TaxTMI 
TaxTMI 
2013 (12) TMI 1290
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....llant, M/s. Reliance Media Works Ltd., (formerly known as Adlabs Films Ltd.) are engaged in processing of Cinematographic Films, classifiable under heading 3706 of the Central Excise Tariff. For the purpose of processing of cinematographic film, the appellant makes various chemical preparations known as colour developer, stop bath, bleach, fixer, stabilizer, etc. by mixing different chemicals in pre-determined quantities. During the processing, the film passes through various baths/chambers/stages consisting of these chemical preparations. The Revenue was of the view that the chemical preparations made during the processing of the films are classifiable as "chemical preparations for photographic uses" under CETH 3707 of the Central Excise Tariff. Accordingly, notices were issued demanding excise duty on these chemical preparations. Further during the processing of the film, silver residues are also obtained and the Revenue was of the view that the said silver residues are classifiable under Chapter 26 of the Central Excise Tariff and excise duty is payable thereon. The period involved and the demands of duty are as given below: S.No. Order No. & Date Period Duty demand ....
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....e findings in order-in-original NO. 5/2000 dated 26/06/2000. The adjudicating authority shall apply his mind independently on the submissions made by the appellants as regards the marketability of the products and give a detailed and speaking order on the issue. 19. Accordingly, all the appeals are allowed by way of remand to the adjudicating authority. The adjudicating authority will reconsider the issue after granting an opportunity of personal hearing to the appellants. The Counsel undertakes to appear before the adjudicating authority as and when called for personal hearing. All the appeals are allowed by way of remand to the adjudicating authority." 4. The above order of the Tribunal was challenged by the Revenue before the Hon'ble High Court of Bombay and the Hon'ble High Court dismissed the appeal filed by the Revenue vide order dated 24/06/2009 read with order dated 12/11/2009. It is in pursuance of the Tribunal's order dated 11/07/2008, the impugned orders have been passed, wherein the duty demands have been once again confirmed holding that the chemical preparations are classifiable under CETH 3707 and the silver residue under Chapter 26 of the Central ....
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....ms. We do no market any pre-packed chemistry for the motor picture labs in India. This chemistry is different from that used in the mini labs which process still film. These chemistries cannot be interchanged. To our knowledge no company markets pre-packed chemistry for motion picture labs, the reason for this that the broad specifications of the chemistry are laid down by Kodak, labs tend to use these specifications as a guideline to process films. Most labs however may use a variation of this chemistry either to fine tune their process to the kinds of films that they develop, or to increase their efficiencies and in some cases cater to the creative needs of their customers. In some cases the same lab may change it's chemistry from day to day, based on the specific client needs. To the best of our knowledge most lab mix these chemicals just prior to using these chemicals. This is because some of the mixed chemicals are prone to oxidation and other chemical reactions which could make them less effective. Moreover, the storage conditions and the equipment in a tropical country like ours are very different from those recommended, hence ....
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....tions cannot be made by treating the same as manufacturing activity. 6. Three departmental representatives including the Commissioner (AR) made submissions on behalf of the Revenue. 6.1 As regards the marketability, it is the Revenue's contention that as per the information available on the internet, chemical developers are marketed under various trade names, such as, CD-2, CD-3 and CD-4. Similarly, M/s. Kodak India Ltd. themselves are marketing Kodak Kit chemicals for colour motion picture processing and therefore, the impugned goods which are similar to those available in the market can be considered as "marketable". 6.2 The Ld.Commissioner (AR) appearing for the Revenue submits that the Hon'ble High Court while passing the order dated 24/06/2009 had committed an error stating that the impugned order (i.e. Tribunal's order) is set aside. This mistake was corrected vide order dated 12/11/2009 wherein the phrase "the impugned order is set aside" was substituted by words "Appeal is disposed off". The order dated 27/08/2009 was passed during the interregnum i.e. between the orders dated 24/06/2009 and 12/11/2009 passed by the Hon'ble High Court of Bombay. Therefore, the adju....
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....nsider the directions of this Tribunal and of the Hon'ble High Court. 7.3 Further, we find that Revenue has not led any iota of evidence which shows that the various chemical preparations made by the appellant while processing of the cinematographic films are marketable or are marketed. There is no dispute about the fact that the appellants have not, at any point of time, marketed these goods. Further, there are a series of decisions passed by this tribunal affirmed by the Hon'ble Apex Court in the case of Prasad Film Laboratories, Famous Cine Laboratories and Navrang Cine Center (P) Ltd. (cited supra) wherein this Tribunal while considering an identical matter has givben a categorical finding that the chemical preparations used in the processing of cinematographic films are not goods known to the market and hence are not exigible to duty. Further, the expert's opinion adduced by the appellant from M/s.Kodak India Ltd. also clearly shows that these preparations are mixed prior to their usage and such mixed chemical preparations are prone to oxidation and other chemical reactions which could make them less effective and such chemicals are not marketed. The department has not test....