2006(11)LCX0162
IN THE CESTAT, WEST ZONAL BENCH, MUMBAI [COURT NO. II]
Ms. Archana Wadhwa, Member (J) and Shri K.K. Agarwal, Member (T)
Blue Star Ltd.
Versus
Commissioner of Customs, Mumbai
Final Order No. A/1312/2006-WZB/C-II/(C.S.T.B.), dated 15-11-2006 in Appeal No. C/224/97
Cases Quoted -
DEPARTMENTAL CLARIFICATION CITED
C.B.E. & C. Circular No. 242/76/96-CX, dated 3-9-96 [Para 5]
Advocated By -
Shri R. Ravindran, Advocate, for the Appellant.
Shri Umashankar, SDR, for the Respondent.
[Order per : Archana Wadhwa, Member (J)]. -
The dispute in the present appeal is as to whether the Industrial Cooling Unit imported by the appellants are to be classified under Heading 8418.69 as refrigerating equipment, entitled to the benefit of Notification No. 61/94 or the same are classifiable under Heading 84.15, as Air Conditioning unit, as claimed by the Revenue.
2. The appellants, before the Commissioner (Appeals) contended as under :-
"As per the catalogue and technical write up submitted by the appellant it is noticed that the cooling unit has the basic characteristics of an air conditioning machine. In reply to the query memo the appellant vide their letter5 dated 7-10-94 submitted that they have imported Industrial Cooling unit - a refrigeration equipment whose compressor capacity is designed for refrigeration loads. They also submitted that the particular equipment does not control humidity and that the air conditioning machines must incorporate in addition to the motor driven fan and blower for circulating the air, at least the following elements: an air heating device and an air humidifier or an air de-humidifier or a cold water cooler or a refrigerator unit evaporator or some other type of cooling elements with a separate device for changing the humidity of the air. Stating the above, they submitted that the unit imported by them cannot be considered as air conditioning machine."
3. The ground on which they filed the appeal are :-
"they state that the manufacturers catalogue clearly shows that the impugned goods are refrigerating units having the temperature range -20 degree F to +34 degree F. The freezing point as is well known is 32 degree F and no comfort air conditioner could provide it or above the freezing point.
they state that CTH 84.15 for air conditioning machines clearly specifies that there should be arrangement for changing temperature and humidity. The unit imported have no arrangement for control of humidity. The observation made by lower authority that glycol solution would serve a de-humidifier is factually incorrect. They refer HSN note at page 1165 under heading 84.15 and state that impugned cannot be considered as air conditioning equipment falling under CTH 84.15 of CTA 75. Since the unit imported are for operation in the range of 0 degree centigrade or below, the correct classification of those is under CTH 84.18. Hence impugned order is liable to be set aside".
4. The appellate authority has referred to HSN explanatory notes observing that Heading 84.15 also covers apparatus, which although not fitted with a device for separately regulating the humidity of the air change the humidity by condensation. Accordingly, he has held that the goods are appropriately classified under Heading 84.15.
5. After hearing both sides, we find that the Board vide its Circular No. 242-76-96-CX dated 3-9-96 has held that such type of units are classifiable as refrigerating appliances. For better appreciation, we reproduce the Circular:-
"The matter has been examined in depth by the Board. The Board has observed that freezers and freezing equipment generally work on the mechanism of refrigeration and are essentially refrigerators which are maintained at sub zero temperature for freezing perishable foods for purpose of storage. The McGraw Hill Encyclopedia of Science and Technology states that "refrigerators for lower temperatures down to 0 degree F are called freezer boxes...." HSN explanatory Notes to Heading 8418.00 at page 1169 classify therein refrigerators/ refrigerating equipment which also includes freezers and freezing equipment. In fact, no distinction is made between the two. The Conference of Delhi Zone Collectors of Central Excise held on 24th and 25th November, 1994 had also concluded that going by the history of tariff and exemption and the HSN explanatory notes, freezers are covered by Notification No. 46/94-CE.
Board is therefore, of the view that freezers and freezing equipments falling under Heading 84.18 of Central Excise Tariff Act, 1985 are covered by the description "other refrigerating appliances and machinery" and effective rate of duty prescribed under Notification No. 53/93-CE, 46/94-CE and 56/95-CE is also applicable to freezers and freezing equipments.
5. As is settled law, the revenue cannot argue against the clarification given by the Board. As such, in view of the above Circular, we set aside the impugned order and allow the appeal with consequential relief to the appellants.
(Pronounced in Court)
Equivalent 2007 (209) ELT 0117 (Tri. - Mumbai)
Equivalent 2007 (079) RLT 0195 (CESTAT-Mum.)