Whether cutting, slitting and perforation of jumbo rolls for cinematographic films would amount to 'manufacture' or not - Central Excise - 15/89

Whether cutting, slitting and perforation of jumbo rolls for cinematographic films would amount to 'manufacture' or not Circular No. 15/89 Dated 24-2-1989 [From F. No. 119/1/88-CX.3] Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Whether cutting, slitting and perforation of jumbo rolls for cinematographic films would amount to 'manufacture' or not. Attention is invited to the instructions contained in Ministry's letter F. No. 119/1/88-CX.3, dated 5-9-1988 and letter F. No. 119/1/88-CX.3, dated 16-12-1988 and to say that a doubt had been raised as to whether the processes of cutting, slitting and performation of jumbo rolls for cinematographic films would amount to 'manufacture' or not. 2. The matter has been examined. The facts, as reported to the Board, were not jumbo rolls for cinematographic films, as imported, had a full width ranging from 1.15 metres to 1.455 metres. The finished cinematographic film had to be 35 mm or 16 mm width. The jumbo roll had to be cut and slit into these sizes. But apart from the process of cutting and slitting, the more important process required for making it into cinematographic film was perforating the film on sides in running length of the film. The perforations were necessary for the film to be held and run both in the movie cameras and in the movie projectors. The perforation also had a great functional value in sound recording. Unless, therefore, the process of cutting, slitting and perforation were undertaken on the over-one metre wide jumbo roll, the jumbo roll was incapable of being used as cinematographic film. In the form and condition imported, the jumbo roll was only an intermediate product for manufacture of finished cinematographic film and not a finished cinematographic film itself. 3. In view of these facts, the Board is of the view that cutting, slitting and perforation of jumbo rolls into finished cinematographic films, ready for use, would amount to 'manufacture'. The position under the existing Tariff entries, read with exemption notification No. 40/88-C.E., dated 1-3-1988, would be as under :- (i) jumbo rolls for cine films would fall under sub-heading 3702.90 and would pay the concessional duty of Rs. 24/- per sq. metre under the notification and (ii) After cutting, slitting and perforation, the finished cinematographic film would fall under sub-heading 3702.20. It would then pay the duty at the rate of Rs. 1.50 per metre under the Tariff heading. 4. The instructions contained in Ministry's letter F. No. 119/1/88-CX.3, dated 5-9-1988 may be treated to have been modified to the extent mentioned above. 5. The above guidelines may be brought to the notice of the lower filed formations and the trade interest may also be suitably advised. 6. All pending assessments may be finalised on the above basis.