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Frick India Ltd. Vs. Ac Ce and ors. - Court Judgment

LegalCrystal Citation
SubjectExcise
CourtPunjab and Haryana High Court
Decided On
Case NumberCivil Writ Petition No. 1669 of 1972
Judge
Reported in1992(39)LC329(P& H)
AppellantFrick India Ltd.
RespondentAc Ce and ors.
DispositionPetition dismissed
Excerpt:
classification - refrigerating and air-conditioning appliances--parts--condensers, compressors, cooling coils etc. are parts of refrigerating and air-conditioning appliances and machinery, classifiable under ceti 29a(3). not eligible to exemption under notfn. 80/62-ce. ceti: 29a(3). - - it only supplied parts of the units, which clearly fall within the purview of item 29a (3). 8. no other point was urged......in respect of this the petitioner was made to pay a sum of rs. 13,547.20 purported to be excise duty. the petitioner made the payment under protest. another amount of rs. 19,336.87 was also paid as excise duty by the petitioner under protest in respect of parts of an ice factory plant supplied to messrs gujarat industrial investment corporation ltd., ahmedabad, vide gate pass nos. 95,96,97 and 98 of 31.12.1969.3. the petitioner applied for refund of the aforesaid duty as it was illegally charged by the assistant collector (respondent no. 1), but its application in' case of messrs. gujarat industrial investment corporation ltd., ahmedabad was rejected by the assistant collector by his adjudication order 53/70 dated 11th april, 1970, and in case of m/s. ravi cold storage plant,.....
Judgment:

A.S. Bains, J.

1. The question which arises for determination in this petition under Articles 226 and 227of the Constitution of India is, whether the Excise Duty could be levied under Item 29A of the Central Tariff Schedule to the Central Excises and Salt Act (1 of 1944), 1944 (hereinafter called as 'the Act).

2. The petitioner is a factory which manufactures air-conditioning and refrigeration equipment of various kinds at Faridabad. The factory is known as M/s. Frick India Ltd. The petitioner supplied parts of a cold storage plant to Messrs Ravi Cold Storage, Ahmedabad, vide Gate Pass Nos. iii, 112 and 113 of 21.1.1970 and Gate Pass No. 116of 22.1.1970. In respect of this the petitioner was made to pay a sum of Rs. 13,547.20 purported to be excise duty. The petitioner made the payment under protest. Another amount of Rs. 19,336.87 was also paid as excise duty by the petitioner under protest in respect of parts of an ice factory plant supplied to Messrs Gujarat Industrial Investment Corporation Ltd., Ahmedabad, vide Gate Pass Nos. 95,96,97 and 98 of 31.12.1969.

3. The petitioner applied for refund of the aforesaid duty as it was illegally charged by the Assistant Collector (respondent No. 1), but its application in' case of Messrs. Gujarat Industrial Investment Corporation Ltd., Ahmedabad was rejected by the Assistant Collector by his adjudication Order 53/70 dated 11th April, 1970, and in case of M/s. Ravi Cold Storage Plant, Ahmedabad, by his adjudication Order 54/70 dated 11th April, 1970. Petitioner's appeal against both the aforesaid orders of the Assistant Collector was dismissed by the Collector of Central Excise, Chandigarh (Respondent No. 2) by his common order dated 17th December, 1971. It is in this situation that the petitioner has challenged the levy of Excise Duty.

4. Reply has been filed on behalf of the respondents.

5. Item 29A in the Schedule to the Central Tariff to the Act reads 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. Thirty per cent ad valorem.

(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. Thirty per cent ad valorem.

(3) Parts of refrigerating and air-conditioning appliances and machinery, all sorts. Forty per cent ad valorem.

From the reading of the aforesaid item it is plain that ready assembled units such as ice makers, bottle coolers, display cabinets, air-conditioners and other air-conditioning appliances sold or offered for sale as ready assembled units, including package type air-conditioners and evaporative type of coolers, and parts of refrigerating and air-conditioning appliances and machinery are liable to excise duty. On sub-items (1) and (2) excise duty at the rate of 30 per cent ad valorem is charged and on sub-item (3) excise duty at the rate of 40 per cent ad valorem is charged. There is no dispute that excise duty is leviable on refrigerators and other refrigerating appliances which are sold or offered for sale as ready assembled units, such as ice makers, bottle coolers, display cabinets, and water coolers and air-conditioners and other air-conditioning appliances and that the goods of which the excise duly was charged do not fall within sub-item (1) and (2) of item No. 29A.

5A. Mr. Hardev Singh, learned Counsel for the petitioner, canvassed that the goods supplied by the petitioner are not liable to excise duty under sub-item (3) of item 29-A as those are not parts of refrigerating and air-conditioning appliances and machinery of sub-item (1) and (2) and that the parts such as condensers, compressors and cooling coils will not fall within the purview of sub-item (3). For this he relies upon the Division Bench decision of the Allahabad High Court in Civil Misc. Writ Petition No. 450 of 1976 and 18 other connected petitioners pertaining to the year 1976, 1977 and 1978, decided on 24th November, 1978. Their Lordships of the Allahabad High Court held that cooling coils and condensers assembled or erected at the site of the factory will not fall within the purview of sub-item (1), (2) and (3) of item 29-A and thus were outside the purview of sub-item (3) because sub-item (3) takes its colour from sub-items (1) and (2) because of the specific directive of the heading by using the words 'parts thereof and, thus, they were not liable to excise duty within the meaning of Item 29-A(3) of the Tariff Schedule. The facts of the present case are distinguishable from that of the Allahabad case. In the present case the goods sold by the petitioner factory were not assembled or erected as a part of the refrigerating unit such as cooling coils and condensers at the site of the factory. In the Allahabad case the cooling coils and condensers were erected locally while installing and assembling the cold storage plant and in that situation it was held by their Lordships of the Allahabad High Court that the cooling coils and condensers would not come within the purview of either of the sub-items of item 29-A. In the present case, as is clear from the additional affidavit filed by respondent No. 1, the petitioner had supplied the parts of Refrigerating and Air-conditioning Appliances and Machinery, namely, Cooling Coils, Condensers and Compressors. These parts were manufactured by the petitioner in their factory at Faridabad and they were sold at Ahemdabad. Complete cold storage plant was not supplied to M/s. Ravi Cold Storage, Ahemdabad. It were only the refrigerating and air-conditioning appliances, i.e., cooling coils, condensers and compressors, which were supplied. In the Allahabad case, complete cold storage plant was manufactured in the factory in which the cooling coils and condensers were used. Similarly, the petitioner did not supply the complete ice factory plant to Messrs. Gujarat Industrial Investment Corporation Ltd., Ahmedabad.

6. It was pointed out by Mr. Brar, learned Counsel for the respondents that in Form I, which was filled by the petitioner under Rule 173-B of the Central Excise Rules, 1944, complete plants are not mentioned. The petitioner has mentioned only Compressors, Condensers and Cooling Coils etc. Under this rule a manufacturer has to supply the classification list in Form I. This assertion was made by Mr. Brar on the basis of the record, which was not disputed by the learned Counsel for the petitioner.

7. Reference may be made to the notification which exempted certain items from the levy of excise duty. The Central Government, in exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, issued notification No. 80/62-C.E. on 24th April, 1962, and exempted parts of refrigerating and air-conditioning appliances and machinery falling under item No. 29-A of the First Schedule to the Act, from payment of excise duly, except the following parts:

(i) Cooling coils or evaporator;

(ii) Compressor;

(iii) Condenser;

(iv) Thermostat;

(v) Cooling unit, and, in the case of absorption types of refrigerators in which there is no compressor, heater including Burners and Baffles in a Kerosene operated absorption type refrigerator;

(vi) Starting relay controls (including expansion value and solenoid valves) and pressure switches;

(vii) Overload protection/Thermal Relay; (viii) Cabinet.

From the aforesaid notification it is clear that cooling coils, compressors and condensers etc. are not exempted from excise duty. As observed earlier, the petitioner did not supply the complete assembled unit; it only supplied parts of the units, which clearly fall within the purview of Item 29A (3).

8. No other point was urged.

9. For the foregoing reasons this petition is dismissed with costs. Counsel's fee Rs. 500/-.


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