2014 (3) TMI 49 - AT - Central Excise

Classification of Toys and Games as CSH 9504.90 as games as contended by the Revenue or by CSH 9503.00 as toy/puzzle - matter referred to larger bench with the following qustions - a) Whether the products (a) Chip N Dale, (b) Duck Tale Disney, (c) Fox and Geese and (d) Rally are classifiable under heading 9503.00 as held by Judicial Member b)Whether the products (a) Chip N Dale, (b) Duck Tale Disney, (c) Fox and Geese and (d) Rally are classifiable under heading 9504.90 as held by Technical Member.

Issues Involved:
1. Classification of 31 items as either "games" under CSH 9504.90 or "toys/puzzles" under CSH 9503.00.
2. Application of the tests enunciated by the Supreme Court in Pleasantime Products case.
3. Determination of duty and penalties based on classification.

Detailed Analysis:

1. Classification of Items:
The primary issue is whether each of the 31 items manufactured by the assessee should be classified under CSH 9504.90 as "games" or under CSH 9503.00 as "toys/puzzles." The Tribunal was directed to apply the tests enunciated by the Supreme Court in the Pleasantime Products case.

2. Supreme Court's Tests for Classification:
The Supreme Court in Pleasantime Products laid out specific tests to distinguish between "games" and "puzzles":
- Outcome is pre-determined in a puzzle but not in a game.
- There will be clues in a puzzle and not in a game.
- Luck lacks in a puzzle, unlike in a game.
- Element of chance and skill is absent in a toy.

3. Examination of Items:
The Tribunal examined each item based on the product literature and instructions, applying the Supreme Court's tests:

Educational Toys:
- City Games (Paris, London, USA, India): Classified as educational toys because they provide educational content about these cities/countries, involve clues, and have predetermined outcomes.
- Match & Move Memory: Classified as an educational toy as it helps develop visual recall skills.
- Pay Day and Hotel: Classified as games due to elements of chance and skill, no clues, and non-predetermined outcomes.

Toys:
- Travel Ludo, Travel Chinese Checkers, Travel Chess & Draughts: Classified as games due to their competitive nature and similarity to board games like Ludo and Chess.
- Chip N Dale, Duck Tales Disney: Classified as toys because they predominantly provide amusement and involve simple rules with no significant skill required.
- Disney Sorry: Classified as a game due to elements of chance and skill.
- Fox & Geese, Leverage, Junior Monopoly, Rally: Classified as games due to their strategic and competitive nature.
- Mould & Paint: Classified as a toy because it involves creative skills and is not a game.

Reduced Size Models:
- Games of Games: Classified as a toy because it is a reduced size model of real-life games.
- Travel Snakes & Ladders: Classified as a game due to its similarity to Snakes & Ladders.

Puzzles:
- Beeline, Dragster, Stratego, Pictionary, Go to the Head of the Class: Examined individually, but none classified as puzzles because they do not meet the criteria of having predetermined outcomes and clues.

4. Tribunal's Conclusion:
The Tribunal concluded that 12 items should be classified under CSH 9503.00 as toys, while the remaining items should be classified under CSH 9504.90 as games. The demand for duty was restricted to the normal period of limitation, and penalties on the assessee and its manager were set aside due to the classification dispute.

Separate Judgment by Technical Member:
The Technical Member disagreed with the classification of four items (Chip N Dale, Duck Tales Disney, Fox & Geese, Rally) as toys and opined they should be classified as games under CSH 9504.90. The matter was referred to a third member for resolving the difference in opinion.

Summary:
The Tribunal's detailed examination of each item based on the Supreme Court's tests resulted in a mixed classification, with some items being classified as educational toys and others as games. The Tribunal's decision was partially contested by the Technical Member, leading to a referral for a third opinion on the disputed classifications.

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