Per Justice K. Shreedharan :

These appeals have come up before this larger Bench on a reference made by a Bench of two Members. Appellants imported drawings, designs, plans, etc. from M/s Zimmer AG, Germany, under an agreement for transfer of technology for the purpose of setting up a plant to manufacture polyester, polyester filament yarn and Polyester staple fibre. Commissioner of Customs, New Delhi, found the goods as classifiable under Customs Tariff Heading 4911.99 "other printed matters not elsewhere specified or included under Chapter 49. "in this view, the goods imported were valued at DM 32,66, 900.00 equivalent to Rs. 7,50,61,438.00 and imposed duty thereon. The Commissioner took the view that the goods are liable to be confiscated, but they are not available for confiscation in the case. Consequently, he imposed a penalty amounting to Rs. 5 lakhs each on three of the Directors of the Company. This action of the department is under challenge in these appeals.

2. Case put forth by the Company is that the imported materials are printed books which are to be classified under Heading 49.01 of the Customs Tariff Act, 1975 as they are books containing technical knowledge. The imported goods are eligible to get the benefit of exemption from duty as per serial No. 10 in the Table annexed to Notification No. 25/95-Cus dated 16.3.1995. The imported materials were in 97 volumes. 23 volumes alone contained pictorial drawings/designs, while 46 volumes contained textual materials. Remaining 28 volumes were textual matters with a few drawings and designs. Therefore, they contended that the entire document could not be held to be drawings/designs in pictorial form falling under Chapter Heading 49.11 of the Customs Tariff Act. Yet another contention that was raised by the appellant was that the value of these materials imported has been wrongly assessed and duty levied.

3. The question of classification of the goods imported was considered by the Bench which referred to the matter to a larger Bench. While dealing with the issue, the Bench, which referred the matter, considered various decisions placed before them. On similar set of facts, this Tribunal in Roto Inks Pvt Ltd vs. Collector of Customs, 1990 (47) ELT 398,Tata Consultancy Service vs Collector of Customs, 1991 (53) ELT 454, Tata Elxi India Ltd., 1995 (78) ELT 370 and Lakshmi Cement vs Collector of Customs, 1996 (84) ELT 271, took the view that materials similar to the one in this case were taken as books. A contrary view was taken by the Tribunal in the decision in Tractors and Farms Equipment Ltd. vs. Collector of Customs, 1993 (68) ELT 234. Because of these conflicting views expressed by Benches of coordinate jurisdiction of this Tribunal issue of classification of the imported goods as to whether it falls under Heading 4901.99 or 4911.99 of the Customs Tariff Act, 1975 was referred to the larger Bench.

4. Tariff Item 49.01 deals with printed books, brochures, leaflets and similar printed matter whether or not in single sheets. Dealing with this Tariff Item, HSN gives the following note regarding books and booklets:-

"(A) Books and booklets consisting essentially of textual matter of any kind, and printed in any language or characters, including Braille or shorthand. They include literary works of all kinds, text-books and technical publications; books of reference such as dictionaries, encyclopedias and directories; catalogues for museums and public libraries (but not trade catalogues); liturgical books such as prayer books and hymn books (other than music hymn books of heading 49.04); children's books (other than children's picture, drawing or colouring books of heading 49.03). Such books may be bound (in paper or with soft or stiff covers) in one or more volumes, or may be in the form of printed sheets comprising the whole or a part of the complete work and designed for binding. Dust covers, clasps, book-marks and other minor accessories supplied with the books are re