24
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
For approval and signature:
Hon’ble Shri P.K. Das, Judicial Member
Hon’ble Shri Mathew John, Technical Member
1. Whether Press Reporters may be allowed to see the Order for Publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether the Members wish to see the fair copy of the Order?
4. Whether order is to be circulated to the Departmental authorities?
Appeal No. E/620/2002 & E/302/2003
(Arising out of Order-in-Original No. 14/Commr. Goa/CX/2002 dated 27.9.2002 passed by the Commissioner of Customs, Mumbai)
1. M/s. Funskool (India) Ltd.
2. S.K. Padhi Appellants
Vs.
Commissioner of Central Excise, Panaji, Goa Respondent
Appeal No. E/722/2003
(Arising out of Order-in-Appeal No. KKS (19) 19/GOA/2002 dated 17.7.2002 passed by the passed by the Commissioner of Customs and Central Excise (Appeals), Panaji, Goa)
Commissioner of Central Excise, Panaji, Goa Appellant
Vs.
M/s. Funskool (India) Ltd. Respondent
Appearance for the Assessee
Shri Arvind P. Datar, Senior Advocate
Shri Thirumal Rao, Advocate,
Appearance for the Department
Shri K.S.V.V. Prasad, JC (AR) and
Shri M. Rammohan Rao, DC (AR)
CORAM
Hon’ble Shri P.K. Das, Judicial Member
Hon’ble Shri Mathew John, Technical Member
Date of Hearing : 19/23.09.2013
Date of Pronouncement: 10.2.2014
Interim Order No. 32 to 34/2014
Per P.K. Das
These appeals are taken up for hearing as per the judgment/order dated 25.1.2010 of the Hon’ble Supreme Court of India in I.A. Nos. 8 to 10/2009 in Civil Appeal Nos. 3460 to 3462/2004 [Commissioner of Central Excise, Goa & Anr. Vs. M/s. Funskool (India) Ltd. & Anr.] whereby the Hon’ble Court directed the Tribunal to examine the case as to whether each of the 31 items manufactured by the Assessee would stand covered by CSH 9504.90 as games as contended by the Revenue or by CSH 9503.00 as toy/puzzle as claimed by the Assesses. The Hon’ble Court directed that if the decision of the Tribunal on merit stands against the Assessee, the demand of duty would be restricted for normal period of limitation. For that purpose, the Tribunal was directed to apply the tests which have been enunciated by the Hon’ble Supreme Court in the judgment in the case of M/s. Pleasantime Products Vs. Commissioner of Central Excise, Mumbai–I reported in 2009 (243) ELT 641 (SC).
2. The relevant facts of the case, in brief, as revealed from the records are that since 1986 the Assessees are engaged in the manufacture of Toys and Games falling under Chapter 95 of the CETA, 1985. They were filing the classification list upto 1995 and thereafter classification Declaration under Rule 173B of the erstwhile Central Excise Rules, 1944 in respect of the Toys and Games and classification lists were duly approved and the Declarations were acknowledged by the Department. The present proceedings were initiated after filing of classification declaration No. 1/2000-2001 dated 1.4.2000. The Assessee by their letter dated 19.8.2000 furnished the Department detailed product literature-cum-instruction sheets, how to play the games. On 17.11.2000, the Central Excise officers visited the Assessee’s factory and after scrutiny of the products, it appears that some of the items could be classified under Sub-Heading No.9504.90 of CETA, 1985 @ 16% ad valorem instead of 9503.00 nil rate of duty as claimed by the Assessee.
2.1 A show-cause notice dated 1.5.2001 was issued by the Range Superintendent of Central Excise, Panaji, Goa, proposing to classify 1 - 21 items under sub-heading No. 9504.90 and the item No. 22 namely Mould & Paints under sub-heading 8480.10 chargeable to 16% ad valorem and to amend the classification/declaration No. 1/2000 dated 1.4.2000. It has also proposed demand of duty of Rs.9,04,444.37 along with interest and penalty for the period 1.4.2000 to 31.12.2000. It has been alleged that the item at Serial No. 1 to 21 appears to be classifiable under S.H. No. 9504.90, as the items are similar in the nature to the Board games of Ludo / Snakes & Ladder / Chess / Draughts. The item Serial No. 22 is mould / plastic mould used for making different figures of fruit, vegetables etc. Explanatory Notes to Chapter 84 of HSN mentioned that moulds for mineral (Plaster of Paris) classifiable under SH 8480.10. The name of the items are as under:-
1. Beeline
2. Disney Telespin
3. Disney Sorry
4. Disney Chip N Dale
5. Game of Games
6. Duck Tales
7. Monopoly Junior
8. Pay Day
9. Hotel
10. City Games (Paris)
11. City Games (London)
12. Games of States (USA)
13. Games of States (India)
14. Travel Ludo
15. Travel Snakes & Ladders
16. Travel Chinese Checkers
17. Dragster
18. Stratego
19. Fox & Geese
20. Travel Chess & Draughts
21. Leverage
22. Mould and Paint
2.2 By Order-in-Original dated 28.9.2001, the Assistant Commissioner of Central Excise, Panaji, Goa Division, confirmed the demand of duty of Rs.9,04,444.37 along with interest and imposed a penalty of Rs.90,000/- under Rule 173Q r/w Rule 9(2) for contravening Rule 9(1), 173F, 173G and penalty of Rs.1,000/- for contravention of Rule 210 of the erstwhile Central Excise Rules, 1944. He has also confirmed the classification of 1 to 21 items under sub-heading 9504.90 and other item Serial No. 22 under sub-heading 8480.10 of CETA, 1985 as proposed in the Show Cause Notice. The assessee filed appeal before the Commissioner (Appeals) against the said adjudication order.
2.3 Thereafter, another show-cause notice dated 5.11.2001 was issued by the Additional Director General, Director General of Central Excise Intelligence (DGCEI), Zonal Unit, Mumbai proposing demand of duty of Rs.60,77,451.35 along with interest and penalty for the period November 1996 to June 2001. The demand of duty was proposed in respect of 12 items classifying under sub-heading 9504.90 chargeable to 16% ad valorem instead of sub-heading 9503.00 chargeable to nil rate of duty as claimed by the Assessee in their Declaration. It has also proposed to impose penalty on Shri S.K. Padhi, Manager (Factory Accounts) and authorized signatory of the Assessee. It has been alleged that all the items are “Board and Dice Games”. As per HSN, “Board & Dice” games are categorically classifiable under Heading No. 95.04 with specific mention of “Snakes & Ladders”. The names of the items are as under:-
1. Pay Day
2. Games of Games
3. Talespin
4. Match & Move Memory
5. Upwards
6. Pictionary
7. Rally
8. Go to the head of the class
9. Chip N Dale
10. Monopoly
11. Junior Monopoly
12. Snakes & Ladders
2.4 It appears that the Assessee admitted the classification of “Snakes & Ladders” before issue of Show Cause Notice and the item “Monopoly” after issue of Show Cause Notice under sub-heading 9504.90. It was clarified by the Assessee that they were manufacturing more than hundred items of toys and games and wrong classification was escaped from their notice. They paid duty along with interest.
2.5 In the meantime, the Commissioner (Appeals) by Order-in-Appeal dated 17.7.2002, set aside the aforesaid adjudication order dated 28.9.2001 passed by the Assistant Commissioner of Central Excise, holding that all the 22 items listed in the said adjudication order would be classified under sub-heading 9503.00 of the CETA, 1985. Revenue filed Appeal No. E/722/2003 before this Tribunal against the said order passed by the Commissioner (Appeals).
2.6 The Commissioner of Central Excise, Goa by Order-in-Original dated 27.9.2002 confirmed the demand of duty of Rs.60,77,451/- as proposed in the show-cause notice dated 23.11.2001. He has also imposed penalty of equal amount under Section 11AC of the Central Excise Act, 1944 along with interest. He has further imposed penalty of Rs.15,000/- on Shri A.K. Padhi, Manager (Factory Accounts) of the Assessee under Rule 26 of the Central Excise (No. 2) Rules, 2001. The Assessee and Shri S.K. Padhi filed two appeals No. E/620/2002 and E/302/2003 before this Tribunal against the adjudication order passed by the Commissioner of Central Excise, Goa insofar as demand of duty against 10 items out of 12 item except “Snakes & Ladders” and “Monopoly”.
2.7 The Tribunal by Final Order No. 103 to 105/2004 dated 23.1.2004 allowed the appeals filed by the Assessee and Shri S.K. Padhi in respect of 10 items and rejected the Revenue’s appeal in respect of 22 items.
2.8 Revenue filed three appeals (C.A. Nos. 3460 to 3462/2004) before the Hon’ble Supreme Court against the order of the Tribunal. On 12.11.2009, the Hon’ble Supreme Court heard these appeals filed by Revenue along with appeals on similar issue filed by the other assessee in Civil Appeal Nos. 4309 to 4311/2008 (M/s. Pleasantime Products Ltd. Vs. CCE, Mumbai). In the case of Pleasantime Products Ltd, the Hon’ble Supreme Court passed a detailed judgment and dismissed the appeals filed by the assessee as reported in Pleasantime Products Ltd. Vs. CCE, Mumbai – 2009 (243) ELT 641 (SC). In the case of Pleasantime Products (supra), the dispute relates to classification of branded word game “scrabble” under sub-heading 9503.00, puzzle as claimed by the assessee or sub-heading 9504.90 game as held by the Revenue. The Hon’ble Court held that “Scrabble” and “Junior Scrabble” would come under 9504.90.
2.9 Thereafter, the Hon’ble Supreme Court passed judgment dated 12.11.2009 in these appeals and allowed the appeals filed by the Revenue, which reads:-
“1. The batch of civil appeals is filed by the Department against the decision of CESTAT dated 23.1.2004 in Final Order Nos. 103 to 105 of 2004. These are virtually cross appeals to civil appeals filed by the assessee bearing Civil Appeal Nos. 4309-4311 of 2008 – M/s. Pleasantime Products & Anr. V. Commissioner of Central Excise, Mumbai – I, in which we have delivered the judgment today. The question in both sets of civil appeals, however, is common as far as the game “Scrabble/Upwords” is concerned.
2. In this batch of civil appeals filed by the Department we are concerned with classification of 12 items falling within the declaration filed by M/s. Funskool (India) Ltd.
3. We make it clear that the following three items are classifiable under Heading 95.04 of the Central Excise and Tariff Act,1 985 (“CETA”, for short). They are as follows:-
(i) Snake and Ladder
(ii) Monopoly
(iii Scrabble/Upwords (in terms of our judgment delivered today in M/s. Pleasantime Products (supra)
4. In our judgment in M/s. Pleasantime Products (supra),we have broadly indicated the tests to distinguish toys, puzzles and games in the context of Chapter 95 of the CETA. The tests applied by the Department, namely, age of the player, is not correct as indicated in our judgment in M/s. Pleasantime Products (supra). Therefore, we remit this case to the Tribunal for de novo adjudication in accordance with law. It is made clear that the Tribunal will decide the controversy only with regard to nine out of 12 items. We once again declare that “Scrabble/Upwords” is a game falling under Heading95.04 of CETA.
5. Accordingly, civil appeals filed by the Department are allowed with no order as to costs.”
2.10 Revenue filed application before the Hon’ble Supreme Court for incorporating the correct number of items in the above Judgment. By Judgment/Order dated 25.1.2010, the Hon’ble Court was pleased to pass the following order:-
“The appeal filed by the Department in the case of M/s. FIL dealt with 34 items (and not with 12 items as mentioned in our order dated 12.11.2009, which is now recalled). We may state that three out of 34 items dealt with Scrabble/Upwords, Monopoly, Snake & Ladder. Applying our judgment in Pleasantime Products, we hold that the said three items, namely, Snake & Ladder, Monopoly and Scrabble/Upwords stand classifiable under CH 95.04 of the CETA, 1985.
6. Subject to the question of limitation, we have discussed hereinafter, we remit the case to the Tribunal with the request to examine as to whether each of the remaining 31 items would stand covered by CSH 9504.90 or by CSH 9503.00. For that purpose, the Tribunal needs to apply the tests which we have enunciated in our judgment in Pleasantime Products.
7. Now, coming to the question of limitation, we are of the view that, on facts and circumstances of this case, in respect of the first show-cause notice dated 23.11.2001, the claim of the Department has got to be confined to the period after October 2000 and that too, if at all the decision on merits in the matter of classification goes against the assessee. As regards the second show-cause notice dated 1.5.2001, the said notice is within limitation and therefore, the Department would be at liberty to proceed in accordance with law.
8. Before concluding, we may clarify that we have recalled our order dated 12.11.2009 only to bring about clarity in our order. We could have corrected our order easily by incorporating the correct number of items. However, we thought it best to recall the order and to redictate the said order for the sake of clarity.
9. Accordingly, the civil appeals filed by the Department are allowed with no order as to costs.”
3. The learned Authorized Representative on behalf of the Revenue submits that the Revenue filed appeals before the Hon’ble Supreme Court in respect of 34 items. Out of that, the Hon’ble Supreme Court had already decided three items in favour of the Revenue insofar as it stand classified under Chapter 95.04. The Hon’ble Supreme Court directed the Tribunal to decide the present appeals by applying the tests as enunciated by the Hon’ble Court in the case of Pleasantime Products (supra). Thus, the Tribunal has to decide the matter as per the specific direction of the Hon’ble Supreme Court.