2001 (7) TMI 857 - AT - Central Excise

Issues: Classification of MS Panel Housing and Industrial Fans; Interpretation of Note 2(b) of Section note XVI of the Schedule to C.E.T. 1985

The judgment deals with an appeal regarding the classification of items such as MS Panel Housing and Industrial Fans. The Commissioner (Appeals) had classified these items in favor of the assessee, determining that they were not meant to be used as parts of an Air Conditioner. The Commissioner noted that the items were used for ventilation purposes in Textile Mills and were not specifically meant for Air Conditioners. The Revenue, however, contended that these items should be classified as parts of Air Conditioners based on Note 2(b) of Section note XVI of the C.E.T. 1985. The Revenue sought to set aside the Commissioner's decision and argued that the items were suitable for use solely or principally with Air Conditioners. The Revenue's position was supported by the argument that the MS Panel Housing was supplied to a company manufacturing Air Conditioners.

Regarding the arguments presented, the learned DR for the Revenue emphasized the application of Note 2(b) of Section note XVI, asserting that the items should be classified with the machine they are suitable for use with. The Revenue sought to reverse the decision of the Commissioner (Appeals) based on this interpretation. On the other hand, the counsel for the respondents maintained that the items were general-purpose and not specifically designed for Air Conditioners. The industrial fans were highlighted as being used for ventilation in Textile Mills, supporting the contention that they were not solely or principally meant for use with Air Conditioners. The burden of classification under Note 2(b) of Section note XVI was argued to not have been met by the Revenue, leading to the request for the appeal's dismissal.

Upon reviewing the submissions and examining the items, the Tribunal found that the impugned order correctly classified the items. It was established that the MS Panel Housing was a general-purpose item, not specifically intended for Air Conditioners. Similarly, the industrial fans were confirmed to be used for ventilation in Textile Mills, not as part of Air Conditioning or Refrigeration machinery. The Tribunal concluded that Note 2(b) of Section note XVI did not apply in this case as the items were not solely or principally used with Air Conditioners. Therefore, the appeal by the Revenue was deemed to lack merit, and the decision of the Commissioner (Appeals) was upheld, resulting in the rejection of the appeal.

This detailed analysis covers the issues of classification of MS Panel Housing and Industrial Fans, as well as the interpretation of Note 2(b) of Section note XVI of the Schedule to C.E.T. 1985, providing a comprehensive overview of the judgment's key points and arguments presented by both parties.

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