By TIOL News Service

CHENNAI, FEB 18, 2014: THE issue involved is classification of the articles manufactured by the appellant assessee, Funskool (India) Ltd. While revenue classified them under 9504.90 as games, the assessee claimed classification under 9503.00. The classification claimed by the assessee attracts Nil rate of duty while the classification by revenue attracts 16% duty. The appeals are taken up by the Tribunal consequent to the directions of the Supreme Court to decide the classification of the goods manufactured based on the tests laid down in the earlier order of the Supreme Court in 2009-TIOL-118-SC-CX .

The dispute involved classification of 26 items like Beeline, Disney Telespin, Disney Sorry, Disney Chip N Dale, Game of Games, Duck Tales, Monopoly Junior etc. It is contended by the revenue that by applying the following four principles laid down by the Supreme Court, all the items in question are to be treated as games and classifiable under Heading 9504.

(a) Outcome is pre-determined in a puzzle but not in a game

(b) There will be clues in a puzzle and not in a game

(c) Luck lacks in a puzzle, unlike in a game

(d) Element of chance and skill is absent in a toy

The assessee contended that the Department erroneously proceeded on the basis that the assessee had accepted "Snake and Ladder" as well as "Monopoly" are not toys and therefore other items would be accepted as games. It is well settled that a concession does not give rise to any precedent. All the items in question classified under ITC Heading 9503 30 10 which covers "educational games" and functional/technical toys/models/kits under free import category. It is contended that ITC Import Policy has followed the HSN Explanatory Notes. They submitted a "Written Submission" with a Chart showing details of nature of each items and also demonstrated all the items before the Bench during the course of hearing.

After examining the submissions by both sides, the tribunal recorded findings against each of the items whether the item has be classified as game under 9504.90 or as Toy under 9503.00. The Member (J) classified the following 12 items under 9503 and rest of them under 9504.

1. City Games (Paris)

2. City Games (London)

3. City Games (USA)

4. City Games (India)

5. Match & Move Memory

6. Chip N Dale

7. Duck Tale Disney

8. Fox & Geese

9. Rally

10. Games of Games

11. Go To The Head of the Class

12. Mould & Paint

The Member (T) though recorded separate findings, agreed with the classification of the goods as held by the Member (J) except in respect of the following four items:

1 Chip N Dale

2 Duck Tale Disney

3 Fox and Geese

4 Rally

The Member (T) after going through the product literature and how the game is played, held that these have no educational value and are in the nature of Monopoly / Snake and ladder / Draughts or Chess and do not satisfy the criteria laid down by the Apex Court for toys. Accordingly, the said four items are classifiable under Heading 9504.90.

In view of the difference of opinion in respect of the above four items, the matter has been referred to Third Member to resolve the issue.

(See 2014-TIOL-253-CESTAT-MAD)