2001 (3) TMI 688 - AT - Customs

Summary

Issues Involved:

1. Eligibility of the imported item for concessional rate of duty under Customs Notification No. 81/84.
2. Classification of the imported item under the appropriate heading of the Customs Tariff.
3. Interpretation of the term "Automatic Film Processor for use in the Printing Industry" as per the notification.
4. Applicability of the notification to the importer who is not engaged in the printing industry.

Detailed Analysis:

1. Eligibility for Concessional Rate of Duty:

The primary issue is whether the imported item, RD Continuous Wet/Dry Motion Picture Printer 35 MM, qualifies for a concessional rate of duty under Customs Notification No. 81/84. The Commissioner (Appeals) held that the item is eligible for the concessional rate, describing it as an "Automatic Film Processor for use in the Printing Industry" under Chapter Heading 90 of the Customs Tariff. However, the Assistant Commissioner initially denied this benefit, arguing that the item is not an automatic film processor for the printing industry but is used in cinematographic color laboratories.

2. Classification Under Customs Tariff:

The Assistant Commissioner classified the item under heading 90.10 but denied the concessional assessment, stating it is not an automatic film processor for the printing industry. The Commissioner (Appeals) reversed this, asserting that the item, though termed differently by various international suppliers, falls under heading 9010.20, which covers apparatus and equipment for photography (including cinematography laboratories). The Commissioner drew support from a Tribunal judgment (1989 (43) E.L.T. 534) to extend the concessional rate, interpreting the item as an automatic film processor.

3. Interpretation of "Automatic Film Processor for use in the Printing Industry":

The Revenue contended that the item is not an automatic film processor for the printing industry but a motion picture printer used in film production. The technical details provided by the Revenue described the item as a printer that transfers images from negative to positive film using a contact printing procedure, distinct from a processor that develops latent images into visible ones using chemicals. The Revenue emphasized that the notification's benefit is specific to automatic film processors used in the printing industry, not motion picture printers.

4. Applicability to Non-Printing Industry Importer:

The Revenue argued that the importer, engaged in film production, does not qualify for the notification's benefits as they are not part of the printing industry. The Tribunal in C.C.E. v. Garden Silk Mills (P) Ltd. [1992 (61) E.L.T. 670] held that the term "printing industry" should be understood in its commercial trade parlance, not broadly to include film production. The Commissioner (Appeals) erred in extending the benefit to an industry not engaged in printing.

Conclusion:

Upon reviewing the submissions, the Tribunal concluded that the Revenue made a clear case. The imported item, described in the invoice and technical literature, is used in the cinematography industry, not the printing industry. The notification's terms specify use in the printing industry, and the importer does not meet this criterion. The Tribunal referenced the Larger Bench judgment in Light Publications Ltd. v. C.C.E., Mumbai [2000 (121) E.L.T. 455], which emphasized that end-use consideration and trade parlance tests are not decisive for classification. Consequently, the benefit of the notification cannot be extended to the importer. The Tribunal allowed the Revenue's appeal, restoring the Assistant Commissioner's order and denying the concessional rate of duty for the imported item.