1. The facts giving rise to this dispute may be briefly stated. The Department's case is that a cine-projector was assembled from second hand parts without a Central Excise licence. On adjudication, the Assistant Collector allowed clearance of the cine-projector on payment of a redemption fine (in lieu of confiscation) of Rs. 4,000, a penalty of Rs. 500 and duty at 20% ad valorem on the tariff value in force at the time of clearance of the goods. On behalf of the person who assembled the cine-projector, the appellant agreed to pay duty and fine. In appeal, the appellant took the plea that the projector was not fitted with arc lamp, reflector mirror and lens and so the assessment should have been on the parts of the projector under Notification No.99/72, dated 17-3-72 and not on the complete projector. The Appellate Collector rejected the appeal holding that was a case where the appellant, through the assembler, had manufactured a cinematograph projector except for the three aforesaid parts and that, therefore, there was no justification for assessing to duty only the three parts of the projector as prayed for.
2. In the Revision Application before the Central Government (which stands transferred to this Tribunal under Section 35-P of the Central Excises and Salt Act for disposal as if it were an appeal presented before it), it is submitted that the appellant had purchased some second hand parts of a cine-projector, costing about Rs. 8,000, and placed an order with a mechanic at Madras for assembling the parts into a cine-projector. Since the appellant and his partners had borrowed money at a high rate of interest, the appellant and the assembler pleaded guilty to the charge of assembly of the cine-projector without licence and paid the duty, fine and penalty levied by the Assistant Collector. The duty demanded was Rs. 6,400 representing 20% of the tariff value of Rs. 32,000 fixed for a completely assembled projector whereas the goods involved were only certain projector parts. Even according to the Dy. Collector's adjudication order, the value of the seized parts was only Rs. 8,300. Without an arc lamp, reflecting mirror and projecting lens, a projector could not be termed a complete projector. In accordance with Notification No. 99/72, only projector heads, sound heads and arc lamps were liable to duty as projector parts. Therefore only the seized projector head and sound head were liable to be charged to duty. The liability to pay duty on the basis of the tariff value fixed for a complete projector, therefore, did not arise in this case.
3. The revision (appeal) was fixed for hearing on 14-3-1983. A letter dated 6-3-83 was received in the Registry on 8-3-83 from Shri P.N.Menon, Consultant on behalf of the appellant stating that the appellant was not available at the given address and that the appeal might be decided on merits on the basis of the record without a hearing.
4. In the revision application (hereinafter referred to as appeal), it has been urged that in the absence of arc lamp, reflector mirror and projecting lens, the goods seized, could not by any stretch of imagination be termed as projector either completely assembled or otherwise.
5. On this basis, the appellants have urged that the seized goods should be deemed to be only parts of cinematograph projector and that, out of the seized goods, the projector heads and sound heads alone are liable to duty in terms of Notification No. 99/72.
6. Shri K.D. Tayal, S.D.R. called upon to address arguments on behalf of the respondent. He submitted that the fact that certain parts namely arc lamp, reflecting mirror and projecting lens totally valued at about Rs. 700 to 800 were missing, should not lead to the position that the goods seized do not constitute a cinematograph projector. He relied on the explanation to Item 37B of the Central Excise Tariff Schedule in support of this stand. The explanation reads thus :- "For the purposes of this item, "Cinematograph projectors" means cinematograph projectors whether in a completely assembled condition or otherwise." He submitted that so long as the assembly of the cinematograph projector had taken place even if a few parts had not been assembled, the mischief of the said item 37B would be attracted.
7. We have given careful consideration to the submissions contained in the memo of appeal and those advanced by Shri Tayal on behalf of the respondent. In view of the above referred explanation to Item 37B of the Central Excise Tariff Schedule it is clear that a cinematograph projector whether it is in a completely assembled condition or otherwise falls within the mischief of Item 37B of the Central Excise Tariff Schedule. The fact that a few parts comprising a minor component of the value of the goods are missing should not, in our view, detract from the position that the seized assembly of projector parts is a cinematograph projector for the purpose of the said tariff item. In this view of the matter we do not see any merit in the appellant's contention in this behalf. However, considering that the value of the seized goods, according to the order of adjudication, was Rs. 8,300 and that the duty leviable has been worked out on the basis of a tariff value of Rs. 32,000 prevailing at the time of clearance of the goods, we are of the view that the fine in lieu of confiscation imposed by the adjudicating authority was somewhat on the high side. Accordingly, we reduce the fine from Rs. 4,000 to Rs. 2,000 only. The consequential relief shall be granted to the appellant within two months from the date of the communication of this order.
8. The appeal is thus partly allowed in the light of the directions given above.