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TMI Blog2003 (10) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... hority at the time of passing the impugned order, the matter has to go back to him for verifying whether all the parts specified in the circular are supplied by the appellants. If they supply all these components, the same will be considered to have the essential characterstics of the complete air-conditioning machine and will be classified as such otherwise these will be classified as parts only. Before parting with the matters, we hold that the penalty, u/s 11AC of the Central Excise Act is not imposable on the Appellant Company as the issue involved is one of interpretation and application of Rule 2(a) of Interpretative Rules. Further, for the same reason, no penalty is imposable on Sh. Dinesh Chabbra under Rule 209A of the Central Excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that they were supplying parts as under : (i) For Matiz Car - Compressor, condenser, cooling unit, heating unit and evaporator. (ii) For Ceilo Car - Compressor, Condenser, Receiver drier/acumula-tor air inlet/blower, cooling unit, heating unit and evaporator. (iii) For Opel Astra - Compressor, Condenser and evaporator alongwith office Tube/TXV. He emphasised that for the manufacture of air-conditioner, there are several other parts which are required, which are around 17 in number, which are not supplied by them; that without the supply of these parts, it cannot be said that the machine acquires essential character of air-conditioning machine. He relied upon Central Board of Excise & Customs Circular No. 666/57/2002-CX., dated 25-9- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng supplied and according to Board's Circular, the assembly supplied by the assessee will be clarified as parts. Reliance has also been placed on the decision in the case of Seagull Fabricators Pvt. Ltd. v. C.C.E., 2001 (127) E.L.T. 186 (T). The learned Advocate also mentioned that the appellants do not clear all the parts together under one invoice; that condenser and BAI (Blower Air Inlet) are supplied to M/s. General Motors India Ltd. from their trading warehouse and HEA (heater evaporator assembly) to M/s. Daewoo Motors is supplied from the warehouse; that the Department has also not taken the value of these components into consideration for demanding the Central Excise duty; that the clearance of some parts from the trading warehouse h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise Act is not imposable; that even otherwise, Proviso to Section 11A is not attracted inasmuch as goods were duly declared in the declaration filed by them under Rule 173B of the Central Excise Rules and in the invoice; that as such there was no suppression; that moreover, the Range Superintendent, under letter dated 15-2-2001, has treated the clearance of the goods effected by them as parts of air conditioner as he demanded Special Excise duty on air-conditioner parts cleared before 6-3-2000; that no penalty under Rule 209A of the Central Excise Rules, 1944 is imposable on Shri Dinesh Chabbra, Chief Financial Officer of the Appellant Company as he had been made authorised signatory for excise matters only with effect from Febru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ajor assemblies from their factory and from their trading warehouses; that these assemblies put together with some minor parts have the essential character of car air conditioning machine; that thus Rule 2(a) of the Interpretative Rules is squarely applicable in these matters. He also contended that the impugned goods cannot be treated as parts in view of the definition of parts in para 7.8 of EXIM Policy according to which part is an element of sub-assembly or assembly not normally useful by itself and not amenable for further disassembly; that the goods manufactured by the appellants are assemblies which contain a number of components/parts and they can perform their function when fitted with other parts/assemblies and are amenable to fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of both the sides. The Board, after referring to two decisions in the case of Universal Commercial Corporation v. C.C., Delhi, 1994 (69) E.L.T. 150 (T) and C.C.E., v. Subros Ltd., 1989 (43) E.L.T. 543 (T) has clarified, in Circular No. 666/57/2002-CX., dated 25-9-2002, that the essential elements of an air-conditioning machine would be the following : (i) Evaporator (cooling) coil, (ii) Condenser Coil, (iii) Motor, (iv) Fan or blower for circulating the air, (v) Compressor, and (vi) Capillary line (Expansion valve) 9.2The circular, further, clarifies that "if an assembly or a kit (even in CKD or SKD form) does not have all the above components, it will not be considered to have the essential characteristics of an air-conditioning ..... X X X X Extracts X X X X X X X X Extracts X X X X
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