9911796707
TMI Blog1992 (1) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... alt Act. 2. The respondent-company is registered under the provisions of the Companies Act and is engaged in manufacture of air-conditioners and water coolers and has a factory at Thane. Some of the essential parts of air-conditioners and water coolers are impellers (alternatively called blowers), motors and propellers. The company purchased the said parts from different suppliers and then these parts and other parts are assembled to bring into existence the end products like air-conditioners and water coolers. The function of the propeller on the condenser side is to take the outside air from the atmosphere and force it through the condenser back into the atmosphere. By this process, the refrigerant gas is condensed. The blower on the ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch 29,1972 pointing out that the company does not manufacture fans falling under Tariff Item No. 33. The company pointed out that blower wheels of fans are obtained from the market and are used for assembly of air-conditioners and water coolers and on such assembly, the blower wheels lose their identity. The Superintendent, Central Excise, by order dated July 28, 1972 informed the company that the manufacture of industrial fans (blowers) attracts duty under Tariff Item No. 33(2) and the company should obtain L-4 licence and pay duty. 4. The company challenged the order of the Superintendent, Central Excise, by filing an appeal before the Appellate Collector of Central Excise and the appeal was allowed by order dated November 22, 1974. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cturally, the impeller motor assembly used by the company in air-conditioners and water coolers are appropriately classifiable as electric fans and chargeable to duty under sub-item (3) of Tariff Item No. 33. To arrive at this conclusion, the Government relied upon the definition in Chapter 84.11 of the Brussels Tariff Nomenclature. The Government felt that the term "electric fans" would signify that it should (a) perform the function of an electric fan and (b) work through electricity and as these two requirements are satisfied, the company is liable to pay duty. 5. The decision recorded by the Government was challenged by the company by filing Writ Petition No. 261 of 1981 and the learned single Judge by the impugned judgment set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision in Atul Glass v. Collector, reported in 1986 (25) E.L.T. 473. Mr. Desai is right in his submission that the definition either in Chapter 84.11 or Chapter 84.12 of the Brussels Tariff Nomenclature cannot determine the issue as to the liability of the company to pay the duty. The difficulty in the way of Mr. Desai is that the Government while exercising power under Section 36(2) of the Act has merely relied upon the definition in Chapter 84.11 of the Brussels Tariff Nomenclature. The learned single Judge was right in observing that the Government misread the definition in the Nomenclature. The definition clearly sets out that the heading fans and blowers excludes fans and blowers fitted with elements additional to their motors or housin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d into air-conditioners are quite different from the electric fans. These findings of fact recorded by the Appellate Collector are not disturbed by the Central Government while reviewing the decision. In addition to this aspect, the company claimed that motor and impeller assembly is not known as fans in commercial parlance and even that assertion was not controverted by the Central Government. The claim of the company that the motors and impellers form integral components of air-conditioners and water coolers is also not challenged. In these circumstances, it is difficult to appreciate on what basis the Government could have disturbed the order of the Appellate Collector. In our judgment, the Government was clearly in error in setting at n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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