2016(07)LCX0126

IN THE CESTAT, SOUTH ZONAL BENCH, CHENNAI

S/Shri D.N. Panda, Member (J) and V. Padmanabhan, Member (T)

ETA General Pvt. Ltd.

Versus

COMMISSIONER OF CUSTOMS, CHENNAI-II

Final Order No. 4-1287/2016, dated 26-7-2016 in Appeal No. C/40169/2016-SM

Cases Quoted -

Commissioner v. Shree Baidyanath Ayurved Bhawan Ltd.- 2009(04)LCX0002 Eq 2009 (237) ELT 0225 (S.C) - Referred [Para 6]
Commissioner v. Vicco Laboratories - 2004(12)LCX0069 Eq 2005 (179) ELT 0017 (S.C.) - Relied on [Para 11]
Moorco (India) Ltd. v. Collector-1994(09)LCX0102 Eq 1994 (074) ELT 0005 (S.C.) - Relied on [Para II]
Novopan India Ltd. v. Collector - 1994(09)LCX0128 Eq 1994 (073) ELT 0769 (S.C.) - Relied on [Para 12]
Plasmac Machine Mfg. Co. Pvt. Ltd. v. Collector- 1990(11)LCX0033 Eq 1991 (051) ELT 0161 (S.C.) - Relied on [Para 12]
Schenectad) i lerdillia 1 ,td. v. Commissioner - 2006(10)LCX0166 Eq 2007 (208) ELT 0528 (Tribunal) - Referred [Para 6]

Advocated By -

Shri V. Venkataraman, Senior Advocate assisted by
Smt. Cymluja Krishncm, Advocate, for the Appellant.
Shri R. Chandrasekaran, AC (AR), for the Respondent.

[Order per : D.N. Panda, Member (J)]. -

The appellant being unsu< fill before the Commissioner (Appeals) who maintained the Order-in-Original holding against the appellant that the general brand split type air-conditioner AOGA 24 FIT AH outdoor unit, ASGA 24 FTTA indoor unit capacity 2.0 ton (R410A gas) imported by the appellant shall be classifiable under 8415 83 10 as against the classification under CTH 8415 10 00 sought by the assessee.


2. Learned adjudicating authority while holding as above had examined the goods as presented by the appellant and considering the scheme of the tariff entry held that the specific entry excludes the general entry by virtue of the tonnage capacity prescribed by the specified entry as against the general entry not specifying such tonnage, goods imported by appellant subscribed to CTH 8415 83 10. He has understood what was the HSN Entry and was of the opinion that the ductless split air-conditioner with reversible heat pumps cannot be classified under CTH 8415 1.0 which specifically covers split air-conditioner with re-\ ersible heat pumps.

3. Learned Commissioner (Appeals) examined both the tariff entries,i.e., CTH 8415 10 10 and 8415 83 10 and distinguished the sub-classification 8415 10 from 8415 83 on the ground that the former does not cover specified capacity of spilt air conditioner whereas the later entry is capacity based. In Para 9 of his order, he opined that the split system comprises two parts one is condensing unit and the other is evaporating unit which are normally called as indoor unit and outdoor unit. This is known to trade under trade parlance. Therefore, the Headings 8415 10 10 and 8415 83 10 are different by their nature and description.

4. Challenging the aforesaid observations of both the authorities elow,appellant came in appeal with the submission that the goods as imported and stated herein before remained uncontroverted insofar as their description in Bill of entry is concerned. But, the imported goods being classifiable under CTI I 8415 10 10 it is entitled to basic duty exemption under Notification No. 85/2004, dated 31-8-2004 under SI. No. 48 under Indo-Thailand Free Trade Agreement. Appellant stated that it had submitted packing list, certificate of origin, catalogue, etc.,by its letter dated 15-7-2015 to the adjudicating authority pleading that the goods imported shall not come under either CTH 8415 81 or CTH 8415 82. The goods being split air-conditioner, it shall come under CTH 8415 10 10 only. The split system air-conditioners imported are ductless and utilize a separate evaporator for each area to be air-conditioned. This comprises of an external unit and an in
ternal unit called evaporator and condenser.



5.1 Before Tribunal, appellant submitted that the drawing submitted at page 31 of the paper book is a plain and normal indoor unit satisfying the technical requirement of CTH 8415 10 10. Its different units are as per page 32 of the paper book. Appellant invited attention to page 34 of the paper book stating that the CTH 8415 83 deals with heat pump indoor unit which is contended by Revenue as had been imported by the appellant.

5.2 Strangely none of these documents were before the adjudicating authority for examining the character of the goods. It is settled principle of law that technical literature cannot be usefully cited for the first time before a higher court unless that is cited before the court of first instance, i.e., before the adjudicating authority or Com(A) for examination of the goods what that was presented. The grounds of appeal of the appellant does not reveal whether the technical literature was before the adjudicating authority for its scrutiny with the goods presented. None of the authorities had occasion to deal with the version of the appellant made as above, in absence of aforesaid documents before them.



6. Appellant vehemently opposing the adjudication submitted that the goods as stated above imported are split system air-conditioner and such split system being prescribed under entry CTH 8415 10 10 and preceded by (-) as well as flowing from the sub-classification "window or wall types, self-contained or split system," that is covered by the CTH 8415 10. Accordingly, following the judgment of the Apex Court in the case of Commissioner of Central Excise, Nagpur v. Shree Baidyanath Ayurved Bhawan Ltd. - 2009 (237) ELT' 225 (S.C.) there cannot be any other classification of the goods as has been laid down in Para 34 thereof. Appellant further relied on Para 5 of the Tribunal's decision in the case of Schenectady Herdillia Ltd. v. Commissioner of Customs (Import), Mitmbai - 2006(10)LCX0166 Eq 2007 (208) ELT 0528 (Tri.-Mumbai) to say that the product preceded by the ( - ) shall fall in the sub-classification thereof. Appellant also argued that in common parlance when an air-conditioner is window or split specifically covered by a tariff entry, it should not be misclassified under another entry for any other reason. The CTH 8415 10 10 having dealt split system specifically that goes out of the ambit of CTH 8415 83 10.

7. Revenue on the other hand says that the above two entries arc mutually exclusive and one does not overlap the other. The goods covered by CTH 8415 10 10 are non-specified split system. 'This non-specification is distinguished by capacity of the air-conditioner. The entry CTH 8413 83 distinguishes a split air-conditioner by its specified capacity from another for its own mechanism, character and nature. Therefore, one cannot be confused with other. The widely accepted principle of classification is that a specific entry excludes a general entry from its scope for classification of goods.


8. Heard both sides and perused the records.

9. Appellant relying on pages 31 and 34 of the paper book, submits that the type of air-conditioner appearing in page 31 is a normal indoor unit covered by the CTH 8415 10 10 and the air-conditioner appearing at page 34 is a heat pump indoor unit covered by 8415 83 10. Both are different by their specification and character. It is surprising how attention was drawn by appellant to above pages without such documents being made available to both the authorities be low for their examination. Not even a whisper was made by appellant before both the authorities on any technicalities of the goods to distinguish that accord ing to the understanding by the trade. In common parlance a split air-conditioner is known to have two units. One unit is called the indoor unit which is normally referred as condenser unit and the other one is evaporator unit. The former is meant for external installation and the latter is meant for internal installation. The split system is ductless and a separate evaporator is used for each area to be air-conditioned. The distinguishable character of the split air-conditioner from the window type is recognized by HSN in Section XVI. The Customs Tariff in India has arranged the goods in such a manner that they self-speak for them selves and submit either to their parentage or orphanage. Chapter 84 of the Tariff Act deals with the nuclear reactor, boilers, machinery and mechanical appliances. The Tariff Item 8415 deals with the heading "air-conditioning machines, comprising
a motor-driven fan and elements for changing the temperature and humidity, including
those machines in which the humidity cannot he separately regulated". The said Tariff
item is reproduced below for appreciation of its coverage of different types of goods :-
10.

10.1 There are six classes of goods dealt with by Tariff Entry 8415. One such class is 8415 10, dealing with "window or wall types, self-contained or "split SXfSiem", the second class of goods is dealt by Tariff Heading 8415 20 and that is of a kind used for person in motor vehicles the third category is under CTH 8415 81 specifying the goods as Incorporating a refrigerating unit and a valve for several of the cooling or heat cycle (reversible heat pumps) under other category. The fourth category comes under the CTH 8415 82 dealing with other, incorporating a refrigerating unit. The fifth category is the goods "Not incorporating a refrigerating unit" comes under CTH 8415 83. This category has two classifications viz. split air-conditioner two tonnes and aboveunder CTH 8415 83 10, and the other under CTH 8415 83 90. The last category of sub-classification belonging to the class 8415 is 8415 90 00 which relates to "parts".

10.2 The first category of goods windows or wall types, self-contained or split system dealt by CTH 8415 10 covers two types of goods under CTH 8415 10 10 and 8415 10 90. Those are "split system" and "other" respectively. Appellant claims that its goods falls under CTH 8415 10 10 being preceded by (-) which is window or wall types self-contained or split system air-conditioner. The goods as presented before customs were split system air-conditioner of specified capacity, make, design and technicalities. Revenue says that there is no quarrel that the goods imported were air-conditioner but its capacity being 2 ton and it is a split air-conditioner of the specification described by CTH 8415 83 10, that does not come under CTH 8415 10 10 due to tonnage capacity prescribed by the former entry. Therefore, the imported goods shall come under CTH 8415 83 10. This class of goods is preceded by the CTH 8415 83 with (- -). It is obvious that a split air-conditioner has two units one is condensing unit and the other evaporating unit are separated from each other. Refrigeration is done by one unit wrhich is air-conditioner and the other is evaporator. Accordingly, the more specific entry of two ton (2) capacity split air-conditioner appearing in CTH 8415 83 10 excludes the general entry of split air-conditioner specified in 8415 10 10.

11. There is no difference to the proposition in the citation made by the appellant following the Interpretative Rule. But when there is a specific entry that excludes a general entry. This has been held by the Apex Court in the case of Moorco (India) Ltd. v. Collector of Customs, Madras - 1994(09)LCX0102 Eq 1994 (074) ELT 0005 (S.C.). It is common sense that no air-conditioner trader shall sell a two ton capacity split air-conditioner to a buyer who does not pay for the same. So also a buyer of split air-conditioner goes to a seller with clear description of tonnage capacity. Price of air-conditioners according to their capacity differs. They also differ by their technicalities of manufacture and utility and quite distinct from each other. A small capacity air-conditioner shall not serve the purpose of a higher capacity air-conditioner because room size where installation is to be made is also decisive. Therefore, the trade knows the goods by their capacity in common parlance. The imported goods proved its identity by its capacity as presented before customs and that distinguished itself from another. Revenue has discharged its burden of proof arriving at the classification by the capacity of the split air-conditioner. When it has discharged its burden of proof following the ratio laid down in the case of CCE, Nagpur v. Vicco Laboratories - 2004(12)LCX0069 Eq 2005 (179) ELT 0017 (S.C.), appellant failed to negate the same bringing out cogent evidence to the contrary.

12. Classification of goods is made according to common understanding and that is the true test but not what a technical literature says following the ratio laid down in the case of Novopan India Ltd. v. Collector of Central Excise, Hyderabad - 1994(09)LCX0128 Eq 1994 (073) ELT 0769 (S.C.). Further, when the appellant sought exemption under Notification No. 85/2004, dated 31-8-2004 under a trade agreement, it was the burden of the appellant to bring its goods within the four of CTH 8415 10 10 discharging the same since exemption is an exception to the dutiability and to be construed strictly at the stage of determination. When appellant failed in the classification of the goods, it is not entitled to the benefit of exemption notification following the ratio laid down in Novopan India Ltd. (supra). Law is well-settled that when a goods is classifiable under a specific entry it goes out of any other entry following the ratio laid down in Plasmac Machine Mfg. Co. tj* Ltd. v. CCE - 1990(11)LCX0033 Eq 1991 (051) ELT 0161 (S.C.).


13. In view of the above discussions, it can be irresistibly be concluded that mere assertion without meeting common parlance test and elementary principles of jurisprudence that Genereliaspecialibus won derogant - "General things do not derogate for special", appellant fails to succeed since two ton split air-conditioner subscribes to the CTH 8415 83 10 instead of the CTH 8415 10 10.

14. In the result, appeal is dismissed.
(Pronounced in open Court on 26-7-2016)

Equivalent 2016 (341) ELT 0140 (Tri. - Chennai)