M/S. H.C.L. LIMITEDversusCOMMISSIONER OF CUSTOMS, NEW DELHI

                        [2015] 8 S.C.R. 320


A                      M/S. H.C.L. LIMITED
                                 v.
          COMMISSIONER OF CUSTOMS, NEW DELHI
                  (Civil Appeal No. 4513 of2005)

B                         JULY21, 2015
        [A.K. SIKRI AND ROHINTON FALi NARIMAN, JJ.]
        Customs Tariff Act, 1975: Heading 84. 72, 84.43 -
    Risograph machine is in the nature of screen printing
c   machine and not duplicating machine - Classifiable under
    Heading 84.43 and not 84. 72.

        Allowing the appeal, the Court

        HELD: 1. In the present case, the Risograph makes
D   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, The master made by the Risograph
E   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. Su1.:.
    stencil making process for printing is indeed recognised
    in the HSN Explanatory Notes inasmuch as Heading
F   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 stencil cut out on a typewriter for use in a
G   stencil duplicating machine. [Para S(i), 50)] [330-G; 331-
    B-D]
      2. Chapter Heading 84.72, applies to 'Other office
    machines, includes· duplicating machines'. HSN
H                               320
 H.C.L. LIMITED v. COMMINR OF CUSTOMS, NEW DELHI 321


 Explanatory Notes to Chapter Heading 84.72 explains . A
 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 B
 correspondence, documents, forms, records, accounts,
 etc.). 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 C
 photocopying etc. are specifically excluded. Therefore,
 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 D
 duplicating work with stencils or otherwise and even
 photocopying work, it would still be treated as a printing
 machine and not duplicating machine. [Paras 10, 11]
[334-0-F; 335-8-0]
     3. Risograph machine consists of an automatic            E
digital scanner, a thermal head and a printing station.
The prints of text/imag1-1s which can be taken from these
Risographs can be suitably enlarged or reduced as per
the user. The scanner portion of the Risograph consists       F
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     G
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             H
printing, based on .the signals received from the image
322      SUPREME COURT REPORTS               [2015] 8 S.C.R.


A 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
B 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,
C 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
0
  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
E 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
F 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. The
  screen printing process requires a stencil and a screen,
G 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
H carry either a pictorial or typographic material. Similarly,
 H.C.L. LIMITED v. COMMINR OF CUSTOMS, NEW DELHI 323


 in the case of a Risograph, the long fibre Japanese type A
 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 are akin to that B
 found in screen printing. [Paras 18 and 19] [338-H; 339-
 A-H; 340-8-D]

     4. It is difficult to equate Risograph machine with
duplicating machine. Duplicating, as opposed to                C
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                D
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 she~t of gelatin by    E
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          F
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      G
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. ln a
duplicating machine, as provided for in the Customs            H
Tariff Act, the stencil itself is made using a typewriter or
324         SUPREME COURT REPORTS                [2015] 8 S.C.R.


A 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
B duplicating machines which operate with waxed paper
  stencils previously cut by a stylus or on a typewriter.
  [Para 25) [342-0-H; 343-A-B]

     Pioneer International v. Collector of Customs, Kand/a
C 2000(122)ELT430(Tri.) -overruled.

                        Case Law Reference

       2000 (122) ELT 430 (Tri.)    overruled.    Paras 4, 5, 26

D        CIVIL APPELLATE JURISDICTION: Civil Appeal No.
      4513 of2005.

           From the Judgment and Order No. 276 of 2005 dated
      21.03.2005 of the Customs, Excise and Service Tax Appellate
E     Tribunal, Northern Bench, New Delhi in Appeal No. C/277/04-
      NB(C).

           V. Lakshmikumaran, M.P. Devanath, Vivek Sharma, L.
      Charanaya, Aditya Bhattacharya, R. Ramchandran, Hemant
F     Bajaj,Ambarish Pandey,Aman,Abhinav Jaganathan,Anandh
      K. for the Appellant.

         K. Radhakrishnan, Sunita Rani Singh, Rupesh Kumar,
      Rashmi Malhotra, B. Krishna Prasad for the Respondent.
G         The Judgment of the Court was delivered by

          A.K. SIKRI, J. 1. Classification of the machines known
      as Risograph, which are imported by the dppellant M/s. HCL

H
H.C.L. LIMITED v. COMMINR OF CUSTOMS, NEW DELHI 325
                    [A.K. SIKRI, J.]

Limited, is the issue involved in the present appeal. The         A
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      B
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:
                                                                  c
     84.43           Printing machinery; machines for
                     uses ancillary to printing
                     - Offset printing machinery:

     8443.11 -        Reel fed      65%                           D

     8443.12-        Sheet tell. office type (sheet size not
                     exceeding 22 x 36 cm)       65%

     8443.19 -       Other 65%                                    E
                     - Letterpress printing machinery,

     8443.21 -       Reel fed       65%

     8443.29-        Other 65%                                    F ·

     8443.30-        Flexographic printing machinery
                     65%

     8443.40 -       Gravure printing machinery 65%
                                                                  G
     8443.50-        Other printing machinery 65%

     8443.60-        Machines for uses ancillary to printing
                     65%

     8443.90-        Parts 65%                                    H
326         SUPREME COURT REPORTS                    [2015] 8 S.C.R.


A          2) 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,
B                          hectograph or stencil duplicating
                           machines, addressing machines,
                           automatic banknote dispensers, coin-
                           sorting machines, coin-counting or
                           wrapping      machines,      pencil-
c                          sharpening machines, perforating or
                           stapling machines) .

           8472.10-        Duplicating machines           65%

           8472.20-        Addressing machines and address plate
D
                           embossing machines65%

           8472.30-
                                    '
                            Machines for sorting or folding mail or for
                           inserting mail in envelopes or bands,
                           machines for opening, closing or sealing
E                          mail and machines for affixing or
                           cancelling postage stamps 65%

           8472.90-        Other 65%

F      3) As per the appellant-assessee, Risograph machine is
  a printing machine which should be covered by sub-heading
  8443.50, namely, 'other printing machinQry'. On the other
  hand, the respondent-Revenµe has taken the position that it is
  a specie of duplicating machine and falls under the sub-heading
G 8472.90, viz. 'Other'. Though under both the suh-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
H the precise reason behind the present /is between the parties
H.C.L. LIMITED v. COMMINR OF CUSTOMS, NEW DELHI 327
                    [A.K. SIKRI, J.]

     4) From the aforesaid, one thing is clear. Risograph              A
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               B·
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            c
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         D
having duplicating function, has relied upon its earlier judgment
in -the case of Pioneer International v. Collector of
Customs, Kandla1• 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          E
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 thatthe correctness of the order          f
of the Tribunal in Pioneer International was not tested in this
Court.

      5) Questioning the wisdom of the authorities below with
the contention that they have arrived at incorrect conclusion in .G
this behalf, it was argued by the learned counsel for th~
appellant that a detailed reply dated February 01, 1995 was
filed to the show-cause notice dated January 13, 1995 issued

1 2000 (122) ELT 430 (Tri.)                                            H
328         SUPREME COURT REPORTS                    [2015] 8 S.C.R.


 A    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 arid
 B    also the assessment by the Japanese Customs specifically
      classifying the machine under sub-heading 8443.50. The
      appellant categoricaUy brought to the notice of the Assistant
      Commissioner the following facts for the purpose of
      classification:
·c
          (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;

o          (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;

E           (c) the mere fact that Risograph starts with an original
      cannot be a 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;

F      (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
G 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;
H
          (e) even if principles of duplication are involved, Chapter
H.C.L. LIMITED v. COMMINR OF CUSTOMS, NEW DELHI 329
                    [AK. SIKRI, J.]

Heading 84.72 would not be attracted because the HSN A
Explanatory Notes clearly provide that the said heading
specifically excludes small printing machines even if intended
for office use; and
    (f) Risograph machine funqflons in the principles of printing B
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 c
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 thatthe aforesaid
aspects are totally ignored by the authorities below and insofar
as the Tribunal is concerned, it has conveniently omitted to D
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 E
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 F
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.                       G
     (c) The scanner has been extensively used in the printing
industry to 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.
                                                                 H
330         SUPREME COURT REPORTS                    [2015] 8 S.C.R.


A          (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
B 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
C     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,
0
      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
E     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.
F 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
G 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
H International, that is 'offset printing is a process in which the
  inked impression is made on to the paper'. In the case of the
  H.C.L. LIMITED v. COMMINR OF CUSTOMS, NEW DELHI 331
                      [A.K. SIKRl,"J.]

 Risograph machine, ink goes through the pores of the long             A
 fibred paper used in the paper plastic master to make the
 prints.

        0) The master made by the Risograph is not like the stencil
 which is a simple process in stencil duplicating machine, but B
 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 C
 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.
                                                                       D
        6) 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                  E
· lntemationalforthe rea~ons 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            F
  submitted that the Risograph works by the process of
  automatic c:Ugital 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      G
  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    H
332       SUPREME COURT REPORTS                  [2015] 8 S.C.R.


A 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
B 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
C 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
0
  printing machine.

       7) 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
E 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
F also came to conclusion that Risograph is more appropriately
  classifiable under sub-heading 8472.10.

       8) 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
G 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
H printing machine, but it was only a high quality photocopy
  machine with following features:
H.C.L. LIMITED v. COMMINR OF CUSTOMS, NEW DELHI 333
                    [A.K. SIKRI, J.]

    A. The following three systems function in tandem to            A
produce 130 copies or so per minute:

     (a) Master making system        :High-speed      Digitai
                                     Scanning and Thermal
                                     Screening system               B

     (b) Printing system             Automatic        Stencil
                                     Duplicating System

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

    Thus; the specification itself establishes that the printing
system inside the Risograph is an Automatic Stencil
Duplicating System.
                                                                    D
     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           E
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 F
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 G
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.

    9) We have given our due consideration to the aforesaid         H
334       SUPREME COURT REPORTS                    [2015] 8 S.C.R.


A 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
B 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.
C For better understanding of the matter and to answer the
  question appropriately, we may first scan through certain
  statutory and other relevant provisions.

          10) As already noted above, Chapter Heading 84.72,
D 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.,
E. · for doing 'office work' (i.e. work concerning the writing,
     recording, sorting, filing, etc., of correspondence, documents,
     forms, records, accounts, etc.). lt, thereafter, gives the
     description of duplicating machines, which is included in the
F 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
G       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
H      ·for office us, and duplicators using embossed plastic or
 H.C.L. LIMITED v. COMMINR OF CUSTOMS, NEW DE~HI 335
                     [A.K. SIKRI, J.]

     metal sheets (including such machines which can also A
     operate with stencils) (heading 84.43), and photocopying
     or thermocopying apparatus and microfilm apparatus
     (Chapter 90)."

       11) The HSN Explanatory Notes makes itamplyclearthat B
  small printing machines, even if intended for office use and
  even duplicators using embossed plastic o"r 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 C
  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.
                                                                  D
       12) 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 E
·following:

     "(a) Office hectograph or stencil duplicating machines,
     addressing machines and other office machines of
     headings 84.69 to 84.72.                                          F

     (b) Photocopying orthermocopying apparatus (e.g. forthe
     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 G
includes t~e following:

     "(1) Machines for printing a repetitive design, repetitive
     wordings or overall colour on textiles, wallpaper, wrapping
     paper, rubber, plastics sheeting, linoleum, leather, etc.   -H
336         SUPREME COURT REPORTS                      [2015] 8 S.C.R.


A         (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."

B          13) 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:
c
          "(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,
          cliche or plate to be reproduced, and a movable plate
D         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.

E         (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
F         presses are equipped with a roller inking arrangement,
          but the group also includes non-inking platen presses
          for dry relief printing."

        14) The aforesaid explanation acknowledges that this
G simplest form of printing presses consists of a fixed slab (or
  bed) to hold the forme, cliche 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
H clarify that apart from the normal types of printing machines,
. H.C.L. LIMITED v. COMMINR OF CUSTOMS, NEW DELHI 337
                      [A.K. SIKRI, J.]

there are special printing machines which are also covered A
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:
                                                                 B
     "(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.                   c
    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,    D
    the colour being applied by brushes, rollers or by spraying."

      15) .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 E
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 F
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 G
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:
                                                                    H
    "Machines for printing a repetitive design, repetitive words
338          SUPREME COURT REPORTS                     (2015] 8 S.C.R..


A          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
B          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).

c         (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
D
          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
E         is spun into yarn)."

           16) 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
F     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.
G
            17) After taking note of the basic features which distinguish
      printing from duplicating, let us understand the process adopted
      in Risograph machine.

H         18) Risograph machine consists of an automatic digital
 H.C.L. LIMITED v, COMMINR OF CUSTOMS, NEW DELHI 339
                     [A.K. SIKRI, J.]

 scanner, a thermal head and a printing station. The prints of          A
 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        B
 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       C
 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          D
 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 bas.e paper.
 This constitutes the master used for subsequent printing. The
 master material consists of film based on polyester plastic            E
 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           F
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 th.e drum. The surface of the drum is a fine mesh of           G
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 ofthe drum. During printing the squeegee roller rotates
thereby forcing the ink to pass through first, the drum surface,        H
340          SUPREME COURT REPORTS                   . [2015]8S.C.R.


A     then to the master and then on to the paper to be printed.

       19) From the aforesaid description of the process
  adopted in Risograph machine, it becomes apparent that
  Risograph printing process is more akin to screen printing.
B 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
C 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
D 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 p'rinting.

E          20) 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.

F      21) 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
G 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 r.haracter to be printed.
  With movable type, a printer could quickly make many identical
H copies of a book. Using this process, the same pieces of
 H.C.L. LIMITED v. COMMINR OF CUSTOMS, NEW DELHI 341
                     [A.K. SIKRI, J.]

type could be used over and over again -to print many different A
books. Over a period of time, there has been improvement in
the methodology of printing with the advancement of technology.

      22) However, there are certain steps which are common
to all printing processes. These steps include: (i) typesetting, B
(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 C
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.
                                 .
     23) Photocomposition (which is also called D
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 E
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 F
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.
                                                                  G
     24) 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.
                                                                  H
    (a) Screen process printing requires a stencil and a f1ne
342       SUPREME COURT REPORTS                    (2015] 8 S.C.R.


A 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
B 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 dtaperies, banners,
C bottles, toys, and furniture. Most screen process printing is
  done on automatic or hand-operated presses. Screen process
  is also called silk-screen printing.

       25) It is difficult to equate Risograph machine with
D 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
E 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.
F 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
G 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,
H and the sheets to be printed are moistened with a volatile fluid
 H.C.L. LIMITED v. COMMINR OF CUSTOMS, NEW DELHI 343
                     [A.K. SIKRI, J.)

which dissolves a thin layer of dye on the master, thus A
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 stl:lncil is created outside of
the machine before the same is fed and ink directly passed
through it. The HSN Explanatory Notes to Customs Tariff B
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.
                                                                        c
       26) 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           D
  had relied upon the dictionaiy 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        E
  method of scanning at400 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;          F
  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                 G
  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          H
344          SUPREME COURT REPORTS                   [2015] 8 S.C.R.


A     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 offst3t
      printing does not mean that where these processes are inbuilt
      the same is precluded from the term 'printing machinery'.
B
       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 copie~ from the originals and it does not have any
C 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
D not lay down the law correctly and over-rule the said judgment.

          27) 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
E     machine. It would, therefore, be covered under sub-heading
      84.43 and not 84. 72.

       28) We, thus, allow the appeal and set aside the orders of
  the Tribunal and authorities below. In the given circumstances,
F there shall not be any order as to costs.

      Devika Gujral                                      Appeal allowed.