1992 (1) TMI 107 - HC - Central Excise

Summary

Issues:
Challenge to judgment setting aside government order under Section 36(2) of Central Excises and Salt Act regarding classification of impellers and motors assembly as electric fans under Tariff Item No. 33.

Analysis:
The respondent-company, engaged in manufacturing air-conditioners and water coolers, challenged the government order classifying impellers and motors assembly as electric fans. The company argued that these components are integral parts of air-conditioners and water coolers, lacking independent mounting or speed regulators. The Appellate Collector supported this view, emphasizing the functional and structural differences between impellers and motors used in air-conditioners and traditional electric fans under Tariff Item No. 33. The Central Government, relying on the Brussels Tariff Nomenclature, upheld the classification as electric fans, leading to the company's challenge in Writ Petition No. 261 of 1981.

The single Judge, in the impugned judgment, set aside the government's decision, reinstating the Appellate Collector's view. The Judge criticized the government for misinterpreting the Nomenclature and overlooking relevant definitions. The Judge highlighted that the impeller motor assembly does not qualify as an electric fan, as per commercial and technical standards. The Judge found no basis for the government's decision to overturn the Appellate Collector's order.

The High Court upheld the single Judge's decision, dismissing the government's appeal. The Court emphasized that relying solely on the Brussels Tariff Nomenclature for classification is erroneous, as established by previous Supreme Court rulings. The Court agreed with the single Judge's assessment that the impellers and motors, when integrated into air-conditioners, do not meet the criteria for electric fans under Tariff Item No. 33. The Court concluded that the government's review lacked substantive grounds and affirmed the Appellate Collector's original order.

In summary, the High Court rejected the government's appeal, affirming the single Judge's decision to set aside the government's classification of impellers and motors assembly as electric fans under Tariff Item No. 33. The Court emphasized the lack of merit in the government's reliance on the Brussels Tariff Nomenclature and supported the Appellate Collector's findings regarding the functional and structural distinctions between the components in question and traditional electric fans.