1. The question for decision in this appeal originally filed as revision application to the Government of India is whether the appellants' dubbing theatre' should be considered as Cinematograph Laboratory for the purpose of concession under Notification No.50-Cus., dated 1-3-1978. The appellants by B.E. No. 1982, dated 22-10-1980 I.M. No. 2083/80 imported 'dubbing theatre equipment viz.
Recorder, reproducer, Magna Techn. E.L. Console Console, Revertible Prism Projector and Audio mixing console1. The Appellants before the Collector of Customs, Madras claimed concession in terms of Notification No. 50-Cus., dated 1-3-1978, claiming that the goods imported are interconnected to be used for "dubbing" in the sound recording studio with perfect synchronisation of the sound with the visual film. The Collector negated this claim and ordered classification of the goods by his order dated 31-10-1980 on merits.
2. In appeal, the Central Board of Excise & Customs by its order dated 25-7-1981, passed by Sh. J. Datta, Member held that the articles could not be treated as separate and distinct goods warranting separate classification. It was also held that the articles are required for high speed dubbing and recording in a dubbing theatre was clearly established by the technical literature produced by the appellants.
Benefit of the notification was however denied on the ground that the concession under the notification was available to the goods used in Cinematograph laboratories; whereas, the goods imported are to be used by the appellants in their dubbing theatre which cannot be considered to be Cinematograph Laboratory.
3. At the hearing of the appeal, Sh. V. Veeraraghavan, Advocate for the appellants submitted that term 'Laboratory' was not defined in the Customs Act, 1962, Customs Tariff Act, 1975 or Rules and Regulations relating to Customs levy. He referred to dictionary meaning of Laboratory as contained in Readers' Digest Encyclopaedia Dictionary, the Concise Oxford dictionary and several other dictionaries. He also referred to B.P.N. Explanatory Notes page-97, and Chapter 92.11, wherein, it has been mentioned that Instruments for synchronising magnetically recorded sound tracks with the visual film also fall within Heading 90.10. He controverted the order passed by the Member, Central Board of Excise & Customs on the ground that though it held that the articles could not be Treated as separate and distinct goods warranting a separate classification, the order did not indicate a proper classification. He further submitted that all the articles consisted of only one unit and are classifiable under Chapter 90 of the First Schedule to the Customs Tariff Act, 1975. He also referred to definition of Cinematograph Films in Section 2(d) of the Copy Right Act. He also invited our attention to latter orders passed by the Appellate Collector of Customs, Madras in the cases of M/s. Sugathas Dubbing & Preview Theatre Private Limited, Madras (Order-in-appeal No.C.3/1077/82, dated 18-9-1982) and M/s. Suresh Productions, Madras (Order No. C.3/2661/ 1981, dated 8-12-1982), wherein dubbing theatres for the purpose of the Notification were held to be -Cinematograph Laboratories and benefit of the Notification was given to the parties in appeal. He submitted that there was no ground why in respect of similar goods the appellants should be denied the concession under the Notification aforesaid.
4. On behalf of the Respondent, Sh. V.M.K. Nair, S.D.R. at the earlier date of hearing on 7-10-1983 had prayed for time to verify about the later orders to which reference has already been made. Shri Nair informed the Bench that in fact such orders had been passed by the Collector of Customs (Appeals), Madras and that these orders had not been challenged. He further submitted that Customs Notification No. 53, dated 20-8-1982 grants exemption to Cinematograph equipments and apparatus specified in the table annexed thereto and falling within Chapter-90 of the First Schedule to the Customs Tariff Act, 1975. This notification does not make a reference to use in Cinematograph laboratory which was there in Notification No. 50-Cus., dated 1-3-1978.
As the notification stood at the material time, it was necessary that the goods should be covered by the Notification and goods fall within Chapter-90 and be used in Cinematograph Laboratory. He submitted that dubbing theatre for the purpose of Notification cannot be called cinematograph laboratory. He defended the order passed by the lower authorities.
5. Laboratory is not defined in the Customs Act, 1962 or in the Tariff Act or in the Rules made thereunder. As to what should be treated as 'Laboratory' for the purpose of the Notification aforesaid would depend on the facts and circumstances of each case. We find that the Appellate Collector of Customs, Madras (Mrs. Varalakshmi Rajamanickam) made a detailed study with respect to dubbing equipment and similar articles.
She also obtained opinion of the Films Institute of India. After setting out the detailed reasons, she held: From the same study made as to what a cinematographic laboratory is, the Film Institute have opined that the term 'Cinematographic Laboratory' is generally meant as 'processing laboratory' where developing printing etc., are done. The big producers who can invest large amounts of money have a complete processing laboratory including a dubbing theatre and the other producers who cannot invest so much money, have processing facility excluding dubbing theatre; such producers go to the person having dubbing theatre for doing the dubbing part of the film production.
For a good performance of a cinema, sound and sound effects like music, noise and speech are very essential to make the film a success. So dubbing is an essential process connected with making of a film. The following processes are involved in a cinematographic laboratory before the final print is taken.
So every process is mutual and complimentary to the other. In view of the above, dubbing theatre is part and parcel of the cinematographic laboratory. In the dubbing theatre experiments/tests are conducted with sound to get the perfect sound effect and in this respect the dubbing theatre can be called a laboratory.
As work done in the dubbing theatre ultimately goes into the production of a film, the dubbing theatre should be considered as part of a Cinematographic laboratory".
6. It has not been urged that the dubbing theatre of the Appellants in any way is different from those in the two cases, cited in support by the learned Advocate of the appellants. There is no good reason why the appellants' dubbing theatre should not be treated as Cinematographic Laboratory, when these orders have not been challenged and have become final. It is also not urged by the respondent that if dubbing theatre is treated as cinematographic laboratory not all the articles imported by the appellants would get concession of the notification. All the articles imported by the appellants which the Central Board of Excise & Customs found to be one system for which dubbing would have therefore to be given the benefit of concession under the aforesaid notification.
As a result, the appeal is allowed and the appellants' claim for concession under the Notification No. 50-Cus., dated 1-3-1978 accepted with consequential refund to the appellants.