Full Judgment
2. The respondents are manufacturer of the product, Sunflame Electric Coil Stove, falling under sub-heading 8516.00 of the CETA. They had claimed the benefit under Notification No. 160/86 on the ground that the same are covered by its residuary entry 5(d) under the caption (domestic electrical appliance) which provides nil rate of duty. In their classification list also they accordingly claimed duty exemption on that ground.
3. On the other hand, the stand taken up by the Revenue is that the product, 'electric coil stove' is covered by S. No. 5(a)(x) of the Table annexed to Notification No. 160/86-C.E., dated 1-3-1986 and attracts 20% BED + 15% SED as mentioned therein.
4. The Assistant Collector rejected the contention of the appellants by holding that the product is covered by S. No. 5(a)(x) and not 5(d) of the Table annexed to the Notification referred to above. He confirmed the duty demand of Rs. 89711.50 on the appellants for having cleared the products during the period 10/92 to 1/93 without payment of duty, through order-in-original dated 7-6-1993. This order was questioned in appeal by the respondents before the Collector of Central Excise (Appeals) who reversed the same by holding that the product is covered by S. No. 5(d) of the Table annexed to the Notification No.160/86-C.E., dated 1-3-1986 and quashed the demand confirmed against them by the Assistant Collector through the order-in-original.
7. Since the dispute relates to the duty liability of the product which is being manufactured and cleared respondents by describing as 'electrical coil stove' without payment of duty in terms of Notification No. 160/86-CE., dated 1-3-1986, it would be beneficial to refer to the relevant serial numbers of the Table annexed to this Notification in order to decide whether this product attracts nil rate of duty by falling under S. No. 5(d) or is liable to duty under 5(a)(x) of the Table annexed to the Notification. The S. No. 5(a)(x) of the Table annexed to the Notification under which according to the Revenue the product falls reads as under :- "Hot plates, grillers, boiling plates, plate warmers, food warming trays, food warming trollies, hot food cabinets.
S. No. 5(d) of the Table annexed to Notification 16/86-C.E. on which the respondents have relied upon, reads as under :- The plea taken up by the respondents is that their product known as "electrical coiled stove" is not covered by any of the items /products mentioned in S. No. 5(a)(x) of the Table referred to above and as such they are not liable to pay duty at 20% ad valorem rate, as specified therein. But the stand taken up by the Revenue is that the so-called product, electric coil stove of the respondents is squarely covered by S. No. 5(a)(x) of the Table annexed to the Notification and as such they are liable to discharge the duty liability on the rates specified in the Notification for the period in question. The plea of the Revenue, in our view, is liable to be accepted. The product claimed to be 'electric coil stove' by the respondents is in fact nothing but a heating element which can be equated with a 'hot plate' in every respect. In a case of hot plate the heating coils are normally covered with a metal while in the so-called electric coil stove, coils had been embedded in tabular sheets from all sides while in the middle these had been kept open, by the respondents. The function and utility of the electric coil stove is the same as that of hot plate. The respondents had given it a different name than the hot plate with the sole object of taking it out of the ambit of S. No. 5(a)(x) of the Table annexed to the Notification in question in order to evade payment of duty, at the rate mentioned against that serial number and to claim nil rate of duty by bringing it under S. No. 5(d) of that Table. But legally they can be permitted to do so. By giving a different name to the product, i.e.
'electric coil stove' which is nothing but a hot plate having common characteristics with that plate, the same cannot be taken out of the ambit of S. No. 5(a)(x) of the Table annexed to the Notification.
8. The Assistant Collector through the order-in-original, classified the product under S. No. 5(a)(x) of the Table annexed to the notification in question referred to above, being not a different item, but a hot plate. The observations of the Collector (Appeals) in the impugned order that the product does not appear to fall under this serial number, while reversing the order-in-original of the Assistant Collector, are devoid of any logic and as such cannot be accepted. He has not recorded any cogent reasons in support of his observations but simply stated that it was explained to him that the heating element whether sheathed or otherwise retains essential characteristics of the elements and functions only as a heating element. He, for that reason, has taken the view that the product, electric coil stove did not fall under S. No. 5(a)(x) of the Table annexed to the Notification and was rather classifiable under S. No. 5(d) of that Table which provides nil rate of duty under the caption "other domestic appliances".CCE v. Supreme Electrical Industries Bontex Electricals, 1997 (23) RLT 667 (T) referred by the learned Counsel for the respondents, the question involved was as to whether the electrical coil stove was entitled to the benefit of the Notification 33/69-C.E., dated 1-3-1969 and the Tribunal and allowed the benefit to the product by observing that it was not a hot plate. But we are unable to subscribe to this view of the Bench of the Tribunal and doubt its correctness. In our view, as observed above, the electric coil stove is nothing but a hot plate. Giving this product a new name than a hot plate with the sole object of evading the payment of duty, in our view, did not take out the product from the ambit of S. No. 5(a)(x) of the Table annexed to Notification in question and as such is to be subjected to duty.
10. Since the contrary view had been taken by another Bench of coordinate jurisdiction of the Tribunal in the above referred case, it would be in the interest of justice to refer the matter to the Larger Bench in order to decide the issue authoritatively. Therefore, the papers be placed before the Honourable President for constituting a Larger Bench in order to decide the issue "as to whether the so-called electric coil stove" of the respondents falls within the ambit of S.No. 5(a)(x) or 5(d) of the Table annexed to Notification No.160/86-C.E., dated 1-3-1986 for the purposes of payment of excise duty.