1986 (2) TMI 179 - AT - Central Excise

Summary

Issues Involved:

1. Classification of Step and Repeat Machine.
2. Classification and concession eligibility of Screen Copying Installation.
3. Concession eligibility of Automatic Danagraf Camera.

Issue-Wise Detailed Analysis:

1. Classification of Step and Repeat Machine:

The primary issue was whether the Step and Repeat Machine imported by M/s. Bharat Vijay Mills should be classified under Heading 84.34 or Heading 90.10 of the Customs Tariff. The Assistant Collector classified it under Heading 90.10, while the Appellate Collector classified it under Heading 84.34. Heading 84.34 pertains to machinery for type-founding or type-setting and machinery for preparing or working printing blocks, plates, or cylinders. Heading 90.10 relates to apparatus and equipment used in photographic or cinematographic laboratories, including photocopying and thermo-copying apparatus.

The Appellate Collector concluded that the Step and Repeat Machine was not a photocopying machine due to its high cost and its function of printing designs on screens, making it more akin to a printing machine. However, the Tribunal found an error in this reasoning, stating that Heading 84.34 concerns machinery used in printing of matter on papers, such as reading matter or pictorial matter, and other graphic reproductions used in communication. The Tribunal emphasized that the Step and Repeat Machine does not fit into this category as it is used for printing repetitive designs on textiles, leather, wallpaper, wrapping paper, linoleum, and other materials.

The Tribunal concluded that the correct classification for the Step and Repeat Machine is under Heading 84.40, which covers machinery for printing repetitive designs on various materials, not for communication purposes. The Tribunal directed the machine to be assessed under Heading 84.40, disagreeing with both the Assistant Collector and the Appellate Collector.

2. Classification and Concession Eligibility of Screen Copying Installation:

The Screen Copying Installation was classified under Heading 90.10 by both the Assistant Collector and the Appellate Collector. The dispute was regarding the eligibility for concession under Notification No. 112/77. The Appellate Collector had granted the concession, but the Government's show cause notice proposed to withdraw it.

The Tribunal noted that there was no dispute raised by the notice for review regarding the classification of the Screen Copying Installation. The importers attempted to challenge this classification during arguments, but the Tribunal did not permit it. The Tribunal upheld the Appellate Collector's decision to grant the benefit of the concession under Notification No. 112/77 for the Screen Copying Installation.

3. Concession Eligibility of Automatic Danagraf Camera:

The Automatic Danagraf Camera was assessed under Heading 90.07, and the dispute was about its eligibility for concession under Notification No. 112/77. The Appellate Collector granted the concession, but the Government argued that the notification was meant for cameras used in the printing industry, not for textile printing.

The Tribunal found that there is no such thing as a "printing industry" but only different kinds of printing processes. The notification does not exclude cameras used in textile printing. The Tribunal agreed with the Appellate Collector that the camera is used in preparing process blocks and is a precision process camera. Therefore, the Tribunal upheld the Appellate Collector's decision to grant the concession under Notification No. 112/77 for the Automatic Danagraf Camera.

Conclusion:

The Tribunal concluded that the Step and Repeat Machine should be classified under Heading 84.40, not Heading 84.34 or 90.10. The classification and concession eligibility for the Screen Copying Installation under Heading 90.10 were upheld, and the concession eligibility for the Automatic Danagraf Camera under Heading 90.07 was also upheld. The Tribunal dismissed the appeal and upheld the decisions of the Appellate Collector regarding the concessions under Notification No. 112/77.