2002 (7) TMI 319 - AT - Central Excise

Summary

Issues:
Classification of refrigerating machinery under Chapter heading 84.18 vs. 84.19, Benefit of exemption Notification No. 56/96.

Classification Issue:
The Revenue appealed against the Commissioner's classification of refrigerating machinery under Chapter heading 84.18 instead of 84.19. The Revenue contended that the benefit of exemption Notification No. 56/96 should not apply. The Counsel for the Appellant argued that the item was not covered under Chapter heading 84.19 as per the HSN explanatory notes, which exclude refrigerating machinery. The Counsel pointed out that Heading 84.19 refers to machinery, plant, or laboratory equipment, not refrigerating machinery, which is covered under Heading 84.18. The Counsel supported their argument with the description of the item in the invoice and an affidavit confirming the equipment's temperature below zero degrees. They referenced precedents where cooling effects around zero or sub-zero temperatures were considered necessary for classification under Heading 84.18. The Tribunal noted that the Revenue did not dispute the equipment's cooling effect of MINUS 20 degrees Celsius. The HSN explanatory notes clearly excluded refrigerating machinery from Heading 84.19 and referred to refrigerating equipment with temperatures around zero degrees or less under Heading 84.18. The Tribunal cited previous judgments supporting this interpretation and upheld the Commissioner's classification under Heading 84.18.

Exemption Notification Issue:
The Commissioner had granted the benefit of exemption Notification No. 56/95, which partially exempts refrigerators and other refrigerating machinery under specific chapters of the Central Excise Tariff. The Revenue argued that the item in question was a plant, not machinery, and thus not eligible for the exemption. However, the Commissioner justified the exemption by referring to the definition of machinery, which includes plant as per Section Note (5) of Section XVI. The Tribunal agreed with the Commissioner's decision, emphasizing that the grant of exemption was valid based on the item's classification under Chapter heading 84.18. The Tribunal rejected the Revenue's plea, stating that all grounds raised by the Revenue had been decisively addressed by relevant judgments and HSN notes, concluding that there was no merit in the Revenue's appeal.

This judgment clarifies the proper classification of refrigerating machinery under the Central Excise Tariff Act, emphasizing the importance of cooling effects and specific headings. It also highlights the correct application of exemption notifications based on accurate classification and definitions within the legal framework.