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Interpretation of Item No. 29A of the Central Excises and Salt Act, 1944 regarding the levy of duty on parts of refrigerating and air-conditioning appliances, specifically in the context of welding steel pipes for cold storage installation. Analysis: The judgment concerns a dispute over the levy of excise duty on the welding of duty paid steel pipes in 'U' shape for the installation of a cold storage system. The petitioners argue that the welding does not amount to the manufacture of excisable goods under Item No. 29A of the Central Excises and Salt Act, 1944. They contend that duty can only be levied on parts of refrigerating and air-conditioning appliances that are ordinarily sold as ready assembled units, which does not apply to the specific pipes used for the cold storage system installation. The petitioners assert that the pipes are not goods that can be bought or sold independently in the market and have no utility outside the cold storage system. They rely on precedents from Allahabad and Kerala High Courts to support their interpretation of Item No. 29A(3) and argue that duty should not be imposed on parts not commonly sold as assembled units. During the hearing, a point of law arose regarding the interpretation of Item No. 29A. Reference was made to a decision by the Allahabad High Court, which held that duty under Item No. 29A applies only to parts of refrigerating and air-conditioning appliances that are commonly sold as assembled units. The court emphasized that the concept of sale is crucial in determining the applicability of duty. The Kerala High Court also supported this interpretation in a separate case. However, a dissenting view was presented by the Gujarat High Court, which held that cooling coils and condensers used for captive consumption, even if not for sale, are classifiable under Item 29A(3) and are subject to excise duty. The Gujarat High Court rejected the notion that duty is restricted to goods manufactured for sale and emphasized the clear description of goods in the tariff. After considering the arguments and conflicting decisions from different High Courts, the Court found a difference in the interpretation of Item No. 29A and its sub-items. While some courts held that duty applies only to assembled units or parts commonly sold as such, the Gujarat High Court took a broader view, imposing duty on items falling within the description of Item No. 29A(3) regardless of their treatment as assembled units. Due to this discrepancy, the Court referred the dispute to a Division Bench for resolution, recognizing the need for a definitive decision on the matter. In conclusion, the judgment highlights the conflicting interpretations of Item No. 29A of the Central Excises and Salt Act, 1944 regarding the levy of excise duty on parts of refrigerating and air-conditioning appliances. The Court's decision to refer the matter to a Division Bench reflects the need for clarity and consistency in determining the applicability of duty to items like the welded steel pipes used for cold storage system installation.
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