1996 (9) TMI 330 - AT - Customs

Summary

Issues: Classification of Electromagnetic Clutches and Hose Assemblies for Customs Duty and CVD, Eligibility for exemption under Notification No. 80/62-C.E.

In this case, the appellants imported Electromagnetic Clutches and Hose Assemblies, with Electromagnetic clutches being assessed under Customs Tariff Heading 85.02(1) for Basic Excise Duty and under Tariff Item 68 for CVD. The appellants claimed CVD under Central Excise Tariff Item 29A(E) as parts of refrigerating and air-conditioning equipment, seeking exemption under Notification No. 80/62-C.E., dated 24-4-1962.

The appellants argued that Electromagnetic Clutches are specific parts of compressors, supporting their claim with a catalogue. They contended that Tariff Item 68 is a residuary item, citing a relevant case law. On the other hand, the Revenue argued that while the goods are parts of air-conditioning and refrigerating equipment classifiable under Tariff Item 29A(3) of Central Excise Tariff, they would not be eligible for exemption under Notification No. 80/62 due to the exclusion of compressors from the notification.

The Tribunal considered the classification under Tariff Item 29A(3) which refers to "Parts of refrigerating and air-conditioning appliances and machineries." Referring to a catalogue indicating Electromagnetic clutches as part of compressors, the Tribunal noted that Notification No. 80/62 exempts parts of refrigerating and air-conditioning appliances falling under Item No. 29A, excluding specified parts like compressors. The Tribunal clarified that while the impugned goods are parts of compressors, they are not compressors themselves, making them eligible for the exemption under the notification.

Furthermore, the Tribunal emphasized that since Electromagnetic Clutches are specific parts of compressors, they should not be classified under a residuary item like 68. Citing a Supreme Court case, the Tribunal highlighted that an article classifiable under a specific item should not be consigned to a residuary item. Therefore, the Tribunal allowed the appeals, setting aside the impugned order and ruling in favor of the appellants.