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TMI Blog1990 (6) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... al part of a burner which is manufactured by the appellant is liable for excise duty under the Tariff Item 33(2) of the erstwhile Central Excise Tariff. 3. In their Memorandum of Appeal, they state that at the relevant time they were manufacturing different types of boilers. In the oil fired boiler, one oil burner set is fitted, and for every type of oil burner fitted on an oil fired boiler, there is invariably some arrangement for blowing air to support the combustion of the oil. The one type of burner, which is the subject matter of the Collector s order is known as a PF-PAC Oil Burner, which comprises of three parts, viz. (i) burner head/fan unit, (ii) oil heading pumping unit, (iii) Control penal. The part of burner head/fan unit contains air-fan/blower. This is called air-fan/blower because it provides air for combustion of oil. It is not known to the trade or industry and has no distinct name or use. It is not sold in the market as an electric fan or an industrial fan and is not a marketable commodity. That in their own case the Government of India in Revision Application, held that the air fan is part of the burner head/fan unit which has been designed as an integral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India s Order dated 30-6-1977 where in respect of the same goods it was held that it is not an electric fan or industrial fan. Referring to the opinion given by Dr. J.N. Hate, he stated that the opinion was given after examining the actual working of the burner and found that the oil burner was not an industrial system and would not fit into the description under Tariff Item 33(2) of C.E.T. The Department had placed reliance on the statement of Shri Parmeshwaran who was not an expert, and he had nothing to do with fabrication of oil burners. The department should have on the other hand obtained technical opinion from experts. He referred to a decision of the High Court of Bombay, 1988 (36) E.L.T. 15 (Bom.) in the case of M/s. Voltas Limited and Another v. U.O.I., wherein it was held that: Fans-Assembly of motor and propeller used in manufacture of air-conditioners and water coolers-Not capable of independent existence and not treatable as electric fans falling under Item 33(3) of Central Excise Tariff, and Para-7 makes a reference to the expert opinion which has been relied upon. In 1986 (25) E.L.T. 660 (Kar.) - Commissioner for Excise, Karnataka Others v. J.L. Morison, the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r venial breaches of legal provisions. That in respect of other manufacturers no duty was charged and for imposition of penalty on the director, no Show Cause Notice was issued, which was violative of the principles of natural justice. 5. In reply, Shri K.D. Tayal, Ld. S.D.R. dealt with the decision relied upon by the appellant viz. M/s. Stonnac India Ltd. v. Collr. of Central Excise, 1989 (40) E.L.T. 343 (Tribunal). The relevant para-3 was referred which reads as under: - We have given our earnest consideration to the arguments put forth by both sides. Item 33(2) of the tariff applied to industrial fans. Had the appellants first assembled an industrial fan and then removed it and fitted it inside the drier chamber, there is no doubt that the said fan would have been chargeable to duty on its removal for a captive consumption. But we are informed that the facts were not so. No blower/fan was assembled outside first and then removed and fitted into the drier chamber. The circulation device inside the drier chamber, no doubt, functioned like a blower/fan so far as the mechanical characteristics are concerned. But the device took shape inside the drier chamber only when the compo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le, as the decision of the Supreme Court is with reference to Section 11-A and not to Rule 9. That it was the responsibility of the appellant under SRP to file classification list correctly of all goods manufactured by them. (vi) 1984 (16) E.L.T. 148 (Tribunal) (vii) 1989 (40) E.L.T. 214 (S.C.) - M/s. Jaishri Engg. Co. (P) Ltd. v. Collector of Central Excise - The relevant para was para-10. The visit by the department was no reason for the appellant not to truly and properly describe the goods. (viii) 1989 (39) E.L.T. 113 (Tribunal) - Collector of Central Excise v. Wipro Information Technology Limited, para-5. The value of the Blower has been discussed by the Collector in Para-22 of the order, and the Ld. S.D.R. reiterated the Collector s findings. In reply to the appellants contention for application of Notification No. 95/79 dated 01-03-1979, the Ld. SDR referred to Para-25 of the Collector s order that procedure under Rule 56-A was not followed, and their claim for small scale exemption has been dealt with in Para-27 of the Collector s order that no declaration as envisaged under Condition (aa) was filed. 6. We have heard both the sides. It is seen that the appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escription under Heading 84.11 (C) is as follows: - 84.11 (C) - Fans and Blowers. - These machines while may be fitted with integral motors or not, are designed either for large volumes of air or gas at relatively low pressure or merely for creating a movement of the surrounding air .......Compressors, air pumps, fans, blowers, etc., specially constructed for use with other machines remain classified in this heading and not as spare parts of such other machines." Similar guidelines are given in the HSN under Chapter 84.14. Therefore, with decisions on the air-fan/blower being not similar, one has to go strictly on the merits. The parts that go into the manufacture of a blower on verification by the department are: Electric Motor, Motor Stand, Impeller, Blower Casing, Air-Cone, Aluminium Air Regulator with hydraulic rain, M.S. Sq. Ring and Roschin below, and the function of the Blower in an Oil Burner is to provide air for combustion of fuel. From the B.T.N. extract, page-1189 and 1190, it is seen that a Blower/Air-Fan designed for deliveries, large volumes of air or gas etc. etc. as elsewhere described here, thus consist of a propeller or blade type impeller revolving in a cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the department to arrive at the correct classification. 7. Coming now to the point of limitation, the extended period has been invoked under Section 11-A, and the appellants have been charged with suppression of facts. The Show Cause Notice is dated 28-01-1984 invoking the extended period for removal of goods from 1-8-1978 to 27-6-1983 and on 3-7-1980, 23-10-1980 and 14-11-1982, the appellants plead that classification lists were filed by them specially for boilers, burners, accessories, components and spares under T.I. 68 for the period 1980, 1981, 1982 and 1983 and have also filed declaration for the purpose of claiming exemption, where they have mentioned Blower Assemblies and they were duly approved by the excise officers. There was no suppression of facts and they are covered by the various decisions of the appellate courts and Supreme Court quoted supra. There is considerable force in their contention as classification lists have been filed by them mentioning boilers, burners, accessories, component parts and spares. While approving the classification list, the department is expected to study the process of manufacture and also dutiability of any product that comes i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onfiscation. Now that it has been held that no wilful suppression was involved, the 16 blowers in the finishing room and not cleared are only liable for payment of duty and not confiscation as no offence of clandestine removal is involved and, therefore, the confiscation and fine are set aside. The penalty of Rs. 50,000/- is not liable as no wilful suppression has been proved. The plea of the appellant of extending the exemption Notification No. 95/79 is not considered as the Collector has in his findings rightly pointed that the procedures for availment of such benefits have not been followed. In effect the appeal is allowed to the extent admissible as specified above but otherwise rejected. 10. In the Collector s Order-in-Original No. 13/MP/85 dated 27-6-1985 on the issue of classification of the air-blower and alleged possession of 16 blowers which have been confiscated, the Collector, has imposed a penalty of Rs. 1,000/- on Shirish Ranchhodlal Shah, Director of M/s. Nutherm Pvt. Ltd. In his appeal, Shri Shah has contended that no Show Cause Notice was issued to him, and for the alleged contravention of Rule 198 of the Central Excise Rules, no Show Cause Notice was issued and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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