2004 (10) TMI 395 - AT - Central Excise

Summary

Issues:
Dispute over classification of cleared items as car air-conditioners or individual parts for car air-conditioners.

Analysis:
The dispute in this case revolves around the classification of individual sub assemblies like condensers, compressors, and evaporators cleared by the appellant, whether they constitute a car air-conditioner or parts meant for a car air-conditioner. The primary question addressed is whether the clearance of these individual sub assemblies amounts to the clearance of a car air-conditioner itself. The Tribunal emphasized that a car air-conditioner cannot be produced solely with condensers, evaporators, and compressors; additional equipment such as pulleys, brackets, and hoses are essential to form an air-conditioning system. Furthermore, the power for the auto air-conditioning systems is provided by the car engine, and alignment with the car's radiator is necessary for the system to function. Therefore, it was concluded that the cleared items do not constitute an air-conditioner in an unassembled form or completely knocked down (CKD) form. The goods must be assessed under their respective headings as parts and not as complete air-conditioners in CKD condition. The Tribunal highlighted that Rule 2A of Interpretative Rules, which deals with the classification of goods presented in CKD condition, does not apply in this case. The judgment also pointed out other deficiencies in the Commissioner's order, but it was deemed unnecessary to address them as the Tribunal held that condensers, evaporators, and compressors should be assessed as parts and not as a car air-conditioner. Consequently, the appeal was successful, and the order of the Commissioner (Appeals) was set aside.