1. Dispute regarding the classification of projection television sets as broadcast television receiver sets for the purpose of claiming exemption under Central Excise laws. (Para 1 , 2 , 3 )
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1993 Supreme(SC) 585
SUPREME COURT OF INDIA
KULDIP SINGH AND P. B. SAWANT, JJ.
Collector of Central Excise, Appellant
Versus
M/s. Fusebase Eltoto Ltd., Respondent.
Civil Appeals Nos. 3005-3007 of 1991, D/- 20-7-1993.
Important Points
The court held that product classification for excise duty depends on 'common parlance' and market perception. 'Projection Television sets' are distinct from 'Broadcast Television receiver sets' in function and configuration, thus qualifying as 'Video Projectors' and not eligible for exemptions meant for broadcast receivers.
Subject
Taxation Law - Excise Duty
Act Referred
Headnote
Central Excise duty - Projection Television sets - Exempt from payment - Assistant Collector, Central Excise and Collector of Central Excise (Appeals) answered question in negative and against respondent - On further appeal by respondent, Customs, Excise and Gold (Control) Appellate Tribunal (the Tribunal) reversed findings of authorities below by its order dated and came to the conclusion that "Projection Television Sets" are same as "Broadcast Television receiver sets" as such the respondent was entitled to exemption claimed - This appeal by Central Excise Department through Collector of Central Excise Meerut is against order of Tribunal - Projection Television sets manufactured by respondent-company are sold under brand names Hotline Projectavision 203, Hotline Projectavision 303, Hotline Projectavision 503 and Hotline Projectavision 222 - A single set consists of a "projectionunit" and a screen. Different models have screens of different sizes - Screen size for model Hotline Projectavision 203 is 200 CM (79"), for Hotline Projectavision 303, screen size is 300 cm (119") etc - Projection-unit, which is placed at a distance from screen, is designed to produce images up to 65 times size of a conventional television - These sets are sold to video parlours, cinema halls, unversities and other institutions for catering to a large audience – Held, learned counsel for respondent that Projector Vision Projection Television sets are capable of receiving television broadcasts as is being done by any other broadcast television receiver set but at the same time two are not same - An ordinary television set has a fixed image in mind of consumer in this country - One never visualises a television set having a projection-unit and a head-screen mounted at a long distance - A television set in imagination of consumer - is a compact set with inbuilt screen which adores drawing room and bed room - It is not disputed, rather it is case of respondent that "projection television set" manufactured by them receives televised image - Video is transmission and reception of a televised image - In other words, it is a television image or the electric signals corresponding to it - It pertains to picture portion of televised programme. Projector is a device for projecting a light beam, an apparatus for throwing illuminated images or motion pictures on screen - Product of respondent-company projects on a screen video signals transmitted from television station and received by it – Court therefore, allow appeals and set aside impugned order of Tribunal dated - As a consequence Court dismiss appeal of respondent before Tribunal - Respondent shall pay costs of litigation which Court quantify - Appeal allowed.
Legal Category Hierarchy
Advocates:
A.S.Madan, D.S.Mahra, KAILASH VASUDEV, P.PARMESHVARAN, Rajesh Mehta, V.BALACHANDRAN, V.LAKSHMI KUMARAN
A.S.Madan, D.S.Mahra, KAILASH VASUDEV, P.PARMESHVARAN, Rajesh Mehta, V.BALACHANDRAN, V.LAKSHMI KUMARAN
Table of Contents
2. Whether projection television sets constitute broadcast television receiver sets eligible for exemption or video projectors subject to duty. (Para 4 , 5 )
3. The court analyzed the product's function, technical configuration, market price, and common parlance to distinguish projection television sets from conventional broadcast television receiver sets. (Para 6 , 7 , 8 )
4. When notifications lack definitions, the identity of a product is determined by its primary function, utility, and how it is known in common parlance. (Para 6 , 7 )
5. Appeal allowed, Tribunal order set aside, and the classification of the product as a video projector upheld. (Para 9 )
6. How is a product identified for excise duty when the relevant notification contains no definition?
The product is identified by the test of common parlance—how it is known in the market and society, based on its primary function, utility, and the mental association of consumers. (Para 6 )
7. Does the ability to receive television broadcasts automatically classify a device as a broadcast television receiver set?
No. Even if a device can receive television broadcasts, it may be distinguished from a broadcast television receiver set if its configuration, function, and market identity differ from the conventional understanding of such sets. (Para 7 )
8. What distinguishes a video projector from a broadcast television receiver set in the context of excise classification?
A broadcast television receiver set is typically a compact unit with an inbuilt screen, whereas a video projector is a device that projects televised images or video signals onto an external screen. (Para 7 , 8 )
JUDGMENT
The question for consideration is whether "Projection Television sets" manufactured by the respondent are the same as the "Broadcast Television receiver sets" for the purpose of earning exemption under the Central Excise laws. The Assistant Collector, Central Excise and the Collector of Central Excise (Appeals) answered the question in the negative and against the respondent. On further appeal by the respondent, the Customs, Excise and Gold (Control) Appellate Tribunal (the Tribunal) reversed the findings of the authorities below by its order dated March 5, 1990 and came to the conclusion that the "Projection Television Sets" are the same as "Broadcast Television receiver sets" as such the respondent was entitled to the exemption claimed. This appeal by the Central Excise Department through the Collector of Central Excise Meerut is against the order of the Tribunal.
2. The Projection Television sets manufactured by the respondent-company are sold under the brand names Hotline Projectavision 203, Hotline Projectavision 303, Hotline Projectavision 503 and Hotline Projectavision 222. A single set consists of a "projectionunit" and a screen. Different models have screens of different sizes. The screen size for the model Hotline Projectavision 203 is 200 CM (79"), for Hotline Projectavision 303, the screen size is 300 cm (119") etc. The projection-unit, which is placed at a distance from the screen, is designed to produce images up to 65 times the size of a conventional television. These sets are sold to video parlours, cinema halls, unversities and other institutions for catering to a large audience. According to the respondent the projectavision is designed to accommodate various inputs such as video cassette recorders, personal computer/IBM, Doordarshan signals, video Camera, video disc-player and others.
3. The excisable goods specified in Notification No. 68/86 dated February 10,1986 are exempt from payment of CentralExcise duty in terms of the said notification. Serial No. 19 in the said notification is as under :-
"19. 85.28 Broadcast television receiver sets (other than monochrome sets) of screen size exceeding 36 centimeters" Rupees 900 per set
Notification No. 160/86 dated March 1, 1986 contains the following entry at Serial No. 10;
"10. 85.28 (i) televison sets in combination with, video recording or reproducing appratus Twenty-five percent ad valorem
(ii) Video monitors and Video projectors Twenty-five percent ad valorem"
4. The claim of respondent for grant of exemption under Notification No. 68/86 was rejected by the Assistant Collector and the Appellate Collector on the ground that the respondent was manufacturing "Video projectors" and as such they were liable to pay central excise duty in terms of Notification No. 160/86. In substance the Departments case was that the goods manufactured by the respondent did not come within the category known as "broadcast television receiver sets".
5. According to the Assistant Collector inbuilt-technology of the projector television receiver set is different than that of a broadcast television receiver set. It was highlighted that the projection set has three cathode rays tubes whereas the ordinary set consists of only one such tube. The cathode-rays tubes used in both types of sets are entirely different in their shape, size and function. The Assistant Collector primarily decided against the respondent-company on the ground that the projection television set is not known as broadcast television receiver set in common parlance of the trade. He accepted the contention of the respondent that the projection television is a television receiver in the sense that it receives the video signals and the images of distant events and objects but he rejected the contentions of the respondents on the following reasoning
"But its function is not confined to receiving the images and making them Visible on the receiver set itself. It extends to their projection outside the receiver set. A ca
