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TMI Blog2001 (10) TMI 607X X X X Extracts X X X X X X X X Extracts X X X X ..... - DAI as parts of the Air Conditioner under Chapter Heading 84.15 of the Central Excise Tariff Act. Both the items had been classified under Chapter Heading 84.08 as parts of the Motor Vehicles before and after issue of the show cause notice, however the said classification is now revised as part of Air-conditioner assembly under Chapter Heading 84.15 and demands raised for short levy only for the period June 99 to November 99 for Duct Assembly Air Intake and May 99 to October 99 for HBA for total amount of Rs. 8,82,218/-. 2. We have heard Shri Aravind Dattar, ld. Sr. Advocate for the appellants and Shri Sree Kumar Menon, ld. SDR for the Revenue. 3. At the outset the ld. Sr. Counsel pointed out that in the Stay Order No. 393 and 394/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fan and elements for changing the temperature and humidity, including those machines in which the humidity cannot be separately regulated. The ld. Senior Advocate took us through the chapter note of Central Excise Act and Explanatory Notes of HSN. Technical evidence and appellants various pleas to demonstrate that the item in question is parts of Motor Vehicles as vehicles even without any air condition machines require these items and it performs the function of conducting air cool air or hot air and has no occasion as such with Air conditioning machine. He, further pointed out that the issue has got recurring liability and the appellants are faced with serious financial hardship inasmuch as that they have suffered loss of Rs. 79 crores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not in a fan and pointed out to Page 1123 of the HSN to show that if hot air temperature is used to expel the heat of the engine then it comes under specific Section XVII as Parts of Motor Vehicles . 4. The ld. Counsel places before us the Book Automotive Heating and Air Conditioning , a manual by Haynes Techbook. He specifically refers to various chapters in this book and pleads that the item cannot be treated as Parts of Air Conditioner . The items are fitted in between Dash Board and Engine and there is no connection with the air conditioning machine. Earlier classification list was approved as parts of Motor Vehicles after due consideration of its function and after examining the technical literature. However, the show cause no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l proceeds on the basis of the item being an air conditioner. Ld. Sr. Counsel submitted that the finding is solely on presumption. He submits that the re-classification adopted is not in terms of the principles laid down in the above noted citations. He pointed out that even in terms of HSN explanatory note the item cannot be treated as parts of air conditioner and the explanation at pages 1122-1123 of HSN clearly lays down that the item is to be treated as parts of Motor Vehicles as per the explanation and that if the hot air temperature is used to expel heat of the engine then the item would come under Section XVII (parts of Motor Vehicles). He pointed out that there is total non-application of mind by both the authorities and hence t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the same is utilised even for non AC cars. They have produced the extracts of Technical Book before us. We have perused the impugned order and find that the Assistant Commissioner has proceeded on his own understanding as can be seen from the Paras 1, 2 and 6 of the impugned order in original. It is now well settled that for the purpose of classifying the item the function of the item is required to first considered. The technical literature cannot be ignored besides the opinion of the technical experts. The entire classification has to be proceeded on the basis of the technical literature and the function of the item. The authorities should also apply the section notes and chapter notes and rules of interpretation. On our careful consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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