer solution, washed in water and subsequently dried in hot air. The equipment consists of two Developer Tanks-a fixing tank and a washing tank. The chemicals are circulated in these tanks. The film is transported from one tank to the other by means of configuration of rollers. These rollers are driven by 1/4 H.P. geared motor which is already incorporated in the equipment. The Processor has circulation pumps attached with motors to circulate the various chemical solution in the tanks. Drying Section consists of a blower fitted with a heater to deliver hot air. As the film passes through Section it is dried and delivered in the receiving bin. The whole process is complete within ten minutes.
This equipment is used in conjunction with 'Vario- Chromagraph'.
He cited order No. B 372/83, dated 11.5.1983, which dealt with Notification No. 11/77-Cus should there were only two conditions, viz, the automatic film processor where fall under Heading 90.10 CTA and it should be imported for use in the printing industry. Since the machine imported can perform the function of paper processing in addition to film processing, the exemption cannot be denied.
5. Shri Sheth also referred to a decision in the case of H.R. Syiem v.P.S. Lulla 72 BLR 534 laying that the cardinal rules of construction must be followed as Classifications are empirical enumerations It was held that X-rays are "Electromedical apparatus" rather than "Photographic goods" (ST cases Bombay). He also referred to the Lithographies Manual 7th Edn. to show that the goods were for the printing industry. Though it was not covered by item 72(2), which covers printing machinery, it is a machine and should be assessed under 72(b), if the benefit of doubt cannot be given in regard to item 77(5), read with the exemption. If either of these were not held appropriate then item 87 would be attracted.
6. The learned SDR contended that this was not a machine within the description of item 72(b). Before this item, being residuary in character, could be considered, item 77(5) had to be ruled out. This was photographic apparatus or appliance and was not a machine Tata Sons v. C.C. Bombay. The decisions relied upon by the appellants were not relevant as these were cases of a choice between two specific headings.
He wanted the appeal to be rejected.
7. We have carefully considered the matter. Both item 72(b) and 77(5) cover not otherwise specified goods namely ; (i) machines worked by power etc. and (ii) photographic, instruments, apparatus and appliances and parts thereof, respectively. Item 77(5) covers printing machinery but does not apply to the subject goods. We find that the goods are more appropriately classifiable as photographic apparatus or appliances since even in the descriptive note, the word equipment, and not machine, has been used more than once. It also develops films by means of developer and fixer solutions, washing in water and drying by hot air. At the same time, it is not of the nature of a standard precision process camera etc. as described in exemption (Notification 23 Cus.
dated 1.3.1970 and cannot be granted this concession. Since a specific classification in item 77(5) exists, the question of invoking the residuary item 87 also does not arise. For these reasons, the order-in-appeal is upheld and the appeal is rejected.