2009 (11) TMI 5 - SC - Central Excise

'Scrabble' classified as board game, not puzzle or educational toy, under tariff act. Extended limitation period invoked.

M/s. Pleasantime Products and Anr. Versus Commissioner of Central Excise, Mumbai-I

The court determined that 'Scrabble' is classified as a board game under sub-heading 9504.90 of the Central Excise and Tariff Act, 1985, not as a puzzle ... Scrabble – classification – games – toys – education toys – puzzles - held that – 'Scrabble' is not a puzzle as in 'Scrabble' there is no fixed outcome, there is no clue as in the case of a puzzle and there is an element of skill and chance. - 'educational toys' remain even today tools of amusement - even a 'Junior Scrabble' will not fall in the category of 'educational toys'. As stated earlier, the two main elements of 'Scrabble' are - chance and skill. These elements are absent in a toy. Hence even a 'Junior Scrabble' is not an educational toy. It is a game. It remains a board game and in the context of the placement of the entries in Chapter 95 which we have discussed above, in our view, even 'Junior Scrabble' will come under Chapter Heading 95.04 of the CETA. - They did not mention the details of the game 'Scrabble'. Therefore, this conduct of the assessee clearly indicates that the assessee herein deliberately declared branded goods under sub-heading 9403.00 of the CETA to avoid any enquiry in the matter by the Department – extended period of limitation can be invoked. Issues Involved:1. Classification of the product 'Scrabble' under the Central Excise and Tariff Act, 1985.2. Invocation of the extended period of limitation under Section 11A(1) of the Central Excise Act, 1944.Issue-wise Detailed Analysis:1. Classification of the product 'Scrabble' under the Central Excise and Tariff Act, 1985:The primary issue revolves around whether 'Scrabble' is classifiable under sub-heading 9503.00 as a puzzle or educational toy or under sub-heading 9504.90 as a board game in the First Schedule to the Central Excise and Tariff Act, 1985 (CETA). The assessee argued that 'Scrabble' is a puzzle or an educational toy, thus falling under sub-heading 9503.00, which is exempt from excise duty. The Commissioner and the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that 'Scrabble' is a board game classifiable under sub-heading 9504.90, liable for excise duty.The court analyzed the relevant entries in Chapter 95 of the CETA, which differentiates between toys (sub-headings 9501.00, 9502.00, 9503.00) and articles for funfair, table or parlour games (Heading 95.04). The court applied the 'companion test' and determined that sub-heading 9503.00, which includes 'puzzles of all kinds,' does not encompass 'Scrabble.'The court examined the nature of 'Scrabble,' concluding that it does not fit the definition of a puzzle, as puzzles have a fixed or pre-determined outcome, whereas 'Scrabble' involves elements of chance and skill, and its outcome is not fixed. The court noted that 'Scrabble' is defined as a board game where players use lettered tiles to create words, involving both chance (drawing tiles) and skill (forming high-value words).Additionally, the court considered the trade meaning and common parlance of 'Scrabble,' finding that it is recognized as a board game, not a puzzle. The court referred to the placement of 'Scrabble' in the board game section of stores, supporting its classification under Heading 95.04.The court also addressed the assessee's alternative argument that 'Junior Scrabble' is an educational toy. The court dismissed this argument, stating that 'Junior Scrabble' still involves elements of chance and skill, which are absent in educational toys. Therefore, 'Junior Scrabble' also falls under Heading 95.04.2. Invocation of the extended period of limitation under Section 11A(1) of the Central Excise Act, 1944:The second issue pertains to whether the extended period of limitation under Section 11A(1) of the Central Excise Act, 1944, is applicable. The assessee contended that they had declared the manufacture of toys and puzzles, including those bearing the brand name of M/s. J.W. Spears & Sons Ltd., U.K., and thus did not deliberately suppress any information.The court rejected this contention, noting that the assessee did not specifically mention 'Scrabble' in their declarations and did not provide details about the game. This omission indicated deliberate suppression to avoid departmental inquiry. The court found that the assessee's conduct justified the invocation of the extended period of limitation under the proviso to Section 11A(1) of the 1944 Act.Conclusion:The court concluded that 'Scrabble' is a board game classifiable under sub-heading 9504.90 of the CETA, not a puzzle or educational toy under sub-heading 9503.00. The court also upheld the invocation of the extended period of limitation, finding that the assessee deliberately suppressed information. Consequently, the civil appeals were dismissed with no order as to costs.