1. The petitioners manufacture and sell ice cream. On 4th April, 1979 they were issued an import licence for a continuous freezer for use in the manufacture of ice cream. It arrived by air on 30th May, 1979. On 31st May, 1979 a bill of entry was filed which classified the freezer under Item 84.15(1) of the Customs Tariff, 1975, upon the advice of the Customs Appraisement Department. For the purpose of countervailing duty it was classified under Tariff Item 29A(1) of the Customs Tariff. On 5th June, 1979 the petitioners wrote to the Assistant Collector of Customs and submitted that the freezer should be classified as dairy machinery under Item 84.26. On 19th June, 1979 the Assistant Collector of Customs held that the freezer should be assessed under Item 84.15(1) of the Customs Tariff and, for the purpose of countervailing duty, under Tariff Item 29-A(1). The petitioners preferred an appeal on 4th August, 1979. The Collector of Customs (Appeals) dismissed the appeal. He found that what had been imported was a continuous ice cream freezer based on ammonia. Its instruction manual showed that the salient features of a refrigeration system like solenoid valves and automatic expansion valve were incorporated in the freezer and that it worked on a refrigeration system. The argument of the petitioner that Tariff Item 29-A referred only to refrigerators or refrigerating appliances which were ordinarily sold or offered for sale as a ready assembled unit did not hold good since refrigerating devices which were not self-contained units but were designed to operate together either by direct expansion or by means of a refrigerating medium which was sold as such would also be covered under Item 29-A. The freezer under consideration had the characteristics of a refrigerating device and low temperature therein was maintained in the freezing cylinder by the refrigerant which was used from outside. Against this order in appeal the petitioners presented a revision application to the Government of India. On 18th March, 1980 the application was rejected. In the order it was observed that the freezer, being based on the refrigerating principle, fell under Item 29-A. As regards the point that the freezer in question was not ordinarily sold or offered for sale as a ready assembled unit, it was observed that the leaflet itself indicated that it was capable of giving the ice-cream a creamy flavour which could be packed instantly. It was, therefore, obvious that the freezer was offered for sale as a ready assembled unit.
2. This petition challenges the order of the Assistant Collector, the order in appeal and the order in revision.
3. My attention was drawn by Mr. Rana, learned counsel for the petitioners, to the averments in the petition which show that the freezer did not have either a compressor or condensor and no refrigerator or refrigerating appliance could operate without a compressor or a condensor. The freezer as such could not be treated as a refrigerator or a refrigerating appliance. The freezer is stated also to have no utility except as a part of an ice-cream making plant. There is no affidavit in reply which controverts these factual averments.
4. My attention was drawn to the judgment of my brother Lentin dated 7th March, 1979 in Miscellaneous Petition No. 223 of 1972, Blue Star Ltd. v. Union of India and Another 1980 E.L.T. 280. The item which was sought to be classified under Tariff Item 29-A was a walk-in- cooler. The learned Judge found that the assembly and installation of the walk-in-cooler at the site was not merely a getting together of the various parts and components with nuts and bolts, but a regular creation and installation process at the site had to be gone through lasting for days before it could be put in a running condition for the first time at the site. Such an object could hardly be called a ready assembled unit such as a standard domestic air-condition or a refrigerator which was already in a working condition at the factory.
5. Mr. Rana also referred to an order passed by the Central Board of Excise and Customs in an appeal against the order passed by the Assistant Collector of Customs, Palam, Delhi. It relates to a continuous ice-cream freezer imported by Messrs Kwality Ice Cream Company. It was argued before the Board that the freezer did not satisfy the requirements of Tariff Item 29-A which covered only those refrigeration appliances which were ordinarily sold or offered for sale as ready-assembled units. In the case of the freezer there was neither a compressor nor was the refrigerant gas incorporated in it. As it was a part of a plant which had separate arrangement for having its own compressor and piping for conveying refrigerant gas, the freezer could not be called a ready-assembled unit. The Board held that in the absence of the compressor and the refrigerant the freezer could not be accepted to be a ready-assembled unit and it could not also function independently of the plant incorporating the compressor and the pipeline for the refrigerant gas. It could not, therefore, attract countervailing duty under Tariff Item 29-A. The argument that it might be a component part of a refrigerating appliance was also not acceptable to the Board as the freezer was in the nature of an accessory, complete by itself, but requiring assistance from an independent compressor and separate supply of refrigerant gas. It could not, therefore, even on that count, be said to be covered by Tariff Item 29-A.
6. Mr. Bulchandani, learned counsel for the respondents, made a valiant attempt to convince me that the freezer could be used as a cooling unit even devoid of a condensor or a compressor or refrigerant gas. There being no affidavit in reply, I must decline to be assisted by Mr. Bulchandani's expertise. He drew my attention to the pamphlet in regard to the freezer and submitted that it showed that the freezer could manufacture ice-cream even when not linked up to anything else. A full perusal of the pamphlet shows that the freezer only has application in one or more phases of ice-cream production.
7. It would appear, therefore, that the freezer is meant to be utilised as a part of an ice-cream manufacturing plant and has no utility by itself. If cannot, therefore, in my view, satisfy both requirements of Tariff Item 29-A, viz., that it must be a refrigerant appliance and that it must be sold or offered for sale as a ready- assembled unit.
8. In this view of the matter, the petition is made absolute in terms of prayer (a).
9. The petitioners have paid a sum of Rs. 1,81,231/- towards customs duty. The respondents had undertaken to Court at the interim stage to make a refund of such amount as is found in excess. The respondents are, therefore, directed to refund to the petitioners the amount of the countervailing duty levied by reasons of the application of Tariff Item 29-A to the freezer within a period of eight weeks from today.
10. Rule accordingly, with no order as to costs.