2004 (7) TMI 634 - AT - Central Excise

Summary

Issues: Classification of Semi-Hermatic Reciprocating Package Liquid Chiller and Centrifugal Liquid Chiller under Central Excise Rules, 1944.

In this judgment by the Appellate Tribunal CESTAT MUMBAI, the issue revolved around the classification of Semi-Hermatic Reciprocating Package Liquid Chiller and Centrifugal Liquid Chiller under the Central Excise Rules, 1944. The respondents had claimed classification under CETA sub-heading 8418.00 attracting a duty rate of 20% ad valorem, while the department argued for classification under CETA sub-heading 8415.00 with a duty rate of 30% ad valorem. The Assistant Commissioner initially upheld the classification under 8415.00, but the Commissioner (Appeals) accepted the claim of the assessees for classification under 8418.00, leading to the appeal by the Revenue.

The key point of contention was whether the chillers should be classified under Chapter Heading 84.18 or 84.15. The Tribunal referred to previous decisions in Carrier Aircon Limited v. CCE, Delhi-III, Indian Hotels Limited v. CC, Chennai, and Lakeshore Hospital & Research Centre Ltd. v. CC, Kochi, which had established that chillers primarily used for producing chilled water for refrigeration circuits fall under Chapter Heading 84.18, excluding them from the category of air-conditioning machines covered under Heading 84.15. The Tribunal noted that the function of chilling water for various industrial processes in the present case aligned with the rationale of the previous decisions. Therefore, the Tribunal upheld the order of the lower appellate authority, rejecting the appeal of the Revenue.

In conclusion, the judgment clarified the classification of Semi-Hermatic Reciprocating Package Liquid Chiller and Centrifugal Liquid Chiller under the Central Excise Rules, 1944. It highlighted the distinction between refrigeration equipment and air-conditioning machines, emphasizing the primary function of the chillers in producing chilled water for industrial processes. The decision aligned with previous rulings, providing a clear precedent for similar cases in the future.