1986 (2) TMI 190 - AT - Central Excise

Summary

Issues Involved:
1. Classification of blade assemblies as electric industrial fans under Central Excise Tariff Item 33(2).
2. Movability of the fans for the purpose of excise assessment.
3. Inclusion of the gear's value in the assessable value of the fan.

Issue-wise Detailed Analysis:

1. Classification of Blade Assemblies as Electric Industrial Fans:
The primary dispute revolves around whether the blade assemblies manufactured by M/s. Paharpur Cooling Towers Private Ltd. qualify as electric industrial fans under Central Excise Tariff Item 33(2). The appellants argue that these blade assemblies are not electric fans because they lack an integral electric motor. However, the tribunal finds that the blade assemblies, when coupled with an external power source, function as electric fans. The tribunal notes that the appellants themselves acknowledge that these fans are generally driven by electric motors, even though they can be powered by other means. The tribunal concludes that the blade assemblies are indeed electric fans as they are designed for use in industrial systems and are driven by electric power, thus falling under Item 33(2).

2. Movability of the Fans:
The appellants contend that the fans, once fixed in the cooling towers, become immovable and thus should not be subject to excise duty. The tribunal rejects this argument, stating that the fans are movable as they are transported and installed at various sites. The tribunal emphasizes that the fans' installation is necessary for their optimal operation and stability, but this does not render them immovable. The tribunal cites the Supreme Court judgment in the DCM case, which establishes that goods must be movable to be assessable under central excise. The tribunal concludes that the fans are movable goods and thus subject to excise duty.

3. Inclusion of the Gear's Value in the Assessable Value of the Fan:
The appellants argue that the gear, which is not manufactured by M/s. Paharpur Cooling Towers, should not be included in the assessable value of the fan. The tribunal disagrees, stating that the gear is an essential component that varies the fan's speed and is integral to its operation. The tribunal concludes that it is appropriate to include the gear's value in the assessable value of the fan, as it is a vital part of the assembly.

Conclusion:
The tribunal rejects both appeals, affirming that the blade assemblies qualify as electric industrial fans under Central Excise Tariff Item 33(2), the fans are movable and thus subject to excise duty, and the gear's value should be included in the assessable value of the fan.