9911796707
TMI Blog2006 (8) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... in their factory, were getting orders for the individual parts described on the purchase orders with delivery Schedules for individual entities given/determined by the customers. 1.4 The assessee had claimed exemption under Notification No. 22/2000- CE dated 6.3.2000 as available to parts of Air Conditioning Machines. They were issued a notice, seeking as to why the said exemption not be denied duty recovered under the proviso to Section 11A of the Act with penalty under Section 11AC along with interest under Section 11AB for the clearance, effected, during the period 7.3.2000 to 22.9.2001 on the grounds that the said clearances effected was to be classified as Complete Air-conditioning Machine by virtue of Rule 2 (a) Note 4 to Section XVI. As these were to be considered as complete Air Conditioning Machine the clearances were not entitled to the exemption under Notification 22/2000. The notice alleged suppression of facts with intent to evade payment of duty on the ground that the assessee misled the Department by deliberate use of unique terminology to describe the goods and deliberately not indicating on the classification declaration for the year 2000-2001 whether they we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. Following explains the position in this regards:- Nomenclature used by Telco/M M What it contains A) 'Kit fit on cab' (1) Climate Box Assembly a) Expansion Valve b) Blower c) Evaporator d) Duct Installation (2) Condenser Assembly e) Fan f) Condenser g) Receiver Drier (3) Control Panel Assembly h) Control Panel (4) Pipe Assembly i) Three pipes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a liquid, due to loss of heat. The pressure continues to be the same. This liquid refrigerant which is still under high pressure is transported to a receiver-driver where the refrigerant is dried and filtered. Thereafter, the dried and Filtered refrigerant in liquid condition and high pressure is transported to expansion valve. In the expansion valve, the pressure of the liquid refrigerant, received from Condenser, suddenly drops considerably. In the process the refrigerant loses heat and becomes cool. Thereafter, the liquid refrigerant enters evaporator. The Blower forces the air from inside of the cabin of car through evaporator. This air becomes cool, as the refrigerant inside the Evaporator absorbs the heat from the air blown from the cabin. Thus, refrigerant becomes warm or hot and air from the cabin becomes cool. The Liquid Refrigerant gets converted into gaseous form because of absorption of heat. This cool air is circulated to the interior of the car by means of duct and grills on the instrument panel. The control panel assembly helps in controlling the flow and direction of cool air inside the car. The above cycle continues and in the process the air in the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Rule 52A, it only indicates that the imported compressors were removed as such in terms of Rule 57F (3) as it stood prior to 1.4.2000 and under Rule 57AC (5), as it stood after 1.4.2000. Thus, throughout the period of dispute, the Appellants were only trading in compressors. At no point of time the Appellants were themselves manufacturing compressors. Therefore, the Appellants could not be said to be manufacturing 'Complete Air- Conditioning Machine' in unassembled condition, since the compressor which is the essential part is not being manufactured by the Appellants. If Compressor or Motor is not manufactured and cleared as such then the assessee will get the benefit of Board's Circular No. 666 /57/2002-CX. dt. 25.9.02 [reported in 2002 (52) RLTM111], wherein it is stipulated that if an assembly or a kit (even CKD or SKD) form) does not have all the six essential elements mentioned therein, then the clearances cannot be considered to be of an entity which can be said to have acquired the essential characteristic of an Air-Conditioning Machine will have to be classified as parts. From. the chart extracted herein above it is seen that there is no Motor contained in the entities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a part of an Automobile Air Conditioning System the system functions on the Car Motor by a belt Drive. On perusal, it could be concluded that an Air Condition Machine with its own Motor never comes to an existence in an Automobile therefore by application of. Board's instructions dt. 25.9.02 (supra) No duty as an Air- Condition Machine would be called for on the entity in this case. Duty as parts has been discharged No short payments can thus be arrived. 2.6 Before we part with the case, we also find that the reliance of the appellants an Board's Circular No. 475/45/05-CX. dated 17.08.99 para 2 thereof, wherein the Board has assessed, after examination of representation — — — "2….. Though by virtue of such fitments an ordinary but at no point of time as car air conditioner as a separate and distinct can modity comes into existence...." This observation has been arrived by the Board after examining the issue when doubts were expressed on activity of conversion air conditioning a car, would lead to the only conclusion that no duty, on an "Air Conditioning Machine" can be upheld, since no such entity comes into existence. The DR's plea that this clarification would be app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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