1. This is an appeal against the judgment and order of Deshmukh J. (as he then was) dismissing the petition by the Appellants challenging the order of the Appellate Collector dated 9-5-1968 classifying certain X-ray Processing Units as Refrigerating appliances as falling in item 29A in the First Schedule to the Central Excises and Salt Act, 1944.
2. Facts relevant for the disposal of the appeal are as under : The product under dispute is referred to by the Petitioners as X-Ray Processing Machine or unit. The details of the said product are as under : It consists or two parts, one being the Master Tank or Cooling Unit and the other is Refrigerated Condensing Unit. The stainless steel tank and Master tank were go fabricated by the Petitioners through their manufacturers in accordance with designs supplied by them. They were insulated with thermocole and inserted in the outer mild steel jacket, which is also got fabricated as per the design furnished by the petitioners and suitably painted. The copper tubing are purchased from the market and are given required shape by bending top form cooling coils and are fitted on the walls of the master tanks in the inner side to form cooling coils, P.V.C. Suspension Board is also designed and fabricated for putting on the top of the unit and is checked for the dimensions correctness by inserting steel tanks in its openings. The master tank and the other tanks for chemical solution are then tested against leaks by filling with water. The Thermostat and the relay which are locally purchased are also fitted in their cooling units. Stainless steel developing tank used in X-Ray film processing units is corrosion proof and the temperature could be controlled easily by the refrigeration.
3. The question mainly is as to whether the said X-Ray processing unit could be classified as refrigerating appliance falling under item 29A because of refrigeration or cooling process applied thereto. Both the Collector and the learned Judge have held by reason of the application of cooling process to the said X-Ray processing unit the same would be classified as refrigerating appliances so as to fall under item 29A mentioned above.
4. It is the contention of the learned Counsel for the petitioners that mere application of refrigeration or cooling process to the X-Ray processing unit, which is done only to get better results, cannot thereby convert itr into a refrigerating appliance. On the other hand it is the contention of the learned Counsel for the Respondents that such an application of refrigeration or cooling process to the X-Ray processing unit, which has the object or purpose of cooling liquid in the tank would made it a Refrigerating appliance so as to fall under item 29A.
5. Item 29A of the Appendix III to the 1st Schedule to the Central Excise and Salt Act is as follows :
'29-A. Refrigerating and air-conditioning appliances and machinery, all sorts and parts thereof - (1) Refrigerators and other refrigerating appliances, which are ordinarily sold or offered for sale as ready assembled units, such as ice makers, bottle coolers, display cabinets and water coolers.
(2) Air-conditioners and other air-conditioning appliances, which are ordinarily sold or offered for sale as ready assembled units, including package type air-conditioners and evaporative type of coolers.
(3) Parts of refrigerating and air-conditioning appliances and machinery, all sorts.'
6. In this case since the petitioners had manufactured in their factory indigenously for the 1st time the concerned 4 units as described above for the supply to the hospitals, there was no question of finding out the manner in which such X-Ray processing units were understood by the people in trade. The test laid down by the supreme Court in its decision in the case of Dunlop India Ltd., AIR 1977 S.C. 597 therefore cannot apply in this case.
7. The question therefore will have to be determined on the plain meaning to be given to the expression Refrigerating appliance looking to the nature of the X-Ray processing unit and in reference to the illustrations of Refrigerating appliances given in item 29A itself viz., icemakers, bottle coolers or water coolers.
8. The illustrations by themselves suggest that a refrigerating appliance to be taxable as such must exist as a unit by itself with the sole purpose of cooling the article for which it was meant viz., cooling water or bottles or cooling water to be converted into ice. Admittedly an X-Ray processing unit can exist as such without there being any refrigerating or cooling process attached to it or being built into it as in this case. It also cannot be disputed that the purpose of the application of the said refrigeration or cooling process to the X-Ray processing unit was to enable development of X-Ray films in a lower temperature by cooling the liquid in the tank, used in developing the film, so as to get results better than in an X-Ray processing unit without such process attached to it or built into it. It also cannot be disputed that even if an X-Ray processing unit without any refrigerating or cooling process attached to it, were to be operated in a place with sufficiently lower temperature, it would also give equally better results. Therefore even though a cooling process is attached to an X-Ray processing unit, the basic and the pre-dominant purpose and nature of the X-Ray processing unit i.e. to develop X-Ray films, does not change but remains the same. A mere fact that utilisation of the refrigeration or cooling processes in the said X-Ray film processing unit, for cooling liquid in the tank for development of the film, for getting better results, cannot therefore convert the X-Ray processing unit into a refrigerating appliance. The resultant cooling of the liquid is only a secondary purpose and it cannot be said that the whole object of such a unit was only to cool the liquid used for developing an X-Ray film. In that regard the basic purpose of the unit cannot be lost sight of. The predominant purpose of the unit with or without a refrigeration or cooling process all throughout would remain the same viz, to develop X-Ray film.
9. We are therefore unable to agree with the view taken by the learned Judge that since the Unit manufactured by the Petitioners was combined one viz., for X-Ray film processing and the other for refrigerating or cooling liquid in the tank to maintain controlled temperature for the purposes of film processing, the unit as a whole must be described as a refrigerating appliance. In our view, even though the two units viz., X-Ray processing unit and cooling unit are combined the basic character and purpose of the unit which was of X-Ray film processing was not lost and the combination of the cooling process with the processing unit done only in order to get better results, would not convert the X-Ray processing unit into refrigerating appliance.
10. The learned Counsel for the Respondents has referred in the course of his argument to certain dictionary meanings of the word 'Refrigerater'. Webster's dictionary gives the meaning of the said word as 'in order to cause, to become cool' while the Concise Oxford Dictionary gives the meaning 'Makes or make cool'. These dictionary meanings would not take the matter further as regards the understanding of the expressions 'Refrigerating Appliances'. It cannot be disputed that in the present case as well as in the other Refrigerating Appliances application of cooling process is is a common factor. It also cannot be disputed that an application of cooling process would have an effect of refrigerating or cooling something. However that cannot necessarily lead to the conclusion that to whatever thing refrigerating or cooling process is applied, it would lose its predominant and basic character and would necessarily become only a refrigerating appliance.
11. The learned Counsel for the Respondents also referred us to a decision of this court in the case of The Star Trading Co. (Private) Ltd. v. The State of Bombay reported in (1962) 13 S.T.C.102. In that particular case, the question was whether a cooling plant used to cool caustic soda solution was a refrigerator within item 69 of Sec. 3 to Bombay Sales Tax Act. Firstly that being an interpretation of the term 'Refrigerator' used in Sales Tax Act which was not para materia with the Central Excises and Salt Act and secondly secondly and said expression being different from the one we are concerned with viz., Refrigerating appliance, the said interpretation cannot be of much help in interpretating the latter expression. That apart even on merits the decision has no application. In that case the court was concerned with a distinct unit meant or used of the purposes of cooling Caustic Soda which was ultimately separately used in mercerising process. Here that is not the case. The case here is that essentially the unit is an X-Ray processing unit and the cooling processes are built therein to give better results which are obtainable in a lowered temperature. Here there is no case of there being a separate unit first for cooling the developing liquid and then utilising it otherwise for processing X-Ray film so as to constitute the same as Refrigerating Appliance as such.
12. The contention of the learned Counsel for the Respondents therefore that the said X-Ray processing unit was a Refrigerating appliance so as to be covered by the said item 29A cannot be accepted. In our view, the said X-Ray processing unit though with the cooling process built into it cannot be considered to be a 'Refrigerating appliance' so as to fall under item 29A for levy of levy of excise.
13. The result therefore is that the appeal is allowed. The order of the learned Trial Judge is set aside. Rule made absolute in terms of prayers (a), (b) and (c).
14. Respondents to pay the appellants' costs.
15. The learned Counsel for the Respondents orally applies for leave to appeal to the Supreme Court. The same is rejected.
16. Order of refund stayed for a period of 4 weeks.
17. Liberty to the appellants to withdraw the amount of Rs. 500 deposited in this court towards costs.