1999 (9) TMI 389 - AT - Central Excise

Summary

Issues:
Interpretation of Notification No. 75/87-C.E. and Notification No. 56/95-C.E. for parts of air conditioners.

Analysis:
The appellants manufactured parts of air conditioners and claimed benefits under Notification No. 75/87-C.E. and Notification No. 56/95-C.E. A Show Cause Notice was issued alleging duty leviable at 40% based on a circular by the Board. The circular clarified that units of split air conditioners when cleared separately are not eligible for concessional duty rates available to parts under Notification No. 56/95. The Assistant Commissioner confirmed the demand, leading to an appeal by the assessees.

Before the Commissioner, the assessees argued that the parts cleared were sub-assemblies and not complete units of a split air conditioner. They contended that additional components were needed to form a complete unit. However, the Commissioner mainly relied on the Board's circular and dismissed the appeal without thoroughly examining the crucial issue of whether the goods cleared constituted a complete unit as per the circular's definition.

The appellate tribunal found the Commissioner's failure to address the crucial issue raised by the assessees as an error. The tribunal emphasized the importance of determining whether the cleared goods formed a complete unit of a split air conditioner to decide the applicability of the Board's circular. As the Commissioner did not analyze this factual aspect, the tribunal set aside the order and remanded the case for a detailed examination by the Commissioner to provide a well-reasoned decision based on the submissions made by the assessees.