Full Judgment
(i) The refrigerator tops manufactured by M/s. Yanar Paks are specifically designed which can be readily fitted in the refrigerators.
(ii) The assessee has himself described their goods in the classification list as 'Refrigerator Tops' and the goods are correctly identifiable as such.
(iii) Note 1(e) of Chapter 94 of Central Excise Tariff Act, 1985 read with explanatory notes to sub-heading No. 94.03 vide 6(h) page Nos. 1578 and 1579 of Harmonised Commodity Description and Coding System clearly excludes 'Furniture specially designed as parts of apparatus of Heading No. 84.18'. Therefore, the refrigerator tops which are given a proper shape and design can be treated as a component part of refrigerator and are correctly classifiable under Chapter Heading No. 8418.00 of Central Excise Tariff Act, 1985 but not under Chapter 44 or 94 of Central Excise Tariff Act, 1985, as held by the Commissioner (Appeals), Hyderabad.
3. The learned JDR, for the department reiterated on the grounds of appeal. The plea of the revenue is that since the table tops have been cut to size for fitment into the refrigerator tops, the same should be treated as part of the refrigerators. It has been urged that by virtue of Chapter Notes to Chapter 84 and also under the HSN the items of furniture which are designed for the refrigerator could be classifiable under Tariff Heading 84.18. In this connection reliance has been placed on Chapter Note 1(c) to Chapter 94 under which the items which are not covered under Chapter 94 are set out.
4. The learned Representative of the respondents has pleaded that the refrigerator top has no role to play in the refrigeration and has supported the order of the lower appellate authority who has on merits held as under in Para 5 after discussing the reasonings of the learned lower authority in Para 4. Paras 4 & 5 of the learned lower appellate authority are reproduced below for convenience of reference: "4. The Assistant Commissioner's argument is that Chapter note to Chapter 94 of the Central Excise Tariff Note, clarifies that the furnitures specially designed as parts of refrigerating equipment fall under Chapter Heading 84.18. It is further contended by the Assistant Commissioner that parts of refrigerating equipment are classified under Chapter 84.18 which includes cabinets, counters and other parts of refrigerating equipment not yet fitted with a complete refrigerating unit but clearly designed to receive such equipment. Explanatory Note to Chapter Heading 94.03 of the HSN where other furniture and parts thereby are described says, I quote : "Refrigerators, Ice-cream machine etc. (i.e. cabinets etc. having the character of funiture, but also equipped either with a refrigerating unit or with an evaporator of a refrigerating unit or designed to receive such equipment) (Heading 84.18). However, ice-boxes, ice-chest and the like and also insulated cabinets not equipped or designed to contain an active refrigerating element but insulated simply by glass, fibre, cork, wool etc. remain classified in this heading". A reading of this explanation at (H) on Page 1579 of the Explanatory Note suggests that it is not enough that if the goods have the character of furniture, but they should also be equipped either with a refrigerating unit or with an evaporator of a refrigerating unit or designed to receive such equipment are classifiable under Heading 84.18. A refrigerator top is nothing but a plank which is cut to size so that it can be fitted on top of a refrigerator. Normally, refrigerators are not equipped with such tops. It is an additional feature for which a separate charge is also made. The top which is fixed on a refrigerator can be fixed on any other equipment such as an air-cooler or any other gadget that can be placed in a room. Assistant Commissioner appears to be classifying the goods as parts of refrigerator simply because the top is fixed on a refrigerator. If it is fixed on an air-cooler, then, according to the Assistant Commissioner, it could go as a part of an air-cooler. Thus, the Assistant Commissioner seems to hold that the end use of a product determines its classification. Such a concept is not accepted unless it is specifically provided in the Schedule itself.
5. A refrigerator top is not designed to receive a refrigerator.
Moreover, a table top can at best be a part of a furniture but not furniture itself. The Explanatory Note clearly speaks of a furniture and not a part of a furniture. A table top is only a part of furniture. A refrigerator top which is nothing but a plank of wood cut to size can at best be a part of a furniture but cannot, by any stretch of imagination, be a part of a refrigerator. The explanatory note further clarifies that insulated cabinets not equipped or designed to contain an active refrigerating element the insulated simply by glass, fibre, cork, wool etc. remains classified under Chapter Heading 94.03. Thus, it is clear that not all cabinets can be called a part of refrigerator unless it has some very specific furniture to receive a refrigerator. This is further clarified by the fact that a sewing machine table, even when it is used as an ordinary table when the machine is not in use, is a part of a sewing machine. On pain of repetition, I may point out that a refrigerator top does not receive a refrigerator in it. I, therefore, hold that a refrigertor top cannot be classified under Chapter Heading 84.18." 5. We have considered the pleas made by both the sides. We observe that the department itself had earlier classified the goods under Chapter Heading 44.06. However, after they had second thoughts, sought to change the classification under Tariff Heading 84.18. Reliance in this connection has been placed by the revenue on the Chapter Notes under Chapter 94 in the HSN and in the Central Excise Tariff. Under Chapter 94, by Chapter Note 1(e), Furniture specially designed as parts of refrigerators of Heading No. 84.18, is excluded from the purview of Chapter 94, which covers within its scope furniture. Likewise, reliance is placed in Chapter Note 1(g), whereunder, it has been stated that Furniture specially designed as parts of apparatus of Heading No. 85.18 are excluded from the purview of the Chapter Heading 94 under which furniture is covered.
6. The learned lower authority has, however, taken into consideration the scope of items of furniture as would be excluded from the purview of the term funiture and would be covered under Tariff Heading 84.18.
He has gone by the explanatory notes under Chapter 94, under Heading 94.03. In that Heading under Sl. No. (h), the following is set out: (h) Refrigerators, ice-cream machines, etc. (i.e. Cabinets, etc., having the character of furniture but also equipped either with a refrigerating unit or with an evaporator of a refrigerating unit, or designed to receive such equipment) (Heading 84.18) [see Note (1)(e) to this Chapter]. However, ice-boxes, ice-chests and the like, and also insulated cabinets not equipped or designed to contain an active refrigerating element but insulated simply by glass fibre, cork, wool etc., remain classified in this heading.
7. What, therefore, has to be seen is whether the item in question i.e.
the refrigerator top, answers to the description of the excluded items.
The table top does not qualify as a complete item of furniture, much less of a type which is covered under the excluded clause. It also does not qualify as a part of the cabinet, as a cabinet can be taken to be complete even without a table top. The Central Excise Tariff is designed on the scheme of the HSN and to understand the scope of the various Tariff entries under this. The Hon'ble Supreme Court has held that a resort can be had to the explanatory notes in the HSN under various sections and Chapter headings. In this connection, the judgment of the Hon'ble Supreme Court in the case of Wood Craft Products Ltd. v.C.C.E., 8. In the present case, the item has to be assessed on its own terms, which is because it is used on the top of the refrigerator; and it does not by itself make it an item which can be treated as a part of the refrigerator. The table top has no role to play in the refrigeration.
As per the HSN Notes, only such of those items like cabinets which have a refrigerating unit or an evaporator in it or are designed to make this equipment are excluded from the category of furniture under 94.03.
It is seen from the same note as above that the items of ice-boxes, ice-chest including insulated cabinets which are not equipped or designed to contain an active refrigerating element, they continue to be classified under item of furniture under 94.03. The key for including the item from the purview of the furniture and treating as part of the equipment of refrigeration is that the same should be designed to receive the refrigeration or evaporation unit.
9. The table top, therefore, obviously for the reasons stated by us above, cannot be treated even as a par of such equipment that the item is made up of particle board, is not in dispute. The question, therefore, would be under which Tariff Heading under 44 this will fall.
The scheme of Chapter 44 shows that there are two Tariff Headings under which the item can be considered to fall i.e. 4406.90 or 4410. (Tariff Heading) 4410 deals with articles of wood not elsewhere specified. And in terms of Chapter Note 5, Heading 4410 would apply also to articles of particle board or similar board. The table top is an article and 44.06 as per the corresponding entry in the HSN also covers corrugated, perforated cut to form shapes other than square or rectangular, provided it does not give them the character of articles of other headings. In the Central Excise Tariff, 44.10 covers articles of wood not elsewhere specified. There is a case for consideration for assessment of the goods under 44.10, taking into consideration that the woods produced are furniture article, and the scope of Tariff Heading 44.06 as per the corressponding entry in the HSN in 44.10 which excluded these articles which are rectangular or square. However, the respondents are not in appeal against the classification order of the learned Collector (Appeals) holding that the goods will be classified under Chapters 44 and 94 of the CTA.10. We observe that the learned lower authority has not indicated under which sub-heading the items would fall. It is incumbent on the learned lower authority on the correct sub-heading also, when there is a dispute regarding classification. This not having been done, while we hold that classification under Tariff Heading 84.18 is not sustainable, the learned lower authority's order not indicating the sub-heading under which the goods are to be classified is also not proper. We remand the matter to the learned lower appellate authority for passing appropriate orders in this regard.
11. While coming to the conclusion, we have taken note of the Chapter Notes under Chapter 84.18, where under absorption type refrigerator, cabinets or other furniture or appliances incorporating a complete refrigerating unit alone are covered under that heading.