Regent Electronics Pvt. Ltd. Vs. Collector of Customs - Court Judgment

Excerpt:
1. these two appeals are directed against common order-in-appeal no.3077/88-bch of collector of customs (appeals), bombay. since by common order-in-appeal, collector (appeals) disposed of two appeals, the appellants were asked to file supplementary appeal which they have now filed alongwith application for condonation of delay. considering the fact that this is only the supplementary appeal in regard to issue when appeal has already been filed, we condqne the delay and take up the supplementary appeal alongwith appeal originally filed.2. the appellants imported electromagnetic clutches and hose assemblies. electromagnetic clutches were assessed under customs tariff heading 85.02(1) for basic excise duty and under tariff item 68 for cvd. the appellants claimed cvd under central excise tariff item 29a(e) as parts of refrigerating and air-conditioning equipment, and in consequence, claimed also exemption under notification no. 80/62-c.e., dated 24-4-1962.2a. arguing for the appellants, the id. managing director appearing in person submits that electromagnetic clutches are specific parts of compressors and in support of this contention draws our attention to catalogue presented in the court. he submits that tariff item 68 is a residuary item. he cites the case of dunlop india ltd. & madras rubber factory ltd. v. union of india and ors. as reported in 1983 (13) e.l.t.1566 (s.c.).3. arguing for the revenue, id. dr submits that the goods admittedly are parts of air-conditioning and refrigerating equipment but even when they are classifiable under tariff item 29a(3) of central excise tariff, they would not be eligible to exemption under notification no.80/62, since compressors are excluded from the purview of the notification.4. we have heard both sides. tariff item 29a(3) of tariff under subheading (3) refers to "parts of refrigerating and air-conditioning appliances and machineries". the catalogue of sankyo of international relating to sif compressors service manual at page 19 indicates electromagnetic clutches as a part of compressor. notification no.80/62, dated 24-4-1962 exempts all parts of refrigerating and air-conditioning appliances and machinery falling under item no. 29a of the first schedule to the central excises and salt act, 1944 from the whole of duty of excise leviable thereon except those parts which have been specified in the notification itself. compressor admittedly is one such part which is excluded from the purview of this notification.5. the impugned goods admittedly are not compressors by themselves but parts of compressors. what is excluded is compressor, not the parts of the compressors. electromagnetic clutch can be treated as part of air-conditioning and refrigerating equipment but that would not by itself make it a compressor. looked at from other angle if even the parts of those parts mentioned in the notification are excluded the notification would be rendered meaningless. in view of this, we hold that the impugned goods are parts of air-conditioning and refrigerating equipment classifiable under the erstwhile tariff item 29a(3) and would be eligible to exemption under notification no. 80/62.6. since electromagnetic clutches are specific parts of compressors, they would not fall under residuary item like 68. it has held by the apex court in the case of dunlop india ltd. & madras rubber factory ltd. in 1983 (13) e.l.t.1566 that when an article is by all standards classifiable under a specific item in the tariff schedule it would be against the very principle of classification to deny it that percentage and consigne it to a residuary item.7. in the result, we allow the appeals and set aside the impugned order.

Judgment:
1. These two appeals are directed against common Order-in-Appeal No.3077/88-BCH of Collector of Customs (Appeals), Bombay. Since by common order-in-appeal, Collector (Appeals) disposed of two appeals, the appellants were asked to file supplementary appeal which they have now filed alongwith application for condonation of delay. Considering the fact that this is only the supplementary appeal in regard to issue when appeal has already been filed, we condqne the delay and take up the supplementary appeal alongwith appeal originally filed.

2. The appellants imported Electromagnetic Clutches and Hose Assemblies. Electromagnetic clutches were assessed under Customs Tariff Heading 85.02(1) for Basic Excise Duty and under Tariff Item 68 for CVD. The appellants claimed CVD under Central Excise Tariff Item 29A(E) as parts of refrigerating and air-conditioning equipment, and in consequence, claimed also exemption under Notification No. 80/62-C.E., dated 24-4-1962.

2A. Arguing for the appellants, the Id. Managing Director appearing in person submits that Electromagnetic Clutches are specific parts of compressors and in support of this contention draws our attention to catalogue presented in the Court. He submits that Tariff Item 68 is a residuary item. He cites the case of Dunlop India Ltd. & Madras Rubber Factory Ltd. v. Union of India and Ors. as reported in 1983 (13) E.L.T.1566 (S.C.).

3. Arguing for the Revenue, Id. DR submits that the goods admittedly are parts of air-conditioning and refrigerating equipment but even when they are classifiable under Tariff Item 29A(3) of Central Excise Tariff, they would not be eligible to exemption under Notification No.80/62, since compressors are excluded from the purview of the notification.

4. We have heard both sides. Tariff Item 29A(3) of Tariff under subheading (3) refers to "Parts of refrigerating and air-conditioning appliances and machineries". The catalogue of Sankyo of International relating to SIF Compressors Service Manual at Page 19 indicates Electromagnetic clutches as a part of compressor. Notification No.80/62, dated 24-4-1962 exempts all parts of refrigerating and air-conditioning appliances and machinery falling under Item No. 29A of the First Schedule to the Central Excises and Salt Act, 1944 from the whole of duty of excise leviable thereon except those parts which have been specified in the notification itself. Compressor admittedly is one such part which is excluded from the purview of this notification.

5. The impugned goods admittedly are not compressors by themselves but parts of compressors. What is excluded is compressor, not the parts of the compressors. Electromagnetic Clutch can be treated as part of air-conditioning and refrigerating equipment but that would not by itself make it a compressor. Looked at from other angle if even the parts of those parts mentioned in the notification are excluded the notification would be rendered meaningless. In view of this, we hold that the impugned goods are parts of air-conditioning and refrigerating equipment classifiable under the erstwhile Tariff Item 29A(3) and would be eligible to exemption under Notification No. 80/62.

6. Since Electromagnetic Clutches are specific parts of compressors, they would not fall under residuary item like 68. It has held by the Apex Court in the case of Dunlop India Ltd. & Madras Rubber Factory Ltd. in 1983 (13) E.L.T.1566 that when an article is by all standards classifiable under a specific item in the Tariff Schedule it would be against the very principle of classification to deny it that percentage and consigne it to a residuary item.

7. In the result, we allow the appeals and set aside the impugned order.