2005 (10) TMI 325 - AT - Central Excise

Summary

Issues: Classification of "Cold bar" under Heading 84.19 or 84.18 for the period July to September, 1995.

In this case, the dispute revolved around the classification of a "Cold bar" for the period July to September, 1995. The assessee initially classified the item under Heading 84.19 and benefited from a concessional rate of duty under Notification No. 56/95-C.E. The department disagreed, arguing that the cold bar should be classified under Heading 84.18, attracting a duty rate of 40%. The original authority sided with the department, demanding differential duty from the assessee. However, the Commissioner (Appeals) upheld the classification by the assessee, setting aside the original authority's order. The Revenue then appealed seeking restoration of the original authority's decision.

Upon examination, the Appellate Tribunal found that the cold bar consisted of components like Compressor, Filter Drier, Cooling Table, and Condenser, utilizing Freon gas as a coolant. It was used to provide coolness to a green table for manufacturing automotive tubes. The cold bar operated by condensing atmospheric air below zero degrees centigrade, forming a layer of ice on the green table. The key issue was whether the item should be classified as "refrigerating or freezing equipment" under Heading 84.18 or as machinery/equipment under Heading 84.19. The Tribunal noted that the cold bar did not involve the treatment of materials but was solely used to create an ice layer, essential for the final product's manufacturing process. As the equipment operated on the principle of refrigeration, it was correctly classified as "refrigerating or freezing equipment" under Heading 84.18. Consequently, the Tribunal set aside the previous order and allowed the Revenue's appeal.

In conclusion, the Tribunal's decision clarified the classification of the "Cold bar" under the appropriate heading based on its operational function and purpose, emphasizing the distinction between "refrigerating or freezing equipment" and machinery for material treatment. The judgment highlighted the importance of accurately interpreting the description of goods under relevant headings to determine the correct classification for duty purposes.