Customs, Excise and Gold Tribunal - Mumbai
H.V. Industrial Electronics Ltd. vs Commr. Of C. Ex., And Cus. on 4 September, 2000
Equivalent citations: 2001(130)ELT576(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. The common question for consideration in these four appeals is the classification of regulators for electric fan manufactured by each of the appellants.
2. It is the case of the common advocate for the appellants that these regulators should be classified under heading 8414.20 of the tariff. It is the department's case, as contained in the impugned order of the Commissioner (Appeals) that they are classifiable under sub-heading 8414.99 of the tariff.
3. Heading 84.14 and the sub-headings as they stood at the relevant time (1993-94) are reproduced below :
"84.14 Air or vacuum pumps, air or other gas compressors and fans, ventilating or recycling hoods incorporating a fan, whether or not fitted with filters.
8414.10 Gas compressors of a kind used in a refrigerating and air
conditioning appliances and machinery.
8414.20 Electric fans
8414.80 Other - Parts and accessories :
8414.91 Of goods covered by sub-heading No. 8414.10
8414.99 Other"
2. The arguments of the Advocate for the appellants are that Note 2 of Section XVI of the tariff will apply. This provides that parts which are goods included in all the chapter heading 84 or 85 (other than headings 84, 85, 84.48) are to be classifiable in their respective headings. These goods are parts of fans and therefore are to be classified under Heading 84.14. Subheading 20 of this heading is for electric fan and the goods therefore are to be classifiable under this heading. Sub-heading 99 of Heading 84.14 will only apply to parts and accessories of goods classifiable under Heading 84.14 other than electric fans. He also draws our attention to the Harmonised System of Nomenclature Explanatory Notes in this regard particularly classification of accessory claiming that to be accessory of fan apparatus. When it was pointed out to him, that it is difficult to conceive of these goods as both parts and accessories, he maintained that these regulators could be both parts as well as accessories at the same time.
3. It is not possible for us to accept that any article can simultaneously be a part of another article and also be its accessory. It has to be one or the other. A part, as is understood in the engineering terminology, is one without which the article of which it is a part is not complete. An accessory, on the other hand, is one which contributes to the better or more efficient functioning of that article. It is not possible for us to accept that a regulator of an electric fan is a part of that fan. A regulator of a fan which is not integral to that fan is not a part of that fan. It is only in the case of a fan, such as a pedestal or table fan which is sold with the regulator incorporated in it, that ... the regulator is a part. In that case, a fan without a regulator would not be complete. In the case of a ceiling fan, for which the subject goods are regulators, the position is different. The fan itself is complete, in all respects without the regulator. A regulator in fact is connected, a distance away from the fan by means of electric wires. A ceiling fan can run, although in single speed, without the regulator. The function of the regulator is to regulate the volume or flow of electric current to the motor in the fan so as to regulate the speed at which the blades revolve. It was contended that since generally fans not sold without regulator, the regulator is part of that fan. This logic does not hold good. An electronic clock invariably requires a battery to run it, and a computer the software to operate it. In neither case, however, can it be said that the battery or the operating software for the computer is a part of the clock or the computer. Regulators themselves are therefore correctly regarded as accessories.
4. The significance of Note 2(a) to Section XVI of the tariff is therefore ruled out. It applies to parts. In any event, even assuming these goods to be parts of fans, it applies to those parts which are those goods included in any of the headings of chapter 84 or 85 (other than those excluded). Regulators are not specified in chapter 84.14. Even on the further assumption that Note 2(a) will apply still does not make any difference. The classification claimed by the appellant and the department is both under heading 85.14 and therefore the requirement of that note that the goods must be classified in the same heading is satisfied. The note does not refer to the sub-heading under the same heading but the heading.
5. The plain reading of the heading indicates that electric fans are to be classified under sub-heading 20 of Heading 85.14. Parts and accessories of goods covered by heading 8514.10 gas compressors of specified type are to be classified under sub-heading 91. Other parts and accessories are to be classified under sub-heading 99. These other parts and accessories will evidently be all parts and accessories classifiable under Heading 85.14 other than parts and accessories of goods covered by sub-heading 10. It will therefore include parts and accessories of electric fan.
6. This is our finding on our analysis of the relevant provisions of " the tariff. The Tribunal in its decision in M.X. Electric (India) Ltd. v. CCE -1999 (107) E.L.T. 262 has come to the same conclusion on the classification but on a different reasoning. That reasoning is as follows. The regulators are accessories of electric fans. The Board's circular dated 27-3-1996 provides that when regulators are cleared along with fans, their classification should be under sub-heading 20 and when they are cleared separately and not along with the fan, they are to be classifiable under sub-heading 8414.99. The Advocate for the appellant relies upon on an earlier circular of the Board dated 24-6-1987 which provides that both resistance type and choke type fan and regulators are classifiable under heading 8414.20 along with the fans. He says that this circular that will prevail for the clearances during the relevant period and not the latter circular of 1996. If the classifications were to be governed only by the Board's circulars, the appellant might have a case. The circular of 1987 specifically provides that these are classifiable under heading 8414.20. It does not, as the Assistant Collector interprets, lend itself to the interpretation that it is only those regulators which are cleared along with the fans that are to be so classified.
7. However, it is the function of this Tribunal to decide the correct classification and in that function it is not bound by any circular of the Board. We are not concerned here with the classification of regulators cleared with fans in which case the provisions of Notes 4 and 5 of Section XVI of the tariff may apply. We are concerned only with the clearance of regulators themselves. We have decided that classification.
8. The appeals are accordingly dismissed.