1. Dispute over classification of imported photosensitive nylon printing plates under the Customs Tariff—whether they fall under Chapter 37 or Chapter 84. (Para 2 , 3 )
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1995 Supreme(SC) 1276
SUPREME COURT OF INDIA
B. P. Jeevan Reddy, S. B. Majmudar
COLLECTOR OF CUSTOMS AND OTHERS, APPELLANTS
Versus
KUMUDAM PUBLICATIONS (P) LTD. AND OTHERS, RESPONDENTS.
Civil Appeals Nos. 2941-49 of 1991 with Nos. 5002 of 1989, 1230-36 of 1991, 2542-85 of 1987, 209-210, 2023-44 of 1988, 238-40, 248-53, 278-80 of 1991 and 670-76 of 1987,
decided on December 5, 1995.
Important Points
The Court held that the function and end-use of goods are relevant in determining their customs classification. Consequently, photosensitive nylon printing plates used exclusively for printing newspapers and magazines are properly classifiable under Chapter 84 rather than Chapter 37.
Subject
Customs Law - Classification of Goods
Act Referred
CUSTOMS TARIFF ACT: Ch.37, Ch.84
Headnote
Constitution of India, 1950 – Publish of newspapers - Photosensitive plate backed by steel sheet - Respondents who are engaged in printing and publishing of newspapers and news magazines imported what they called printing plates for purpose of their business - Dispute arose as to classification of said goods Assistant Collector took view that these goods fell Chapter Customs Tariff whereas respondents assesses case was that they were properly classifiable Chapter - Chapter Heading Assistant Collector and Appellate Collector held against respondents while Tribunal allowed appeals preferred by respondents assesses agreeing with their contention that said goods are properly classifiable Chapter - Chapter Heading – Held, Actually Chapter deals with machinery mechanical appliances etc - Agreed report team appointed by Tribunal indicates clearly that these plates are meant for and are used for printing purposes - Whether court look at end use or to character and nature of goods they are in main plates employed in printing of newspaper magazines - Tribunal has opined on basis of above material that Toyobo photosensitive nylon printing plates are exclusively used in printing of newspaper and cannot be called photographic plates within meaning of Chapter - They are placed there Chapter Heading - Court are unable to say that conclusion arrived at by Tribunal is not correct - It may not also be entirely correct to say that in no case can end use or function of goods be relevant on question of classification – Three Judge Bench this Court has relied upon function and end use also in determining classification in Indian Tool Manufacturers - In Civil Appeals one of goods in question is Developing Machines - Revenue wanted to classify them Chapter whereas Tribunal has placed them under Chapter - No particular argument has been addressed in this behalf – Court therefore affirm Tribunals view – Appeal dismissed
Legal Category Hierarchy
Table of Contents
2. Revenue argues classification depends on nature and scientific nomenclature over end use; assessees contend the goods are printing plates used exclusively for printing. (Para 4 )
3. The court observed that the plates are used exclusively for printing and that end use or function can be relevant in determining classification. (Para 5 )
4. Classification of goods can be determined by their nature, character, and end use, especially when used exclusively for a specific purpose. (Para 5 )
5. Appeals by both the Revenue and the assessees are dismissed, affirming the Tribunal's classification of the disputed goods. (Para 7 , 8 )
6. Is the end use of a product relevant for customs classification?
Yes, the court held that end use or function can be relevant in determining the classification of goods, referencing judicial precedent. (Para 5 )
7. How are photosensitive nylon printing plates used for newspaper printing classified?
They are classifiable under Chapter Heading 84.34 as plates prepared for printing purposes, as they are used exclusively for printing and known as such in common parlance. (Para 3 , 5 )
8. Can an exemption notification be used as a contemporaneous exposition for classification?
Only if there is material evidence proving the goods referred to in the notification are the same as the goods in question. (Para 5 )
ORDER
1. This batch of appeals (except Civil Appeals Nos. 2023-44 of 1988 and 670-76 of 1987) are preferred by the Revenue against the various judgments of the Tribunals. Civil Appeals Nos. 2023-44 of 1988 and Civil Appeals Nos. 670-76 of 1987 are preferred by the assessees. We shall first take up the appeals preferred by the Revenue.
2. The respondents who are engaged in printing and publishing of newspapers and news magazines imported, what they called, "printing plates" for the purpose of their business. A dispute arose as to the classification of the said goods. The Assistant Collector took the view that these goods fell under Chapter 37.01/08 of the Customs Tariff whereas the respondents/assessees case was that they were properly classifiable under Chapter 84 - Chapter Heading 84.34. The Assistant Collector and the Appellate Collector held against the respondents while the Tribunal allowed the appeals preferred by the respondents-assessees agreeing with their contention that the said goods are properly classifiable under Chapter 84 i.e. Chapter Heading 84.34.
3. For deciding the question of classification, we must first know what these goods are. With a view to ascertain the same, the Tribunal thought it proper to direct the parties to go and inspect certain printing establishments and submit an agreed statement of facts as to the nature and character of the goods in question. Accordingly, a team consisting of Shri Ravinder Bhatt, Advocate for the assessees, Shri J. Gopinath and Shri A. S. Sundar Rajan representing the Revenue, visited the Times of India and the Patriot printing presses situated in New Delhi. They, however, found that these two establishments were no longer using the goods in question, namely, Toyobo photosensitive nylon printing plates. They found that the Times of India press was using the photosensitive plate which is backed by a steel sheet. The team found that but for the difference in the backing material, the said photosensitive plate backed by steel sheet is no different in substance from the photosensitive nylon printing plate. They then set out the nature, character and functioning of the said plates in the following words :
"This photosensitive plate with steel backing is subjected to two exposures to ultraviolet rays which results in transfer of the film negative matter to the photosensitive plate. At this stage there is no physical change in the sensitive plate except the exposure which results in the light transmission only. However, the sensitive plate is non-sensitised. This exposed plate is further subjected to chemical processing in nylon washout unit which results in physical images coming in the form of relief on the plate. The plate which has the relief character is directly taken on the printing machine which is actually used for printing of the newspaper. In the photosensitive nylon printing plate used by M/s Kasturi & Sons, the same process is said to have been adopted except that in place of steel mounting/backing in the case of Times of India, they are using certain adhesive type of tapes to position the printing plate on the rotary machine."
On the basis of the above material, the Tribunal held that the printing plates in question are used exclusively for printing purpose though it may be that their use involves photographic principle. They also recorded a finding that in commercial or common parlance these printing plates are dealt with and are known as printing plates and not photographic plates or films. They also referred to the fact that at the time of their clearance they were described as printing plates and not as photographic plates or films.
4. Dr. Gauri Shankar Murthi, learned counsel for the appellant-Revenue, submitted that the end use of the goods is not relevant in the matter of determining the classification. According to him what is relevant is the nature and character of the goods and if they have a scientific nomenclature, the scientific literature in their be
