Central Excise - Classification of Chir/Plywood Scantilings timber plywood of assembly used in errection and commission of towers, glass fibres reinforced plastic goods and cooling towers - Regarding - Central Excise - 5/88

Central Excise - Classification of Chir/Plywood Scantilings timber plywood of assembly used in errection and commission of towers, glass fibres reinforced plastic goods and cooling towers - Regarding Circular No. 5/88 Dated 29-2-1988 [From F. No. 145/4/87-CX.4] Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Central Excise - Classification of Chir/Plywood Scantilings timber plywood of assembly used in errection and commission of towers, glass fibres reinforced plastic goods and cooling towers - Regarding. Certain doubts had been raised with regard to the classification Chir/plywood scantlings, timber/plywood assembly used in errection and commissioning of cooling towers at site, glass fibre-reinforced plastic grids also used for the same purposes and the rate of duty chargeable on cooling towers. As regards the classification of Chir/plywood, scantlings, timber/plywood assemblies used in errection and commissioning of cooling towers at site, such goods would appeal to be classifiable as sawn or chipped wood under sub-heading No. 4403.00 of the Central Excise Tariff, or in view of note 1(K) of Chapter 44 of the Central Excise Tariff which excludes articles of Section XVI a doubt has arisen as to whether such goods should be classifiable under Chapter 84 as 'parts of cooling towers'. However, as per HSN Explanatory notes for 'general content' of Section XVI (page 1130), goods covered more specifically in other Sections are excluded from the scope of Section XVI of the HSN. Therefore, if any item is more specifically covered in Chapter 44 it is then excluded from Chapter 84. As per HSN Explanatory Notes (page 622) Sawn, chipped, sliced, peeled, planed, sanded, end-jointed, e.g. finger-jointed and continuously shaped wood is classifiable under HSN Heading No. 44.07 to 44.09. Therefore, such goods could be appropriately classified under Heading No. 44.03 of the Central Excise Tariff. 2. As regarding glass fibre-reinforced plastic grids, it is found that, as per HSN (page 550), heading No. 39.25 which covers builders' ware of plastic, applies to articles mentioned under Chapter note 11 of Chapter 39. Heading No. 39.25 and Chapter Note 11 of Chapter 39 of HSN are identical to heading No. 39.25 and Chapter note 11 of Chapter 39 of the Central Excise Tariff. As per Chapter note 11 of Chapter 39, heading No. 39.25, inter alia covers structural elements used for example, in floors, walls or partitions, ceiling of roofs and fittings and mountings intended for permanent installation in or on doors, windows, staircases, walls or other parts of building, for example, knobs, brackets, tacel rail, switch plates and other protective plates. Since the plastic grids are used in cooling towers at site, it may be classified under heading No. 39.25 of Central Excise Tariff as builders, ware of plastics. 3. As regards cooling towers, attention is invited to HSN Heading No. 84.18, which covers refrigerating equipments (page 1169). It is stated in the relevant explanatory notes of HSN that refrigerators, refrigerating equipment of this heading are, in the main, machines, or assemblies of apparatus for the production, in a continuous cycle of operations of low temperatures (in the region of 0° C or less) at the active cooling element, by the absorption of the latent heat of the evaporation of liquified gases (for example ammonia, helogenated hydrocarbon) of Volatile liquids or in the case of certain marine types, of water. Similarly, HSN Heading No. 84.15, which covers air conditioning machines is stated to cover certain apparatus for maintaining required conditions of temperatures and humidity in closed places. The mahines may also comprise elements for the purification of air (page 1164). It has been reported that cooling towers are used only to bring down the temperature of incoming process water' through thermodynamic process, to near-atmospheric temperature. In this process, the hot water loses temperature to the atmospheric air which is cycled in direct or indirect contact with warmer water. The cooling tower is stated to be a tower or building-like device in which atmospheric air (heat received) circulates in direct and indirect contact with warmer water (heat source) and the water is thereby cooled. The cooling tower may serve as a heat sink in a conventional thermodynamic process such as refrigeration or steam-power generation or it may be used in any process in which water is used as the vehicle for heat removal. Water acting as a heat transformer fluid gives up heat to atmospheric air and this cooled water is circulated through the system affording economical operation to the process. Therefore, cooling tower, as described above, performs neither the function of a refrigerating machinery nor that of an air-conditioning machinery. In view of this, cooling towers would remain classifiable under heading No. 84.19 as a product of that heading other than refrigerating or air-conditioning machinery and would be appropriately chargeable to duty @ 15% ad valorem, under notification No. 155/86-CE, dated 1-3-1986, as amended (Sr. No. 3). 4. The trade interests may also be suitably advised. 5. All pending assessments may be finalised on the above basis.