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TMI Blog2002 (12) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... them. 2. Shri V. Lakshmikumaran, Learned Advocate, submitted that appellants manufacture various parts of car air-conditioner for supplies to Honda Siel Cars India Ltd.; that the parts manufactured by them are supplied in two sub-assemblies called A/C sub-assembly frame and A/C sub-assembly engine ; that M/s. Honda Siel procures other parts of car air-conditioner like heater assembly, heater valve, A/c control panel, blower assembly, duct assembly etc. from other manufacturers and fit the same along with the parts manufactured and supplied by the appellants in their vehicles; that they had classified the parts of A/C under Heading 84.15 of the Schedule to the Central Excise Tariff Act and availed of exemption from payment of Special E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir customer purchases other important and vital parts like blowers, heaters from other vendors to manufacture car air conditioner. 3. He relied upon the decision in the case of CCE v. Subrose Ltd. - 1989 (43) E.L.T. 543 (Tri.) wherein it has been held that goods are not being classified as air-conditioning machines under Heading 84.15 unless clubbed with motor driving fan or blower. Finally learned Advocate submitted that in view of the correspondence exchanged with the Department right from the beginning, no penalty is imposable on them. 4. Countering the arguments, Shri N.K. Bajpai, learned Advocate, submitted that it is apparent from form R-2 which is Registration Certificate under Rule 174 of the Central Excise Rules that the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred to for interpreting the notification; that the ratio of the decision in the case of Seagull Fabricators Pvt. Ltd. requires reconsideration. Finally, he submitted that the impugned products namely, A/C sub-assemble of engine and A/C sub-assembly frame are classifiable as air-conditioners in view of Note 4 to Section XVI of the Tariff. 5. In reply, the learned Advocate of the appellants mentioned that the show cause notice dated 4-4-2001 issued by the department clearly mentioned that the appellants are engaged in the manufacture of A/C sub-assemblies. It is nowhere mentioned in the show cause notice that these sub-assemblies are air-conditioners themselves; that in their letter dated 12-4-2000 addressed to the Range Superintendent, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for the same reason the decision in the case of Seagull Fabricators Pvt. Ltd. will also not apply to the present matter. In reply the learned Advocate for the appellants submitted that the basis for issuing the show cause notice was that unit/assembly and parts was not one and the same thing and reliance was placed on the definition of Parts in Para 7(28) of the EXIM Policy and of Assembly in McGraw Hill Dictionary; that show cause notice also referred to the Board s Circular regarding split air-conditioners and the charge was made that the benefit of notification would not be available to the sub-assembly for automobile air conditioner when cleared separately as the notification was available to Parts of air-conditioning machines . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xemption by relying upon the definition of the parts which is at variance with the generally understood Scheme of the Tariff or the HSN upon which the tariff is based. The Board has also taken note of the said decision in the Circular dated 25-9-2002 and has observed that this decision of the CEGAT has not been appealed against by the Government . The Board, further, after referring two decisions in the case of Universal Commercial Corporation v. Collector of Customs, Delhi, 1994 (69) E.L.T. 150 (Tri.) and Collector of Central Excise v. Subros Ltd. [1989 (43) E.L.T. 543 (T) = 1989 (24) ECR 219 (T)] has mentioned that the essential elements of air-conditioning machines would be the following :- (i) Evaporator (cooling) coil; (ii) Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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