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Issues: Classification of imported item "Centrifugal Chiller" under Customs Tariff Act - Applicability of Chapter Heading 8418.69 vs. 85.17
Issue 1: Classification under Chapter Heading 8418.69 vs. 85.17 The appeals raised a common question regarding the classification of the imported item "Centrifugal Chiller." The Appellants initially classified it under Chapter Heading 8418.69 of the Customs Tariff Act, which was not objected to by the department at the time of clearance. However, a short levy notice was later issued for reclassification as "part of the Refrigerator" under heading 85.17. The Commissioner upheld the Revenue's view after a hearing, rejecting the original classification. The Appellants argued that the item should not be classified as part of a Refrigerator due to its independent function, distinct from the components of a Refrigerator such as evaporator, condenser, and motor mixture. They presented evidence supporting the item's classification as a chiller, including expert opinion not considered by the Revenue. Reference was made to a Tribunal ruling in Carrier Aircon Ltd. v. CC, 2001, where a similar item was classified under 8418.69 based on its primary function of chilling water using a Refrigeration circuit. The Appellants contended that the benefit of a Notification had not been granted, as in the previous case, and thus, the appeals should be allowed based on precedent and legal interpretations. Issue 2: Arguments of the ld. DR The ld. DR argued that the function of the item in question is related to "refrigeration," suggesting that it should be classified under heading 84.15, which covers air-conditioning machines. Referring to the HSN explanatory note, it was contended that heading 84.15 includes refrigeration units, cold water coolers, and other cooling elements. The ld. DR emphasized that for classification under Heading 84.18, the temperature should decrease below 0o C, which was not the case with the item in question. Therefore, the argument was made for classifying the item under Heading 84.15 based on its function and characteristics. Issue 3: Judicial Analysis and Decision Upon careful consideration, the Tribunal reviewed the arguments presented by both sides, including those raised by the ld. DR. Reference was made to previous judgments, such as Carrier Aircon Ltd. (supra) and Western Refrigeration Pvt. Ltd. v. CC, Bombay 1995, where similar items were classified under sub-Heading 8418.69 without challenge from the Revenue. The Tribunal noted that the judgments provided a clear precedent, making it difficult to deviate from the established classification principles. Following the judicial discipline and the ratio of the previous judgments, the Tribunal set aside the impugned order and allowed the appeal, granting consequential relief as necessary. The decision was based on the consistent interpretation of the Customs Tariff Act and relevant legal precedents, ensuring uniformity in classification practices.
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