1997 (7) TMI 326 - AT - Central Excise

Summary

Issues:
Interpretation of Notification No. 1/93 regarding the benefit for goods classified under Tariff Heading 84.83 as parts of Refrigeration and Air-conditioning machinery.

Analysis:
The case involved a dispute over the applicability of Notification No. 1/93 to goods classified under Tariff Heading 84.83, specifically Bushing Crank case to Bush Bearing case, as parts of Refrigeration and Air-conditioning machinery. The original authority denied the benefit of the notification based on the exclusion of parts of refrigeration and air-conditioning accessories and appliances. However, the lower appellate authority allowed the benefit, emphasizing that only parts contributing to the function of refrigeration or air-conditioning should be excluded from the scope of the notification.

The revenue challenged the lower appellate authority's decision, arguing that all parts and accessories of Air Conditioner and Refrigeration appliances falling under Chapter 84, 85, or 90 are excluded from the notification's benefits. They also referenced a Trade Notice classifying the item as parts and accessories of Air-Conditioning and Refrigerating machinery. The revenue contended that the interpretation by the assessee was unfounded and that any parts under the specified chapters are not entitled to the notification's benefits.

The JDR for the department reiterated that the notification excludes parts and accessories of refrigerating and air-conditioning machinery falling under specific chapters. They argued that allowing benefits to items usable in such machinery under Chapter 84 would undermine the exclusion clause's purpose. The department sought to set aside the lower appellate authority's order based on the use of the items in question.

On the respondents' side, it was argued that the exclusion should be narrowly interpreted, excluding only items identifiable as refrigeration and air-conditioning machinery parts. Reference was made to other notifications issued by the Government concerning refrigerating and air-conditioning machinery to support this argument. Additionally, a clarification by the Ministry regarding parts and accessories of refrigerating and air-conditioning appliances was highlighted to justify the lower authority's decision.

After considering both sides' arguments, the Tribunal observed that the exclusion under the notification covered both parts and accessories usable for refrigeration and air-conditioning machinery falling under Chapter Heading 84, 85, or 90. The Tribunal emphasized that parts specifically designed for use in refrigeration and air-conditioning machinery must be considered as part of those appliances. As the goods in question were exclusively designed for such machinery, they were deemed excluded from the notification's benefits. Consequently, the Tribunal allowed the revenue's appeals and set aside the lower authority's order, noting that the exclusion was broad and had to be interpreted accordingly.