1987 (2) TMI 398 - AT - Central Excise

Summary

Issues:
1. Classification of electric blowers under item 33(3) of the Central Excise Tariff.
2. Interpretation of the Central Excise Rules, 1944 regarding the removal of electric blowers.
3. Application of the doctrine of promissory estoppel based on Tariff Advice.

Analysis:
The judgment by the Appellate Tribunal CEGAT, New Delhi dealt with the classification of electric blowers under item 33(3) of the Central Excise Tariff. The controversy revolved around whether the assembly of Impellers and Propellers, along with the motor of air conditioners and water coolers, constituted an electric blower or fan. The Appellate Collector contended that such blowers lacked a casing and were not commercially recognized as electric blowers. However, the department argued that the frame of the air-conditioner or water cooler served as a casing for the blower, supported by references to authoritative sources and the respondent's own admission in a letter.

The respondents acknowledged that their assembly produced an electric blower inside the air-conditioner or water cooler but emphasized that the blower came into existence within these appliances, not separately. They relied on a Tariff Advice stating that parts assuming the shape of a blower before fitting into appliances would fall under item 33(3). They claimed entitlement to the doctrine of promissory estoppel based on this advice and a Supreme Court judgment. The department countered with a circular letter superseding the Tariff Advice and citing a different scenario involving bottle cooler fans.

Upon careful consideration, the Tribunal sided with the respondents, noting that the electric blower only took an identifiable form inside the air-conditioner or water cooler. As the blower did not exist separately before fitting into these appliances, there was no removal of electric blowers as per the Central Excise Rules. The Tribunal rejected the department's argument that the blower was removed inside the appliances, clarifying that only air conditioners and water coolers were removed, not standalone blowers. Consequently, the respondents were absolved of liability, and the Revision Show Cause Notice was discharged, with the appeal dismissed based on the doctrine of promissory estoppel arising from the Tariff Advice.