1989 (1) TMI 218 - AT - Central Excise

Summary

Issues:
- Whether the electric blower/fan assembled inside the drier chamber is liable to Central Excise duty as an industrial fan under Item 33(2) of the Central Excise Tariff.

Analysis:
1. The appellants manufactured various machines incorporating a drier chamber, which included a blower/fan assembled inside the chamber to circulate hot air. A show cause notice was issued, and duty was demanded for the blower/fan under Item 33(2) of the Tariff. The Collector imposed duty for the period from 1-4-1979 to 28-2-1982 and a penalty for alleged clandestine removal of goods, leading to the current appeal.

2. The Tribunal considered whether the blower/fan, which became an integral part of the drier chamber upon assembly, was separately identifiable and chargeable to duty. It was noted that the fan did not exist independently but only within the drier chamber and could not be marketed separately. The Tribunal relied on a prior judgment where a similar scenario involving an air-conditioner/water cooler was deemed non-excisable as a fan.

3. The department cited High Court judgments to support taxing the blower/fan as an industrial fan. However, the Tribunal distinguished those cases where separate identifiable products were created, unlike in the present scenario where the fan was an integral part of the drier chamber. The Tribunal emphasized that under the old Central Excise Tariff, only commercially identifiable electric fans could be taxed as excisable goods.

4. Following the precedent set in a previous case, the Tribunal ruled that the fan/blower inside the drier chamber was not liable to duty as an industrial fan under Item 33(2) of the Central Excise Tariff. As a result, the appeal was allowed, and the lower order was set aside in favor of the appellants. Other legal and technical pleas made by the appellants were not addressed due to the favorable substantive ground decision.