Commissioner of C. Ex. Vs. Hind High Vacuum Co. Pvt. Ltd. - Court Judgment

Excerpt:
1. this is a revenue appeal against order-in-appeal no. 153/89(b), dated 20-7-1989 upholding the contention of the assessee for classification of the item "refrigeration system to cool the chevron baffle" (accessories for vacuum coating unit model 1526) under sub-heading 8485.90 of central excise tariff act as "machinery part not containing electrical connectors, insulators, coils, contacts or other electrical fixtures not specified or included elsewhere in chapter 84".the claim of the revenue is that the item is required to be classified 'under sub-heading 8418.00 which reads "refrigerators, freezers and other refrigerating or freezing equipment, electric or other; heat pumps other than air-conditioning machines of ^ heading no. 84.14".2. the assessee had contended before the commissioner that as per the contract entered into by them with the director, solid state physics laboratory (ministry of defence), they were to supply refrigeration system to cool the chevron baffle and accordingly the classification list was filed with the same nomenclature that the same is an optional accessory for vacuum coating unit classified under sub-heading 8479.00 and that it has no independent function of its own. in the technical note submitted by them, it had been explained that the cooling system is totally dedicated to the baffle and is designed with the purpose of direct expansion into the baffle wall; that it does not have any other use by itself other than for cooling of the chevron baffles. they had summed-up that they mainly adopted the description given by the buyer and to the best of their knowledge, there is no item which enters the market as a refrigeration system to cool the chevron baffle and in reality it is only contacted cooling unit not having any independent function of its own unless mounted or connected to the main unit. the commissioner on total examination of this plea accepted their plea for classifying the item under sub-heading 8485.90 and set aside the order-in-original for classification under 8418 as refrigerators, freezers and other refrigerating or freezing equipment.3. in this appeal, revenue contends that it answers to the description given in heading 84.18 and also is used in the vacuum coating plant to interact vapour travelling from diffusion pump to vacuum chamber. it is contended that even though it is an optional accessory as claimed by the assessee when supplied separately, however, it has to be classified based on its independent functions and description as per the tariff.5. learned dr forcibly argued the matter for classifying the item under 84.18 as a refrigerating equipment. the same was contested to by the assessee by producing the technical literature to show that the item is only an accessory and does not have functions of the refrigerator. it is contended that the item is not sold independently and it does not have any independent function of its own unless connected to the main unit. this aspect of the matter has not been contested to by the revenue and revenue does agree to the fact that the item is an independent one. however, it is stated that as it has independent function of achieving temperatures between zero degree and sixty degrees, "therefore it is a cooling machinery of the refrigeration system. this contention cannot be accepted for the fact that the item is independently sold and it does not have an independent function of its own unless it is connected to the main unit. the commissioner has further examined the matter in detail and has perused the technical literature and arrived at the conclusion that the item does not have independent function of its own. since it is connected to the main machinery and being a part, it is not specified any where specifically, it has been rightly classified under sub-heading 8485.90 as "others" and the main heading 84.85 reading "machinery parts, not containing electrical connectors, insulators, coils...not specified or included elsewhere in this chapter." 6. on careful consideration of the submission, we are satisfied that the item being an independent one and not having functions of reingeration, hence the classification claimed by the revenue under sub-heading 6 8418.00 requires to be rejected and in that view of the matter the appeal is dismissed. the cross appeal being in the nature of arguments, the same is also disposed of.

Judgment:
1. This is a Revenue appeal against Order-in-Appeal No. 153/89(B), dated 20-7-1989 upholding the contention of the assessee for classification of the item "Refrigeration System to cool the Chevron Baffle" (Accessories for vacuum coating unit Model 1526) under sub-heading 8485.90 of Central Excise Tariff Act as "Machinery part not containing electrical connectors, insulators, coils, contacts or other electrical fixtures not specified or included elsewhere in Chapter 84".

The claim of the Revenue is that the item is required to be classified 'under sub-heading 8418.00 which reads "Refrigerators, freezers and other refrigerating or freezing equipment, electric or other; heat pumps other than air-conditioning machines of ^ Heading No. 84.14".

2. The assessee had contended before the Commissioner that as per the contract entered into by them with the Director, Solid State Physics Laboratory (Ministry of Defence), they were to supply refrigeration system to cool the Chevron Baffle and accordingly the classification list was filed with the same nomenclature that the same is an optional accessory for vacuum coating unit classified under sub-heading 8479.00 and that it has no independent function of its own. In the technical note submitted by them, it had been explained that the cooling system is totally dedicated to the baffle and is designed with the purpose of direct expansion into the baffle wall; that it does not have any other use by itself other than for cooling of the Chevron Baffles. They had summed-up that they mainly adopted the description given by the buyer and to the best of their knowledge, there is no item which enters the market as a refrigeration system to cool the Chevron Baffle and in reality it is only contacted cooling unit not having any independent function of its own unless mounted or connected to the main unit. The Commissioner on total examination of this plea accepted their plea for classifying the item under sub-heading 8485.90 and set aside the Order-in-Original for classification under 8418 as refrigerators, freezers and other refrigerating or freezing equipment.

3. In this appeal, Revenue contends that it answers to the description given in Heading 84.18 and also is used in the vacuum coating plant to interact vapour travelling from diffusion pump to vacuum chamber. It is contended that even though it is an optional accessory as claimed by the assessee when supplied separately, however, it has to be classified based on its independent functions and description as per the tariff.

5. Learned DR forcibly argued the matter for classifying the item under 84.18 as a refrigerating equipment. The same was contested to by the assessee by producing the technical literature to show that the item is only an accessory and does not have functions of the refrigerator. It is contended that the item is not sold independently and it does not have any independent function of its own unless connected to the main unit. This aspect of the matter has not been contested to by the Revenue and Revenue does agree to the fact that the item is an independent one. However, it is stated that as it has independent function of achieving temperatures between Zero degree and Sixty degrees, "therefore it is a cooling machinery of the refrigeration system. This contention cannot be accepted for the fact that the item is independently sold and it does not have an independent function of its own unless it is connected to the main unit. The Commissioner has further examined the matter in detail and has perused the technical literature and arrived at the conclusion that the item does not have independent function of its own. Since it is connected to the main machinery and being a part, it is not specified any where specifically, it has been rightly classified under sub-heading 8485.90 as "others" and the main Heading 84.85 reading "Machinery parts, not containing electrical connectors, insulators, coils...not specified or included elsewhere in this chapter." 6. On careful consideration of the submission, we are satisfied that the item being an independent one and not having functions of reingeration, hence the classification claimed by the Revenue under sub-heading 6 8418.00 requires to be rejected and in that view of the matter the appeal is dismissed. The cross appeal being in the nature of arguments, the same is also disposed of.