P.C. Jain, Member (T)

1. One of the main points of controversy in the appeal referred to the Larger Bench now constituted relates to classification of electronic colour scanner Model Magnascan 510. The appellants claim its assessment under Heading 84.35 CTA 1975 whereas the department contends that the classification falls under Heading 90.10 ibid. A Bench of this Tribunal in its judgment in the case of UNITED OFFSET PROCESS PVT. LTD. [MANU/CE/0184/1984 : 1985 (19) ELT 242 - Tribunal] had held that the colour scanner falls under Tariff Heading 90.10. Normal Bench dealing with the appeal of the appellants had some reservations in following the aforesaid judgment of the Tribunal. Hence the appeal referred to the Larger Bench.

2. Another point involved in this present appeal is about the valuation of the goods in terms of Section 14 of the Customs Act.

3. The Larger Bench heard the matter at length on 28th 29th September, 1987 and reserved their judgment. While the Bench was deliberating upon the judgment to be recorded, the learned representative of the department made the misc. application aforesaid with which he enclosed copies of the Bombay High Court judgment (single judge) dated 31.7.87 in writ petition No. 439 of 1981 (Metal Box India Ltd. v. UOI) on customs classification of Vario Chromograph Machine, Model C-296. It was stated before us that this machine was also a colour scanner. The Bombay High Court appointed a technical expert. On receipt of the report of the technical expert, the High Court decided the matter in the following terms :-

"7. Accordingly, Mr. Deepak Agarwal has sent his report dated July 28, 1987 to this Court which was taken on file by me yesterday. In this report he has categorically stated, after making thorough inspection of the machine and after operating, that the Vario Chromograph Machine installed at the factory of the petitioners performs the same functions technically and commercially as that of a precision process camera. I accept this report and on the basis of this I must necessarily hold that the petitioners were entitled to the exemption which was available to them, as the item imported by them would fall under Item No. 77(5) with a foot-note No. 8 of the Tariff."

In the above judgment, the reference to Item No. 77(5) is to that item of the Indian Customs Tariff, 1934 which, inter alia, covered photographic cameras. The corresponding Heading in the successor Customs Tariff Act, 1975 is Heading 90.07. The reference to foot-note No. 8 in the High Court judgment is to exemption Notification No. 23-Customs dated 25.1.69 which laid down a concessional rate of duty for "standard precision process camera for preparing process and photo litho blocks". The successor notification giving the similar exemption is Notification No. 112-Customs dated 1.7.1977.

4. The learned representative of the department requested in the aforesaid misc. application that this judgment of the Bombay High Court, which had come to his knowledge after the Larger Bench had concluded the hearing on 29th September, 1987, should be taken into consideration before deciding the matter. Accordingly, a copy of the application together with a copy of the High Court judgment and other enclosures were served on the appellants and the matter was re-opened and heard again today. Both sides confirmed that the goods involved in the Bombay High Court judgment and the present appeal were similar. Both sides also stated that to their knowledge there was no other judgment contrary to the Bombay High Court judgment. The appellants stated that though they were not giving up their plea that the goods fell under Heading 84.35 of the Customs Tariff Act, they would be satisfied if the Bombay High Court judgment was followed and benefit of the exemption Notification No. 112-Customs dated 1.7.1977 was extended to them.

5. The learned representative of the department stated that since the Bombay High Court had held that the scanner was akin to a pro