Customs, Excise and Gold Tribunal - Delhi
Sayaji Hotels Ltd. vs Commissioner Of Central Excise, Indore on 12 February, 2002
Equivalent citations: 2002(141)ELT765(TRI-DEL)
ORDER S.S. Kang, Member (J)
1. The Appellants filed this appeal against the Adjudication Order passed by the Commissioner, Central Excise who had confirmed the demand of Rs. 42,02,128/- with a penalty of an equal amount and further penalty of Rs. 5 lakhs under Rule 173Q of Central Excise Rules on the ground that Central Air Conditioning Plant is excisable goods classifiable under Chapter 84 of the Central Excise Tariff.
2. Heard Both sides. Contention of the Appellants is that Air Conditioning Plant is not marketable as such. For this they relied upon the decision of the Hon'ble Supreme Court in the case of Triveni Engg., reported in 2000 (120) E.L.T. 273. The Appellants also relied upon the C.B.E.C. Circular dated 15-1-2002 issued under Section 37B of Central Excise Act to submit that Air Conditioning Plant as a whole cannot be considered to be excisable goods.
3. Central Board of Excise & Customs issued a Circular dated 15-1-2002 after considering the various decisions of the Hon'ble Supreme Court including decision relied upon by the Appellants. Relevant para of the Circular is reproduced below :-
(iii) "Refrigeration/Air conditioning plants. These are basically systems comprising of compressors, ducting, pipings, insulators and sometimes cooling lowers etc. They ore in the nature of systems and are not machines as a whole. They come into existence only by assembly and connection of various components and parts. Though each component is dutiable, the refrigeration/air conditioning system as a whole cannot be considered to be excisable goods. Air conditioning units, however, would continue to remain dutiable as per the Central Excise Tariff."
4. In the Circular it is clarified that pending cases be disposed of accordingly. In the present case the duty is demanded on Air Conditioning System, Therefore, in view of the above decision of the Hon'ble Supreme Court and the Board's Circular the demand is not sustainable and set aside.
The appeal is allowed.