1997 (12) TMI 407 - AT - Central Excise

Summary

Issues: Classification of compressor as part of bore-well pump under Tariff Heading 8413 or as air compressor under Tariff Heading 8414.

In this case, the primary issue revolves around the classification of a compressor, which the respondents claim to be a part of a bore-well pump, under Tariff Heading 8413 instead of 8414. The lower appellate authority classified the compressor under 8413 based on the argument that it is used solely for moving liquids in bore-well pumps and not for other purposes mentioned under 8414. The revenue, however, contends that the compressor should be classified under 8414 as an air compressor, emphasizing the distinct functions of the compressor and the air distributor in the bore-well pump setup. The dispute centers on whether the compressor should be considered a separate item or an integral part of the bore-well pump for classification purposes.

The lower appellate authority justified the classification under 8413 by highlighting that the compressor, as part of the bore-well pump, serves the specific purpose of moving liquids and cannot be used for other applications mentioned under 8414. The authority reasoned that since the compressor is an essential component of the bore-well pump and not supplied with other parts like distributors or pipes, it should be classified under 8413. The authority relied on the specific functions and limitations of the compressor manufactured by the appellants to support its classification decision.

On the other hand, the revenue challenges the lower authority's classification, arguing that the compressor, despite being part of the bore-well pump setup, retains its identity as an air compressor under 8414. The revenue emphasizes the distinct functions of the compressor and the air distributor in the pump system, asserting that the compressor merely compresses air and does not create the air-water mixture, which is the primary function of the air distributor. The revenue contends that the compressor should be classified separately under 8414 due to its unique function and identity, even when used in conjunction with a bore-well pump.

The appellate tribunal analyzed the classification issue by referring to Tariff Heading 8414, which specifically covers compressors. The tribunal noted that if the compressors are cleared as standalone items, they should be classified under 8414 without considering them as part of a bore-well pump setup. The tribunal applied Rule 3A of the Central Excise Tariff, which prioritizes the most specific description for classification, leading to the conclusion that the compressor should be classified under 8414. Consequently, the tribunal set aside the lower authority's order and allowed the appeal of the revenue, affirming the classification of the compressor under Tariff Heading 8414.