REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4513 OF 2005

|M/S. HCL LIMITED |.....APPELLANT(S) |

|VERSUS | |

|COMMISSIONER OF CUSTOMS | |

|NEW DELHI |.....RESPONDENT(S) |

J U D G M E N T

A.K. SIKRI, J.

Classification of the machines known as Risograph, which

are imported by the appellant M/s. HCL Limited, is the issue involved in

the present appeal. The question is as to whether Risograph is an office

machine having duplicating function and thus to be classified under sub-

heading 8472.90 of the Customs Tariff Act, 1975 or is it a printing machine

to fall under sub-heading 8443.50. The main chapter under which both the

sub-headings fall is Chapter 84 which deals with 'Machinery and mechanical

appliances'. Sub-heading 84.43 thereof relates to 'Printing machinery;

machines for uses ancillary to printing' and various entries under this sub-

heading are as follows:

|84.43 | |Printing machinery; machines for uses | |

|8443.11 |- |Reel fed |65% |

|8443.12 |- |Sheet fed, office type (sheet size not |65% |

|8443.19 |- |Other |65% |

|8443.21 |- |Reel fed |65% |

|8443.29 |- |Other |65% |

|8443.30 |- |Flexographic printing machinery |65% |

|8443.40 |- |Gravure printing machinery |65% |

|8443.50 |- |Other printing machinery |65% |

|8443.60 |- |Machines for uses ancillary to printing |65% |

|8443.90 |- |Parts |65% |

Sub-heading 84.72, on the other hand, deals with 'Other office machines'

and includes duplicating machines. Various entries under this sub-heading

read as under:

|84.72 | |Other office machines (for example, | |

| | | | |

|8472.10 |- |Duplicating machines |65% |

|8472.20 |- |Addressing machines and address plate |65% |

|8472.30 |- |Machines for sorting or folding mail or |65% |

|8472.90 |- |Other |65% |

As per the appellant-assessee, Risograph machine is a printing machine

which should be covered by sub-heading 8443.50, namely, 'other printing

machinery'. On the other hand, the respondent-Revenue has taken the

position that it is a specie of duplicating machine and falls under the sub-

heading 8472.90, viz. 'Other'. Though under both the sub-headings the

import duty is 65%, however, insofar as printing machinery is concerned, by

virtue of Notification No. 59/94-CUS dated March 01, 1994, which includes

Chapter Heading 84.43, the duty is to be calculated at the rate of 25% ad

valorem. That is the precise reason behind the present lis between the

parties

From the aforesaid, one thing is clear. Risograph machine does not fit in

any of the specific descriptions contained either in sub-heading 84.43 or

84.72. Both the parties are trying to fit it in the respective residual

clauses viz. “Other printing machine” or “Other” respectively. Therefore,

what needs to be examined is as to whether the Risograph machine would

belong to the family of 'printing machinery' or it belongs to the clan of

'duplicating machine'. Right from the Order-in-Original passed by the

Adjudicating Authority, Commissioner of Customs (Appeals) to the Customs

Excise and Service Tax Appellate Tribunal (CESTAT), the view taken is in

favour of the Revenue thereby holding the Risograph machine to be in the

nature of a duplicating machine, which does not qualify to be a printing

machine at all. The Tribunal, while holding that it is to be classified as

an office machine having duplicating function, has relied upon its earlier

judgment in the case of Pioneer International v. Collector of Customs,

Kandla[1]. The attempt on the part of the appellant to demonstrate that it

does printing job and is improperly referred to as a duplicating machine

has not cut any ice with the Tribunal which has chosen to follow its own

decision in the case of Pioneer International. In a case like this, the

first query of the Court was as to whether in the case of Pioneer

International any appeal was preferred. Answer given was in the negative,

which means that the correctness of the order of the Tribunal in Pioneer

International was not tested in this Court.

Questioning the wisdom of the authorities below with the contention that

they have arrived at incorrect conclusion in this behalf, it was argued by

the learned counsel for the appellant that a detailed reply dated February

01, 1995 was filed to the show-cause notice dated January 13, 1995 issued

by the Assistant Collector of Customs contending that the machine is

classifiable under sub-heading 8443.50. It was pointed out that in support

of the aforesaid plea taken by the appellant it had enclosed opinions from

various customers who were using the Risograph machine as a printing

machine and also the assessment by the Japanese Customs specifically

classifying the machine under sub-heading 8443.50. The appellant

categorically brought to the notice of the Assistant Commissioner the

following facts for the purpose of classification:

(a) Riso Kagaku Corp, the manufacturers of Risograph, were themselves

clearing the machine under sub-heading 8443.50 of the classification

without raising any objection;

(b) test of trade parlance was in favour of the appellant wherein

Risograph is commercially known and understood as a digital printing

machine in India as well as abroad, as evident from the declaration of the

manufacturers;

ground to say that it is not a printing machine when all other printing

machines require an original in some form or the other, be it in the form

of plates or digital images;

(d) HSN Explanatory Notes clearly support the classification of the

machine under Chapter Heading 84.43 wherein it specifically provides that

in addition to normal type of printing machine Chapter Heading 84.43 also

cover special machines such as small office printing machines which operate

by means of printing type or by offset process, and which are improperly

referred to as 'duplicating machines' because their operating principles

and appearances are similar to those of duplicating machines, no doubt

referring to machines like Risograph;

(e) even if principles of duplication are involved, Chapter Heading 84.72

would not be attracted because the HSN Explanatory Notes clearly provide

that the said heading specifically excludes small printing machines even if

intended for office use; and

(f) Risograph machine functions in the principles of printing machines as

it uses ink drums and squeegee rollers therein to print images similar to

the process of screen printing.

Besides this, the appellant explained in detail the

technical specifications of a Risograph machine and its functioning and

also explained that the principle of Risograph is akin to screen printing

for which the appellant submitted technical literature. Learned counsel

for the appellant submitted that the aforesaid aspects are totally ignored

by the authorities below and insofar as the Tribunal is concerned, it has

conveniently omitted to look into these aspects by blindly following its

decision in Pioneer International and has erred in the following manner

thereby:

(a) The opinion rendered by the DGTD/Deputy Chief Controller of Imports

and Exports is in favour that the Risograph is a printing machine and such

technical opinion has not been overcome by the impugned order. There is no

rebuttal to the opinions obtained from DGTD etc. by the Revenue. A number

of other buyers have certified that the machine is a printing machine and

not rebutted by the Revenue.

(b) The Japanese Customs have classified the Risograph only under Chapter

Heading 84.43 and this position is not disputed even by the Indian Customs.

transfer the image by utilising a thermal head to make masters used for

printing, and hence the classification of the Risograph can only be under

that Chapter Heading.

(d) Risograph does not cut stencils but makes masters of the image to be

printed.

(e) Chapter Heading 84.72 is a residuary entry and the HSN specifically

rules out classification of the Risograph under that heading.

(f) The bare literature of the Risograph Machine clearly shows that the

machine is nothing but a printing machine.

(g) The Tribunal in para of the order in Pioneer International has held

that the Risograph is used to reproduce copies and does not have any

mechanism to print any original matter. This is totally incorrect inasmuch

as once the master is made then from the master, by the principle principle

using ink, which flows through the pores of the paper/plastic master, fresh

prints are taken out. There is no copying principle as in a photocopying

machine.

(h) Operation Guide itself shows how the master is first made and

thereafter prints are taken out and hence the Conclusion of the Tribunal in

para 9 in Pioneer International is totally incorrect and perverse.

(i) In the case of offset printing, as per the Tribunal, the impression

is taken on a rubber roller and then on to the paper. In other words, the

master is made which is transferred to the rubber rollers, which thereafter

prints on the blank paper. In the present case, the Risograph makes the

master and from the master prints are obtained and hence it is nothing but

a printing process. The process of making master is akin to the printing

plates made in the printing industry and there is no escape from this

conclusion. Moreover, the inked prints obtained as per the technical

literature of the Risograph is the same as what is recorded in para 10 of

the order in Pioneer International, that is 'offset printing is a process

in which the inked impression is made on to the paper'. In the case of the

Risograph machine, ink goes through the pores of the long fibred paper used

in the paper plastic master to make the prints.

(j) The master made by the Risograph is not like the stencil which is a

simple process in stencil duplicating machine, but the master is by the

printing technology principles for making the master. Such stencil making

process for printing is indeed recognised in the HSN Explanatory Notes

inasmuch as Heading 84.43 even covers screen printing machines using a

stencil screen band. Thus, the Risograph, after making the master, prints

as in the case of an ordinary printing machine. It is incorrect to equate

the Risograph master to an ordinary tencil cut out on a typewriter for use

in a stencil duplicating machine.

Mr. K. Radhakrishnan, learned senior counsel appearing for the Revenue, on

the other hand, took us through the reasons given by the Assistant

Commissioner as well as the Commissioner (Appeals) in support of their

findings and also relied upon the Tribunal's decision in Pioneer

International for the reasons given therein and submitted that the impugned

order of the Tribunal does not call for any interference. He further

submitted that Risograph machine is not a machine to print original matter.

Master board is only for reproduction. Giving details of the Risograph

machine, he submitted that the Risograph works by the process of automatic

digital scanning, thermal screening duplicating systems. The principal

operations involved in the Risograph printer are screening, master making

and printing. The printer's scanner consists of photo sensors comprising

of light emitting devices and of photo detector. The light emitted from

the light emitting devices strikes the original. The light is reflected by

lighter/white area of the original, whereas the light falling on the darker

area of the original is absorbed. The photo detector detects the reflected

light and reads white and black areas of the original, as read by the

scanner. The thermal head, which consists of hundreds of heat emitting

elements, is used to make the master copy on the basis of the signal

received from the image scanner. This master copy is exactly similar to a

stencil used in a duplicating machine, which is then loaded on to the drum.

The ink which is carried in the drum pieces through the micro-pores in the

master on the paper when it is fed underneath the rotating drum. It is,

therefore, submitted that Risograph is nothing but a transformation of the

duplicator with certain additional functions. The afore-mentioned process

clearly indicates that there are no principles of offset printing or

photocopying involved. It is further submitted that the principal function

is that of a duplicating machine and cannot be treated as a offset printing

machine.

He also submitted that on February 02, 1993, the Conference of Collector of

Customs examined under which chapter tariff heading Risograph should be

classified. The Collectors' Conference, after examining the detailed

catalogue and working of Risograph, came to the conclusion that the machine

is a duplicating machine and, therefore, appropriately classifiable under

Heading 84.72. The Collectors' Conference also came to conclusion that

Risograph is more appropriately classifiable under sub-heading 8472.10.

He, thus, summed up his arguments by contending that printing and

photocopying were somewhat overlapping in the instant case. However,

insofar as Risograph machine is concerned, unlike normal printing machines,

original goes into the said machine and master copy is made inside the

machine and then copies are prepared/taken. Simply because it is able to

make 130 copies in one minute would not make it a printing machine, but it

was only a high quality photocopy machine with following features:

A. The following three systems function in tandem to produce 130 copies

or so per minute:

|(a) |Master making system |: |High-speed Digital Scanning |

| | | | |

|(b) |Printing system |: |Automatic Stencil Duplicating |

| | | | |

|(c) |Image scanning system |: |Flat-bed scanner moving system|

Thus, the specification itself establishes that the printing

system inside the Risograph is an Automatic Stencil Duplicating System.

B. The input is the original and the output is the copy of the original.

C. Technology in Risograph is simple, highly reliable, speed-wise far

more superior and cost-wise less expensive than a standard photocopier.

D. Per contra, in printing there is no original. The original has to be

printed.

E. The concepts of Common Parlance and Principal Function ensure that

the Risograph merits classification in sub-heading 8472.90.

According to Mr. Radhakrishnan, Common Parlance theory shall

also apply in this case inasmuch as in the market and to the general

consumers of this product, it was known as photocopying/ duplicating

machine only and not as printing machine, which was its principal function.

We have given our due consideration to the aforesaid submissions of the

learned counsel for the parties and have also gone through the material as

well as literature produced by the learned counsel in support of their

respective submissions. In a matter like this it is obvious that we have

to understand what is duplicating machine and what is printing machine and

how they differ from each other. Thereafter, we will have to take note of

the technical specifications and functioning of the machine in question,

namely, Risograph Machine, to enable us to find an answer as to whether it

fits the description of a duplicating machine or a printing machine. For

better understanding of the matter and to answer the question

appropriately, we may first scan through certain statutory and other

relevant provisions.

As already noted above, Chapter Heading 84.72, applies to 'Other office

machines, includes duplicating machines'. HSN Explanatory Notes to Chapter

Heading 84.72 explains that the term 'office machine' is to be taken in a

wide general sense to include all machines used in offices, shops,

factories, workshops, schools, railway stations, hotels, etc., for doing

'office work' (i.e. work concerning the writing, recording, sorting,

filing, etc., of correspondence, documents, forms, records, accounts,

etc.). It, thereafter, gives the description of duplicating machines,

which is included in the aforesaid Heading, as under:

“Duplicating machines of the hectograph type (e.g. gelatin or spirit

duplicators), and stencil duplicating machines which operate with waxed

paper stencils previously cut by a stylus or on a typewriter. The heading

includes small presses designed for use with hectographic apparatus.

But it excludes small printing machines (e.g. letterpress,

lithographic or offset printing machines) even if intended for office us,

and duplicators using embossed plastic or metal sheets (including such

machines which can also operate with stencils) (heading 84.43), and

photocopying or thermocopying apparatus and microfilm apparatus (Chapter

90).”

The HSN Explanatory Notes makes it amply clear that small printing

machines, even if intended for office use and even duplicators using

embossed plastic or metal sheet, which can also operate with stencils, and

photocopying etc. are specifically excluded. What follows from the above

is that if there is a small printing machine like letterpress, lithographic

or offset printing machine, which does the printing work and also, at the

same time, performs duplicating work with stencils or otherwise and even

photocopying work, it would still be treated as a printing machine and not

duplicating machine.

This would lead us to the description of 'printing machinery' as given in

HSN Explanatory Notes to Chapter Heading 84.43. It is stated therein that

this heading covers all machines used for printing by means of the type,

printing books, plates or cylinders of the previous heading and excludes

the following:

“(a) Office hectograph or stencil duplicating machines, addressing

machines and other office machines of headings 84.69 to 84.72.

(b) Photocopying or thermocopying apparatus (e.g. for the production of

blue prints, plans, etc., or for the reproduction of documents, picture

postcards, etc.) (Chapter 90).”

HSN Explanatory Notes further clarifies that this Heading

includes the following:

“(1) Machines for printing a repetitive design, repetitive wordings or

overall colour on textiles, wallpaper, wrapping paper, rubber, plastics

sheeting, linoleum, leather, etc.

(2) Ancillary machinery (whether or not presented separately) such as

feeders and folding machines, provided they are specially designed as

ancillary machines to printing machines.”

Thereafter, description of 'printing machinery' is given by dividing it

into three main categories, namely, (i) printing presses, (ii) cylinder

printing machines, and (iii) Rotary presses. Insofar as printing presses

are concerned, the variety thereof is stated in the following manner:

“(i) Ordinary presses, used particularly for printing artists' engravings

or proofs. In their simplest form they usually consist of a fixed

horizontal slab (or bed) to hold the forme, cliché or plate to be

reproduced, and a movable plate which is pressed against the bed by means

of a screw or lever mechanism; the paper sheet is interposed and backed

with a special material (blanket) to distribute the pressure evenly; inking

is done by hand or mechanically.

(ii) Platen presses; these are much more powerful but similar in

principle. The movable pressure plate (or platen), with the blanket and

paper sheet is almost horizontal, and closes like a jaw against the type

matter held in position by the fixed vertical bed. Normally, such presses

are equipped with a roller inking arrangement, but the group also includes

non-inking platen presses for dry relief printing.”

The aforesaid explanation acknowledges that this simplest form of printing

presses consists of a fixed slab (or bed) to hold the forme, cliché or

plate to be reproduced. The ingredient of a plate from which there can be

reproduction is, thus, recognised as a process of printing. It would also

be pertinent to mention that these very HSN Explanatory Notes clarify that

apart from the normal types of printing machines, there are special

printing machines which are also covered by this heading. Examples of 7

such machines are specifically given. For the purpose of this case,

printing machine described at serial No.7 would be pertinent. Therefore,

we reproduce the said description hereunder:

“(vii) Certain small office printing machines which operate by means of

printing type or by the offset process, and which are impropery referred to

as “duplicating machines” because their operating principles and papearance

are similar to those of duplicating machines.

This group also includes colour printing machines, used to

colour, after they have been first printed in black and white, special art

editions, playing cards, children's illustrations, etc., by means of

stencils or stencil-plates, the colour being applied by brushes, rollers or

by spraying.”

What is significant is the recognition of the fact that there are many

special machines (obviously due to advancement of technology) which are

small office printing machines and they operate by means of printing type

or by the offset process. It is also acknowledged that many times these

machines are confused with duplicating machines and improperly referred to

as such, primarily because of their appearance as duplicating machines and

similar operating principles. Nevertheless, as per this Note these are not

to be treated as duplicating machines, but printing machines. Underneath

the aforesaid special printing machines it is further mentioned that there

may be machines for printing a repetitive design, repetitive words, etc.

which would still qualify to be printing machines. Example of four such

machines are given in this inclusive description and screen printing

machines are specifically included therein. The aforesaid aspects are

demonstrated in the following specific words:

“Machines for printing a repetitive design, repetitive words or overall

colour on textiles, wallpaper, wrapping paper, linoleum, leather, etc.,

include:

(1) Block printing machines in which blocks engraved with the design,

generally in relief, are repeatedly pressed on the cloth, wallpaper, etc.,

as it passes through the machine, thus producing a continuous design; the

same machines are also used for printing separate designs (e.g. on scarves

or handkerchiefs).

(2) Roller printing machines, usually consisting of a large central

cylinder (pressure bowl) around the periphery of which is placed a series

of engraved colour rollers, each with its colour trough, furnisher roller,

doctor blades, etc.

(3) Screen printing machines. The material to be printed passes through

the machine together with a stencil-screen band, the colour being applied

through the stencil.

(4) Yarn printing machines. These produce colour effects on the yarn (or

sometimes on the roving before it is spun into yarn).”

Thus, a fine distinction between the printing machine on the one hand and

duplicating machine on the other has to be borne in mind with specific

understanding that in many cases there may be confusion between duplicating

machine and specific form of printing machine, namely, screen printing

machine. We may point out at this juncture that the endeavour of the

appellant is to establish that Risograph machine is nothing but Screen

Printing Machine.

After taking note of the basic features which distinguish printing from

duplicating, let us understand the process adopted in Risograph machine.

Risograph machine consists of an automatic digital scanner, a thermal head

and a printing station. The prints of tex/images which can be taken from

these Risographs can be suitably enlarged or reduced as per the user. The

scanner portion of the Risograph consists of a photo sensor comprising of

light emitting diodes and photo detectors. The light emitted from these

diodes strike the original. The light falling on the dark areas of the

original are absorbed. The photo detector then detects the reflected light

and reads the white and black area of the original as read by image

scanner. The image thus formed by the scanner is a digital image and not

an optical image or continuous image. From the scanner, image signals are

transferred to thermal head. The thermal head is used to make master

necessary for printing, based on the signals received from the image

scanner. The thermal head carrying the signal received from the scanner

touches the plastic film portion of the master. Since the film is heat

sensitive, the plastic film melts while the base paper remains unaffected,

thus, forming the image of the original documents on the base paper. This

constitutes the master used for subsequent printing. The master material

consists of film based on polyester plastic material boded with long fibre

Japanese type paper (through which ink can penetrate). The master film is

a few microns in thickness and is, thus, thin. The polyester based

material is bonded to the long fibre Japanese type paper by co-

polymerization. The plastic film used is heat sensitive. The paper is

basically cellulose web through which ink can penetrate. The master

material is in the form of a roll of paper. The paper is drawn from the

roll and thermal head prepares the master. The prepared head is cut from

the master and wound on the drum. The surface of the drum is a fine mesh

of steel wire so as to allow ink to pass through the drum as well as the

master while printing. A squeegee roller is fitted against the drum. Ink

gets filled between the squeegee roller and steel mesh of the drum. During

printing the squeegee roller rotates thereby forcing the ink to pass

through first, the drum surface, then to the master and then on to the

paper to be printed.

From the aforesaid description of the process adopted in Risograph machine,

it becomes apparent that Risograph printing process is more akin to screen

printing. As already pointed out above, the screen printing process

requires a stencil and a screen, with the stencil carrying the design to be

printed. This stencil is mounted against the screen. The printing itself

takes place when the ink is squeegeed through the stencil onto the screen

and ultimately onto the paper. It is the screen which holds the image

area, which can carry either a pictorial or typographic material.

Similarly, in the case of a Risograph, the long fibre Japanese type paper

is the master through which the ink is pressed to reproduce the image or

text. The screen printing stencil prepared is equivalent to the plastic

film coating on the cellulose fibre of Risograph master. Thus, the

principles adopted for printing in the Risograph is akin to that found in

screen printing.

At this stage, let us embark on a brief journey of printing from Gutenberg

to date to see how it has evolved over a period of time leading to screen

printing which is one of the most sophisticated form of printing.

Printing, today, has become one of the most important means of mass

communication though with the advent of computers and e-form of

communication, in recent years its importance is somewhat dented. Fact

remains that even today it remains an important means of mass communication

along with Radio, Television and Films. In or around the year 1440,

Johannes Gutenberg invented and developed the printing press. It was

'printing with movable type'. Gutenberg made separate pieces of metal type

for each character to be printed. With movable type, a printer could

quickly make many identical copies of a book. Using this process, the same

pieces of type could be used over and over again – to print many different

books. Over a period of time, there has been improvement in the

methodology of printing with the advancement of technology.

However, there are certain steps which are common to all printing

processes. These steps include: (i) typesetting, (ii) proofing, (iii)

preparing illustrations for reproduction, and (iv) page makeup. Typesetting

is the process of putting into type the words to be printed. It is also

called composition. Typesetting can be classified as (1) hot-metal

typesetting or (2) photocomposition. Hot-metal type printing is now done

mostly by machine, which was earlier done by hand. There are two main kind

of machines that set metal type – the line caster and the Monotype.

Photocomposition (which is also called phototypesetting) on the other hand

includes all type setting methods that do not set metal type.

Phototypesetting machines produce images of type characters on

photosensitive film or paper. It is this method which is now widely used

and has replaced hot-metal composition for most printing. Most commercial

printing today is done by one of the three processes: (1) relief printing,

(2) offset lithography, or (3) gravure printing. Each of these processes

uses a different kind of image carrier (the printing surface that carries

the images to be printed). In relief printing, the printing surface is

raised above the level of the non-printing surface. In offset lithography,

the printing surface and the non-printing surface are on the same level.

In gravure printing, the printing surface is below the non-printing

surface.

In addition to the aforesaid three kinds of processes, many other printing

processes have also been developed. Notable among those are: (a) screen

process printing, (b) collotype printing and (c) flexographic printing.

(a) Screen process printing requires a stencil and a fine cloth or wire

screen. The stencil carries the design to be printed. It can be made

simply by cutting the design out of paper. The stencil is mounted against

the screen. Ink is squeezed through the stencil onto the surface to be

printed. The design can also be traced directly on the screen, and the non-

printing parts painted out. Or the screen can be given a light-sensitive

coating and the design put on it photographically. Screen process can be

used to print on paper, glass, cloth, wood, or almost any other material.

It is used to print on objects of almost all sizes and shapes, including

draperies, banners, bottles, toys, and furniture. Most screen process

printing is done on automatic or hand-operated presses. Screen process is

also called silk-screen printing.

It is difficult to equate Risograph machine with duplicating machine.

Duplicating, as opposed to photocopying, requires the preparation of a

master sheet which makes duplicates on a machine. There are two main types

of duplicating: stencil duplicating and spirit or hectographic duplicating.

Stencil duplicating is a technique which uses a master sheet on to which

lettering is impressed as lines of perforations through which ink can be

squeezed on to the copy paper. Spirit duplicating (also known as

hectographic duplicating) is a process/method which uses strong aniline

dye. Originally the ink was transferred to a sheet of gelatin by placing

the sheet of paper with the dye on it in a shallow tray. The moisture

retaining qualities of gelatin kept the ink moist, and the copy was made by

pressing an ordinary sheet of paper on to the gelatin. The modern process,

which has replaced the aforesaid original version, was developed in the

year 1923. In this process, the master is in two parts, the lower one like

a sheet of carbon paper with the dye on the top side; the dye is

transferred to the back of the top sheet when it is typed or written upon.

This sheet is then clipped to a revolving drum, and the sheets to be

printed are moistened with a volatile fluid which dissolves a thin layer of

dye on the master, thus transferring it to the clean paper. In a

duplicating machine, as provided for in the Customs Tariff Act, the stencil

itself is made using a typewriter or stylus i.e. the stencil is created

outside of the machine before the same is fed and ink directly passed

through it. The HSN Explanatory Notes to Customs Tariff Heading 84.72

itself confirms this understanding wherein it is stated that duplicating

machines include the stencil duplicating machines which operate with waxed

paper stencils previously cut by a stylus or on a typewriter.

As pointed out above, the Tribunal has simply relied upon its earlier

decision in Pioneer International. We have gone through the said judgment.

In that case also the assessee had specifically argued that the printing

was the principal function of the Risograph machine. In support, the

assessee had relied upon the dictionary meaning assigned to the 'printing

machines' as well as 'duplicating machines' and it was argued that it was

not a duplicating machine or a photocopier. It was emphasized that

Risograph is a more sophisticated machine with previously unheard print

quality; that the machine uses a method of scanning at 400 DPI resolution

as used in Scanners in Printing Industry; that instead of optical system

(Lens & Mirror) as used in a photocopier, Risograph uses a charged couple

device, as used in the scanners in printing industry; that the method is

digital only; that just like in Offset Printing which uses a lithographic

plate made of aluminium or Zinc coated with photo sensitive material, the

Risograph uses similar materials which are heat sensitive called master;

that a number of masters are required in the Risograph for multicolour

printing; that inversion of image is carried out during scanning and master

making process itself; that all the facilities available in printing are

available in Risograph such as registering errors, adjustment of margin on

four sides of paper, margin for binding and fine tuning of the print. It

was also argued that the process of scanning and master making are

ancillary to printing and are inbuilt in the machines; that simply because

certain processes are separately done in offset printing does not mean that

where these processes are inbuilt the same is precluded from the term

'printing machinery'.

However, the aforesaid arguments were not accepted and

plea of the Department was acceded to with the solitary observation that

the Risograph machine is used only to reproduce copies from the originals

and it does not have any mechanism to print in original matter. This

observation, according to us, is contrary to plethora of material produced,

coupled with the HSN Explanatory Notes, as noticed above, which clinch the

issue in favour of the assessee herein. We are, therefore, of the opinion

that Pioneer International does not lay down the law correctly and over-

rule the said judgment.

The outcome of the aforesaid discussion would be to allow the appeal

holding that the Risograph machine is in the nature of a screen printing

machine and not duplicating machine. It would, therefore, be covered under

sub-heading 84.43 and not 84.72.

We, thus, allow the appeal and set aside the orders of the Tribunal and

authorities below. In the given circumstances, there shall not be any

order as to costs.

.............................................J.

(A.K. SIKRI)

.............................................J.

(ROHINTON FALI NARIMAN)

NEW DELHI;

JULY 21, 2015

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[1] 2000 (122) ELT 430 (Tri.)