1976 (11) TMI 70 - HC - Central Excise

Summary

Issues:
Interpretation of entry 33 (1) and entry 33 (2) of Schedule I to the Central Excises and Salt Act, 1944 for Swishflo Fan classification.
Exemption of electric motors under notifications dated March 1, 1969 and March 17, 1972.
Applicability of the lower rate of duty at 7.2 per cent ad valorem based on the diameter of the fan.

Analysis:
The case revolved around determining whether Swishflo Fan falls under entry 33 (1) or entry 33 (2) of Schedule I to the Central Excises and Salt Act, 1944. The respondents contended that it falls under entry 33 (3) and should be levied with excise duty at 12 per cent ad valorem. The petitioners argued that Swishflo electric fan falls under sub-item (1) of Item No. 33, warranting duty payment at a lower rate of 7.2 per cent ad valorem. The dispute also involved the classification of the fan based on its diameter and the motors used in it.

The notification dated March 1, 1969 exempted electric motors, rotors, and stators used in the manufacture of electric fans from excise duty. The respondents claimed that the exemption ceased after March 17, 1972, based on a subsequent notification. However, the court disagreed, stating that the subsequent notification did not revoke the earlier exemption. A further notification in September 15, 1973 expanded the exemption to include electric fans on which excise duty is leviable, whether in whole or in part.

Regarding the classification based on diameter, the Assistant Collector rejected the petitioners' claim under sub-item (1) due to the unconventional shape of the Swishflo fan. However, the court determined that the fan indeed falls under sub-item (1) of Entry 33, as it meets the criteria of an electric fan despite its unique design. Therefore, the court ruled in favor of the petitioners, directing the respondents to levy excise duty on Swishflo fans according to the rates specified in Entry No. 33 (1).