Judgment:
1. The appellants, M/s. K.R. Enterprises, did not appear at the hearing. We, therefore, heard the SDR on behalf of the department.
2. In their appeal M/s. K.R. Enterprises say that the Collector (Appeals) order No. 49/CE/DLH/84 dated 28th February, 1984 was not correct and he was wrong to hold the thermoelectric chillers as assessable under Item 29A of the Central Excise Tariff. They say in their appeal that these food preservers have limited cooling capacity and cannot form ice. They had given a practical demonstration of the foods preserver before the senior officers of the Central Excise. The term refrigerator and refrigerating appliances had not been defined under Item 29A and even according to BTN Heading 84.15 and also IS : 3615 : 1967. Glossary to terms used in refrigeration and air conditioning their products do not all in the category of the refrigeration and refrigerating appliances. The Collector has not discussed the authority relied upon by the appellants.
3. The food preservers to be manufactured by the appellants have a limited cooling capacity and do not reduce the temperature to O C or less. According to the BTN Heading, there are two types of refrigerator (i) compression type of refrigerator, and (ii) absorption type of refrigerators their product is covered by neither of these two types.
4. In IS : 3615 :1967 direct method refrigeration is defined as a system in which the evaporator is in direct contact with the material or space refrigerated or is located in air circulating passages communicating with such spaces. Indirect method of refrigeration is defined as a system in which liquid such as brine water, cooled by the refrigerant, is circulated to the material or space refrigerated or is used to cool air so circulated.
5. Their products do not work on these principles. They are thermoelectric chiller, they only chill and do not refrigerate.
According to the IS glossary to chill means to reduce temperature of a substance without reaching freezing point, and this is exactly what their products do. They are not known as refrigerator or refrigerating appliances in countries in which they are at present produced, but are commercially known as thermoelectric food preserver or solid state cooling device; nor are they known as refrigerators in India. The cooling devices run on the peltier effect and not on the conventional refrigeration principle. They have limited cooling capacity for food presevation. They can also act as food warmer by simply reversing the circuit with the help of a switch. The cooling device has no components like cooling coil, compressor, condenser and starting relay control.
According to trade notice issued by the Chandigarh, Baroda, Pune and Madras collectorates humidifiers and dehumidifiers which do not have cooling coils, evaporators, compressors, condensers, starting relay control, would not be classified under Tariff Item 29A of Central Excise. Their product does not have these components.
6. The learned counsel for the department, however, said that the products of the appellants are meant to reduce the temperature and to cool bottles and they could also act as food preserver by cooling or chilling them. Therefore, they are assessable under 29A which covers many things like water coolers etc. etc.
7. We are in agreement that this peltier effect food preserver does exactly the same thing in this cooling device that the system in the conventional system does. And it should be remembered that the aim of both is the transference and elimination of heat from a confined space, namely, the box-like body of the device in which substances to be cooled, chilled, preserved are kept. While the conventional refrigerator which has cooling coils, compressors, condensers and a circulating refrigerant, does it by means of the refrigerant reaching boiling point inside the enclosed space of the refrigerator and in doing so draws upon the heat available inside the enclosed space to achieve this boiling, and the heated refrigerant in a gaseous form carrying it away outside the enclosed space to reject it in the atmosphere, the solid state cooling device does the very same thing, but by means different from those employed by the conventional refrigerator. The cooling device using the peltier effect, pumps heat out of the enclosed space into a heat sink from where the heat is distracted by a fan. Certainly it is different in its working from a refrigerator or refrigerating appliances, but it does the same thing by employing a different method. The peltier cooling device does not have a freezer and cannot achieve temperature below freezing point, but it is difficult to see why this should exclude it from the category of a refrigeration appliance assessable under Tariff Item 29A. After all cooling and chilling within limited ranges can still achieve the purpose of preserving food and similar function. Even the refrigerator is not all freezer: the whole space does not reach freezing point. It is only in the freezer that the lowest temperature is reached, only because the coils carrying refrigerant are concentrated here and it is here that the refrigerating reaches boiling point. It is a misunderstanding that a refrigerating appliance must be able to make ice or must have a circulating refrigerant, compressor, coils etc. etc.
The machine that achieves the purpose of chilling or cooling must be classed as a refrigerating appliance even if its construction is entirely different from the refrigerator we are familiar with.
Technology does not stand still and new discoveries are coming into use. It is reasonable to assess all cooling machines that bring about refrigeration or chilling like the present food preservers under Item 29A, Central Excise Tariff.