Customs, Excise and Gold Tribunal - Delhi
Premier Automobiles Ltd. vs Collector Of Central Excise on 10 September, 1996
Equivalent citations: 1997(89)ELT527(TRI-DEL)
ORDER Lajja Ram, Member (T)
1. In this appeal filed by M/s. Premier Automobiles Ltd. the issue for our consideration is whether the blower consisting of electric motor impeller and fan for the car air conditioning is an electric fan classifiable under Item No. 33 of the old Central Excise Tariff. It is seen that there was a dispute between the department and the assessee whether such blowers were classifiable under Item No. 33 and the assessee had paid Central Excise duty under protest. The matter was decided in their favour and they got the refund of Central Excise duty paid under protest. The order of the Assistant Collector was reviewed and an appeal was filed before the Collector, Central Excise (Appeals), Bombay and he held that the goods in question were classifiable under Item No. 33(3) of the Tariff and the refund granted was recoverable. It is against this order of the Collector, Central Excise (Appeals), Bombay that M/s. Premier Automobiles Ltd. have filed the appeal. The matter was heard on 10-9-1996 and Shri M.S. Sanklecha and Ms. R. Millwala, advocates appeared for the appellants. Shri P.K. Jain, SDR represented the Respondent/Revenue.
2. Shri M.S. Sanklecha, advocate stated that the blower for their air conditioner is not commercially known as electric fan; it had no independent existence and was designed to work only with the air conditioner. He referred to the observations of the Assistant Collector who had adjudicated the matter that at no stage the said blower had assumed the form of an electric fan in an identifiable manner. Referring to the order passed by the Collector, Central Excise (Appeals) he submitted that while he had admitted that the contentions of the appellants had a validity he had gone only by the functioning of the blower and not by its commercial understanding. In fact he has recorded that the goods in question may not be commercially sold as a fan. Learned advocate referred to a decision of Bombay High Court in the case of Voltas Ltd. v. UOI -1988 (36) E.L.T. 15 Bombay and the Tribunal's decisions in the cases of CCE v. Air Conditioning Corporation reported in 1993 (66) E.L.T. 384 (Tribunal) and Stormac India Ltd. v. CCE - 1989 (40) E.L.T. 343 (Tribunal). He also referred to the Board's tariff advice as circulated by the Bombay Collectorate Trade Notice No. 109 (MP) Electric Fans (3)/75, dated 10-6-1975 wherein it had been stated that in the case of blowers used in domestic air conditioners and coolers it cannot be said that they are designed for use in an industrial system (as in the case of blower used in mines silos and ships or wind tunnels, etc.) In reply Shri P.K. Jain, SDR stated that the matter in the cases relied upon by the appellants related to room air conditioners and in the present case the blower for car air conditioning is under consideration. The blower can function independently and can be switched on and off without air conditioner. Such a blower, it was his contention, comes into existence independently and functions separately. Learned SDR submitted that such a blower could be covered by the definition of electric fan under Item No. 33(3) of the Tariff.
3. We have carefully considered the matter. The appellants have described their blower as a combination of electric motor with impeller through V-Belt. This combination which had been referred to as blower is part of the air conditioning unit and had been specifically manufactured for the air conditioning unit. There is nothing on record to show that they are marketed as electric fans under Item No. 33 under which Electric fans including regulators for electric fans are excisable. Under sub-item (3) of Item No. 33 electric fans not otherwise specified and regulators therefore are dutiable. It is now a settled position that for classifying various goods for the purpose of excise levy it is the commercial understanding which is relevant. Each and every device which circulates the air may not be the electric fans as commercially understood or understood in common parlance, for classification as electric fan under Central Excise Tariff.
4. The Assistant Collector in his order had described the goods as consisting of electric motor impeller and fan belts. He had recorded that before their use in the assembly of the air conditioners it had not assumed the shape of such fans in an identifiable manner. He had referred to the tariff clarification in which it had been clarified that as per the Tariff description (as revised by 1971 Budget) the blowers used in domestic air conditioners and evaporative coolers it could not be said that they were designed for use in an industrial system). It had been further clarified that such a blower could be classified under Item No. 33(3) if before their use in the domestic air conditioners or coolers they had assumed the shape of such fans in an identifiable manner. It was added that a decision in this regard could depend on the facts of each case. Although the tariff advice relates to domestic air conditioner the situation for car air conditioner may not be different. Collector of Central Excise (Appeals) had noted the contention of the assessee that their blowers could not be classified under Item No. 33(3) as it had not assumed the shape of fan in an identifiable manner. He has noted as under "this view no doubt has validity but if one considers the fact that the blower is a combination of electric motor, impellers and blades. It is capable of giving of air. It may not be commercially sold as a fan but it performs as a fan. No doubt it is a part of an air conditioner but the fact remains that it gives of air." Everything which gives air may not be an electric fan for the purposes of Item No. 33. The Collector, Central Excise (Appeals) had not discussed the commercial understanding or how this type of blower is known in common parlance. It appears that he had decided the matter only on the ground that it blows air and had a separate button or switch to operate. In our view only on this ground the goods under consideration could not be classified under Item No. 33 of the Tariff.
5. The appellants have relied upon the Bombay High Court decision in the case of Voltas Ltd. v. UOI-1988 (36) E.L.T. 15 (Bombay) wherein it had been held that assembly of motor and propeller used in the manufacture of air conditioners were not treatable as electric fan and that they were not capable of independent existence. The Tribunal in the case of CCE v. Air Conditioning Corporation reported in 1993 (66) E.L.T. 364 (Tribunal) had also held that the electric blower or fan come into existence in an identifiable form only inside an air conditioner and that no duty was chargeable on such blowers under Item No. 33(3) of the Tariff. This decision has been followed by the Tribunal in the case of Stormac India Ltd. v. CCE -1989 (40) E.L.T. 343 (Tribunal) wherein it had been held that the circulation device inside the drier chamber was not liable to duty as industrial fan, under Item 33(2) of the Central Excise Tariff.
6. The learned SDR had submitted that these decisions referred to room air conditioners and the ratio may not be applicable to the car air conditioner. In these proceedings we are concerned with the tariff entry under Item No. 33 of the old Tariff wherein the expression used is electric fans. The electric fan as commercially understood may not cover such a mechanism even if it circulates the air. The learned Advocate had also referred that the tariff entry was culled out even before the car air conditioner became a fact in this country. Although any tariff entry had to be given a complete meaning and if the products which were not in existence when tariff entry was made are otherwise covered they will be dutiable, keeping in view the facts in this case (sic). We agree with the observations of the Assistant Collector that the blower in question was not an electric fan for the purpose of Item No. 33 of the Tariff.
7. Taking all the relevant considerations into account we set aside the order-in-appeal and allow the appeal of M/s. Premier Automobiles Ltd. Ordered accordingly.