Classification of Stators & Rotors used in the manufacture of Hermetically sealed Gas Compressors - Central Excise - 29/89

Classification of Stators Rotors used in the manufacture of Hermetically sealed Gas Compressors Circular No. 29/89 Dated 13-12-1989 [From F. No. 147/2/89-CX.4] Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Classification of Stators Rotors used in the manufacture of Hermetically sealed Gas Compressors. A doubt has been raised regarding classification of stators rotors used in the manufacture of hermetically sealed gas compressors under Heading 85.03 or Heading 84.14. The point was discussed in West Zone Tariff Conference held in Nov., 1988 at Porbander. The sponsoring CCE, Pune stated that an assessee had claimed the classification of the subject goods under H. No. 85.03 as parts of electric motors as per Board's circular No. 6/86, dated 25-9-1986 issued under F. No. 145/5/86-CX.4 (S. No. 47). He, however, felt that though these 'stators and rotors', which were specifically designed for use in the compressor, too, become an intergral part of an unidentified electric motor, yet in view of Note 2(b) and Section XVI, they would merit classification under Sub-H.No. 8414.91 as parts and accessories of Gas Compressors of a kind used in refrigerating and air-conditioning appliances and machinery because they were suitable for use solely or principally with compressors. The Conference took note of the fact that under the erstwhile tariff these goods were being classified under T.I. 30(D) as parts of electric motors including die cast rotors in view of specific mention therein. However, the classification is equally forceful under both the headings i.e. under 85.03 and 84.14, although it is slightly loaded in favour of H.No. 85.03 since in the case of compressor also an electric motor comes into existence functionally, not in identifiable manner notwithstanding. It was, therefore, decided to obtain the opinion of D.G.T.D. as to whether Stators and Rotors used in the compressors could also be treated as parts of electric motor. 3. DGTD has been consulted. They have opined that "in the sealed compressor unit, the rotor stator, through a crankshaft, will function as a prime mover for the compressor. These are designed and engineered as part of hermetically sealed compressor. The stators and rotors are, therefore, not a standard bought-out items. The stators and rotors of hermetically sealed compressors are parts for use solely or principally with these compressors and these items can be classified under heading 84.14 of the Tariff." 4. Board has agreed with the above views and accordingly holds that the stators and rotors of hermetically sealed compressors are parts of the compressors for use solely or principally with the compressors and are appropriately classifiable under heading 84.14. Board's earlier instructions contained in F. No. 145/5/86-CX.4, dated 25-9-1986 providing for classification under heading 85.03 may be treated as modified in respect of such stators rotors for hermetically sealed compressors. However, the practice followed in the light of earlier clarification of the Board may be changed only prospectively. 5. Field formations may be informed accordingly.