2004 (9) TMI 505 - AT - Central Excise

Summary

Issues:
Appeal against confirmation of duty demands on "Air Handling Unit" - Non-compliance with Section 35F of the Central Excise Act - Interpretation of Board's Circular regarding classification of "fan or blower for circulating the air" - Assessment of "Air Handling Unit" as part of Air-conditioning machine.

Analysis:
The judgment pertains to appeals challenging duty demands on "Air Handling Units" manufactured and cleared during specific periods. The original authority confirmed the duty demands, leading to the assessee's appeals to the Commissioner (Appeals). The Commissioner (Appeals) directed a pre-deposit of Rs. 30 lakhs, with waiver and stay granted for the balance. However, the assessee only deposited Rs. 15 lakhs, which was deemed insufficient compliance with the directive, resulting in the rejection of the appeals based on non-compliance with Section 35F of the Central Excise Act.

The appellants argued a strong prima facie case based on a Board's Circular stating that "fan or blower for circulating the air" is an essential element of an Air-conditioning machine. They contended that the "Air Handling Unit" should be assessed as part of an Air-conditioning machine, distinct from it. The original authority had vacated a similar demand following the Board's circular. The Tribunal considered the circular and found a strong prima facie case against the duty demand on the "Air Handling Unit" treated as an Air-conditioner, thus ruling against further deposits under Section 35F of the Central Excise Act.

Consequently, the Tribunal set aside the impugned orders and directed the Commissioner (Appeals) to review the appeals on their merits, adhering to legal principles and natural justice without requiring additional deposits. The appeals were allowed by remand under these terms, emphasizing the significance of the Board's Circular in the classification and assessment of the "Air Handling Unit" in question.