K.S. Venkataramani, Member (T)

1. The Collector of Customs, Madras has preferred these appeals against a common order dated 13-12-1988 passed by the Collector of Customs (Appeals), Madras by which he had held that cinematograph film, (unexposed), in jumbo rolls is correctly classifiable for additional duty of customs (CVD) under Item 37-I of CET (prior to 1-3-1986) and under Heading 3704 of CET Act, 1985 after that date. He, thereby, set aside the order of the Assistant Collector of Customs, Refund Section, Custom House, Madras dated 16-9-1987 by which she had rejected the 72 refund claims of the respondents herein, M/s. Hindustan Photo Films Mfg. Co. in which they had sought re-assessment of the goods under Heading 3704 CET. The facts of the case in brief are that the respondents, herein, imported goods described as cinematograph film (unexposed) colour positive in 'Jumbo forms' with a specification of an effective width of 112 CMS. This was assessed to CVD by the Custom House under Item 68 CET as 'all other goods, not elsewhere specified', and after 1-3-1986 under Heading 3701.90 CETA as other photographic plates and films in the flat or in rolls, sensitised, unexposed, of any material other than paperboard, paper, etc. The respondents, subsequently, preferred a refund claim seeking re-assessment under Item 37-I CET as cinematograph films, unexposed, and under Heading 37.04 after 1-3-1986 under CETA as cinematograph films, unexposed. This claim was rejected by the Assistant Collector, by her order dated 16-9-1987 by holding that in the imported form, the goods are not fit for being used as cinematograph film because it has to undergo further slitting before being put to use as cinematograph film and that, therefore, the Assistant Collector, held that the goods is only the raw-material for the manufacture of cinematograph film. Further, it was found that basically, all are photographic films which are distinguished by ultimate usage as photographic, cinematographic, X-ray film, etc. The Assistant Collector's order was contested in appeal before the Collector (Appeals), who referred to a clarification by the Government of India F.No. 119/1/88-CX 3 dated 5-9-1988 in which it was clarified that the view that the process of cutting into smaller sizes and repacking of jumbo rolls of sensitised film on which duty of customs including CV duty has been paid will not amount to manufacture for the purpose of Central Excise duty. The Collector (Appeals), further, referred to another clarification by the Finance Ministry that the process of slitting into required width and cutting to required length of duty paid imported jumbo rolls of cinematograph film, graphic film, etc. cannot be treated as process of manufacture for the purposes of levy of C.E. duty and that the process of perforation will not also amount to manufacture since the cinematograph film, in question, will remain cinematograph film only both before and after perforation.

2. Relying on the above views expressed by the Government of India, Ministry of Finance, the Collector (Appeals) upheld the contention of the respondents and concluded that the cinematographic films unexposed in jumbo rolls, is correctly classified under Item 37-I CET before 1-3-1986 and under Heading 37.04 under CETA after that date. The present appeals have been preferred against this order of the Collector (Appeals). Sh. Jayararrian, Ld. SDR, appearing for the appellants, contended that in respect of the position of the classification of jumbo rolls under the erstwhile C.E. Tariff, there is a decision of the Tribunal reported in 1990 (29) ECC 116 (SB) in which the Tribunal has held, by a majority opinion, that cinematographic films unexposed in jumbo rolls is classifiable under Item 37-I of First Schedule of Central Excise Act for levy of additional duty (CVD). However, the Ld. S.D.R. pointed out that with the coming into effect of the Central Excise Tariff Act from 1-3-1986, the Central Excise Tari