M/S. NORTHERN PLASTIC LTD. ETC. versus COLLECTOR OF CUSTOMS AND CENTRAL EXCISE ETC.

Citation: [1998] 3 S.C.R. 611 · Decided: 14-07-1998 · Supreme Court of India · Bench: S.C. AGRAWAL · Disposal: Appeal(s) allowed

Judgment (excerpt)

MIS. NORTHERN PLASTIC LTD. ETC. 
v. 
COLLECTOR OF CUSTOMS AND CENTRAL EXCISE ETC. 
JULY 14, 1998 
[S.C. AGRAWAL AND G.T. NANAVATl, JJ.] 
Central Excises & Salt Act, 1944/The Customs Act, 1962 : 
Central Excise Tariff/Customs Tariff: Item 3702.20/Heading 3702.41 
Appellant imported 59 jumbo rolls of Photographic Colour Films 
(Unexposed) Positive-In the Bill of Entry it was described as 
Cinematographic Colour Films (Unexposed) Positive-Classified under the 
Excise Tariff Item 3702.20 and under Customs Tariff heading 3702.41-
Claimed exemption of customs and countervailing duty-On examination by 
A 
B 
c 
the customs authorities found to be "colour films-jumbo rolls", not entitled D 
to exemptions-Appellant charged of misdeclaration -Also not found to be 
an actual user (industrial)- After enquiry, Collector found it not to be a 
case of misdeclaration-Accepted the appellant to be an actual user on the 
basis of its SS/ Registration Certificate-CBSC found the order improper and 
asked Collector to apply before CEGAT-CEGAT found that the appellant 
misdeclared the goods and was not an actual user (industrial) in the absence E 
of an industrial licence- Remanded to Collector-Collector charged 
appellant of misdeclaration and unauth~rized importation-Appeal field 
before CEGAT-Challenge to findings regarding misdeclaration and illegal 
import not permitted-personal penalty reduced-On appeal, Held : 
Photographic Film (Unexposed) or Cinematographic film (Unexposed) are p 
covered under asme heading 37.02-/t was not necessary for the appellant 
to describe the goods as jumbo colour Films as there was no separate 
heading for it -
As the goods imported were being and intended to be used 
as Cinematographic Films, those were correctly classified under sub-heading 
3702.20. 
Import & Export Policy, 1988-91 : Chapter 5. Paragraph 56(3) and 
Appendix 6: 
G 
Appellant, a small scale industry registered with Director of Industries, 
UP-Registered for conversion/cutting jumbo rolls into Cinematographic 
Films (Unexposed) 
Positive-Held-Appellant using the imported raw H 
611 
612 
SUPREME COURT REPORTS 
[1998] 3 S.C.R. 
A material for its own use-Furnished its registration certificate at the time of 
customs clearance-Appellant entitled to import the jumbo rolls under Open 
General licence. 
Words & Phrases : 
B 
'Factory'-Meaning of in the context of Industries (Development & 
Regulation) Act, 1951. 
In 1981, the appellant imported 59 jumbo rolls of Photographic Colour 
Films (Unexposed) Positive describing the goods as "Cinematographic Colour 
Films (Unexposed) Positive" falling under Customs Tariff Heading 3702.41 
c and the Central Excise Tariff Item 3702.20 and claimed exemption of customs 
duty under Notification No. 52/86 read with Notification No. 157 /88-Customs 
and of countervailing duty under Notification No. 50/88-C.Ex. The imported 
goods being Item No. 186(1) of Part I of List 8 of Appendix 6 of AM 85-
88, clearance was also sought under the Open General Licence. On 
D examination the goods were found to be "Colour Films Jumbo Rolls" and, 
therefore ,not entitled to the benefit of exemptions under the said notification. 
Consequently, the appellant was charged for misdeclaring the goods as 
"Cinematographic Colour Films (Unexposed) Positive", with a view to evade 
Government revenue. As the appellant was having only SSI Certificate for 
cutting/converting jumbo rolls, the appellant was not considered to be an 
E actual user (industrial). The goods were also not found to be eligible for 
exemption in the rates of duty as claimed in the Bill of Entry. 
After the enquiry, the Collector held that the appellant had not 
misdeclared the goods as the specific description of the goods, in the Bill 
F 
of Entry, had been given and also it was mentioned that the goods, being a 
raw material, were covered by the OGL. The Collector accepting the 
appellant's case that slitting, cutting and perforating is a manufacturing 
process and the appellant had the SSJ registration certificate issued by the 
District Industrial Centre for "Cinematographic Colour Films (Unexposed) 
Positive'', held the appellant eligible to import the said goods as actual user 
G (industrial) in terms of Entry No. 297 of Part I of List 8 of Appendix 6 of 
the Import-Export Policy for the year 1988-91. However, at the same time the 
Collector also heid that the appellant was not entitled to the benefit of 
exemption Notifications Nos. 52/86-Cus and 50/88-C.

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