1981 (2) TMI 82 - HC - Central Excise

Refrigerating appliance - Liability to duty - Criteria for - Dictionary meanings - Scope - Trade practice

Summary

Issues: Classification of X-Ray processing unit as a refrigerating appliance under Item 29A of the Central Excises and Salt Act, 1944.

In this case, the Appellants challenged the classification of certain X-Ray Processing Units as Refrigerating appliances falling under Item 29A in the First Schedule to the Central Excises and Salt Act, 1944. The main issue was whether the X-Ray processing unit could be classified as a refrigerating appliance due to the application of a cooling process. Both the Collector and the learned Judge had classified the unit as a refrigerating appliance based on the cooling process applied to it. The Appellants argued that the primary purpose of the unit was X-Ray film development, and the cooling process was only for better results, not to convert it into a refrigerating appliance.

The court analyzed the definition of refrigerating appliances under Item 29A, which includes refrigerators, air-conditioners, and parts thereof. The court emphasized that a refrigerating appliance must exist as a unit with the sole purpose of cooling the intended article, such as water or bottles. The court noted that even though a cooling process was attached to the X-Ray processing unit for developing X-Ray films at lower temperatures, the primary purpose of the unit remained unchanged. The court highlighted that the basic character and purpose of the unit, i.e., X-Ray film processing, were not lost despite the addition of a cooling process for better results.

The court rejected the Respondents' argument that the X-Ray processing unit should be considered a refrigerating appliance under Item 29A. The court concluded that even with the cooling process built into the unit, it could not be classified as a refrigerating appliance for excise levy. The court allowed the appeal, set aside the Trial Judge's order, and directed the Respondents to pay the Appellants' costs. The court also rejected the Respondents' application for leave to appeal to the Supreme Court and stayed the order of refund for four weeks, allowing the Appellants to withdraw the deposited costs.

In summary, the court held that the X-Ray processing unit, despite having a cooling process, did not qualify as a refrigerating appliance under Item 29A of the Central Excises and Salt Act, 1944, as its primary purpose remained X-Ray film development, and the cooling process was secondary for achieving better results.