1991 (6) TMI 163 - AT - Central Excise

Summary

Issues: Classification of Ice cream machine and Ice candy machine under Notification No. 175/86.

Analysis:
The judgment revolves around the classification of Ice cream machine and Ice candy machine under Notification No. 175/86, dated 1-3-1986. The question at hand is whether these machines can be granted the benefit of the said notification, which exempts specified goods except refrigerating and air-conditioning appliances and machinery. The Assistant Collector initially classified the machines under sub-heading 8419, stating that they are not refrigerators or freezers but treat materials by changing temperature to produce Ice cream and Ice candy. The Collector of Appeals upheld this classification, emphasizing that since the machines are not classified under refrigerating machinery, they do not fall under the exclusion clause of the notification, thereby extending the benefit of the exemption. The Department appealed, arguing that refrigerating and air conditioning machinery is a general term encompassing various functions like cooling and freezing, spread across multiple chapter sub-headings, including 8419. The main contention was whether the machines classified under 8419 fall within the exclusion clause of the notification.

The Department contended that refrigerating and air conditioning machinery parts and accessories are dispersed across various chapter sub-headings, including 8419, making Ice cream machines and Ice candy machines, falling under Heading 8419, ineligible for the benefit of Notification No. 175/86 under para 4(iv) of its Annexure. The crux of the matter was whether the goods classified under 8419 could be considered as falling within the exclusion clause of the notification. However, the classification of the two items under 8419 was not disputed. The notification specifically excludes refrigerating machinery and its parts and accessories. As the machines were not classifiable under refrigerators or refrigerating equipment parts and accessories, but under 8419, which pertains to machinery for material treatment involving temperature change, the exclusion clause did not apply. Since the exclusion clause related to Heading 8418 and 84.15, and the goods in dispute were classified under 8419, the Collector's decision to extend the benefit of the exemption was upheld. Consequently, the appeal of the Department was dismissed, concurring with the Collector's interpretation and application of the notification.