1980 (8) TMI 200 - HC - Central Excise

Summary

Issues Involved:
1. Whether the appellate and revising authorities failed to exercise independent judgment due to the Circular dated February 10, 1969.
2. Whether the censorship certificate length of the film is liable to excise duty under Item No. 37 of the Central Excises and Salt Act, 1944.

Issue-wise Detailed Analysis:

1. Independent Judgment by Authorities:
The respondents argued that the appellate and revising authorities were guided solely by the directions issued in the Circular dated February 10, 1969. They contended that the authorities did not exercise their independent and unfettered judgment, which is required for quasi-judicial powers. The trial judge accepted this contention, noting that the authorities could not have passed orders merely in obedience to the Circular's directions. The appellants, represented by Mr. Dalal, conceded this point and did not dispute the trial judge's finding on this issue.

2. Liability of Censorship Certificate Length to Duty:
The primary contention was whether the censorship certificate length of the film attracted excise duty under Item No. 37. The respondents argued that the censorship certificate length should not be included in the excisable length of the film. The trial judge accepted this argument, declaring the levy of duty on the censorship length illegal and setting aside the impugned orders and demand notice.

The appellants argued that the censorship certificate length becomes an integral part of the original film before it is exhibited, thus falling under Entry No. 37. They also suggested that it could be covered by the expression "films not otherwise specified" in Item No. 37. However, the court noted that the amendment by the Finance Act, 1969, did not materially alter the liability regarding the censorship length.

The court examined the Cinematograph Act, 1952, and its rules, which define "film" and the process for obtaining a censorship certificate. The Act and rules indicate that a completed film must be presented to the Board of Film Censors. The certificate, affixed to the film as a trailer, is merely a mark of certification and does not constitute a new film.

The court emphasized that the meaning of terms in fiscal statutes should align with how they are understood in trade and commerce. The censorship certificate length is not regarded as a separate film by industry standards or spectators. The court referenced the Gujarat High Court's decision in Cibatul Ltd. v. Union of India, which rejected the notion that affixing a trademark creates a new manufactured product.

Conclusion:
The court upheld the trial judge's decision that the censorship certificate length of the film is not liable to duty under Entry No. 37. The appeal was dismissed with costs quantified at Rs. 600.