2005 (10) TMI 388 - AT - Central Excise

Summary

Issues: Classification of 'sconce micro refrigerator' under Chapter Heading 84.18 for duty rate determination.

Analysis:
The case involves the classification of a product named 'sconce micro refrigerator' for determining the applicable duty rate under Chapter Heading 84.18. The initial adjudicating authority rejected the claim of the assessees for classification under Chapter Heading 84.18, which attracts a duty rate of 40% ad valorem, and instead classified the item under Heading 8415.00, which has a lower duty rate of 20% ad valorem. The adjudicating authority based this decision on the function of the product, which was deemed to be similar to an air-conditioning machine regulating temperature and humidity at specific levels. However, the lower appellate authority overturned this decision, noting that the product was a compressor type refrigerator with essential elements like compressor, condensers, and evaporator. Consequently, the Revenue filed an appeal challenging this decision.

Upon review, the Tribunal considered the definitions under Heading 84.15 and Heading 84.18 to determine the appropriate classification for the 'sconce micro refrigerator.' Heading 84.15 pertains to "Air-conditioning machines," while Heading 84.18 relates to "Refrigerators, freezers, and other refrigerating or freezing equipment." The Tribunal observed that the adjudicating authority did not establish that the product included a motor-driven fan, a key component under Heading 84.15. In contrast, the Commissioner (Appeals) highlighted the presence of essential elements like compressor, condensers, and evaporator, supporting a classification under Heading 84.18. The Tribunal referenced the HSN Explanatory Notes, which specify that machines under Heading 84.15 must include a motor-driven fan or blower for temperature and humidity control. Since the 'sconce micro refrigerator' lacked this component, it did not qualify for classification under Heading 84.15. Consequently, the Tribunal upheld the decision of the Commissioner (Appeals) to classify the product under Heading 84.18, affirming the lower appellate authority's order and dismissing the Revenue's appeal.