1985 (3) TMI 145 - AT - Central Excise

Summary

Issues: Allegation of recovering higher price for water coolers without condensing units, imposition of penalty and duty, interpretation of Tariff Item 29-A, classification of cooling coils and cabinets under Central Excise Tariff.

In this case, the Appellate Tribunal CEGAT, New Delhi addressed the allegation against M/s. Air Mechanical Engineers for recovering a higher price for water coolers without condensing units. The department contended that duty was chargeable on parts like cooling coils and cabinets under Tariff Item No. 29-A (iii). The Order in Original imposed a penalty and demanded duty on cooling coils and cabinets allegedly removed without payment. The Appellants argued that the parts in question were not covered under Tariff Item 29-A and challenged the imposition of duty and penalty, citing the decision in Frick India's case in their favor.

The Respondents maintained that the cooling coils and cabinets should be treated as parts of refrigeration equipment under Tariff Item 29-A (iii). They argued that the value of these parts should not be excluded from the assessable value of the water coolers as they are integral components of the system. Despite mentioning supportive court decisions, no citations were provided. The Tribunal examined Tariff Item 29-A, which includes refrigerating and air-conditioning appliances and machinery and their parts, and considered whether the cooling coils and cabinets cleared by the Appellants fall under this item.

Upon analysis, the Tribunal found that the water coolers manufactured by the Appellants did not qualify as air-conditioning or refrigerating appliances as they lacked compressors and condensers. They differentiated between the coils used in their equipment and traditional cooling coils, citing the Government's decision in Frick India's case. The Tribunal concurred with the Government's view that water coils are distinct from cooling coils and held that the disputed coils were not excisable under Tariff Item 29-A (iii). Consequently, they ruled that the cabinets of the equipment in question also did not attract duty under the Central Excise Tariff. Therefore, the impugned order, including the demand for duty and penalty, was set aside, and the Appeal was allowed.