ivil Appeal No 3395 of 1982
From the Judgment and Order dated 461982 of the Punjab and 572 Haryana High Court in LPA No 936 of 1982 Shankar Das and HK Puri for the Appellant
AK Ganguli RP Srivastava P Parameshwaran Ms A Subhashini and Dalip Sinha for the Respondents
The Judgment of the Court was delivered by V RAMASWAMI J
The appellants are a public limited company having a factory at Faridabad and engaged in manu facturing air conditioning and refrigeration equipment of various kinds and descriptions
They are holding a L 4 Licence to manufacture goods falling under Tariff Item No 29A of the Central Excise Tariff
As per classification lists submitted from time to time under rule 173B of the Central Excise Rules 1944 the company had declared in Form I that they are engaged in the manufacture of goods falling under sub items 2 and 3 of Tariff Item No 29A Against gate pass Nos 111 112 and 113 dated January 21 1970 and gate pass No 116 dated January 22 1970 the appellants had cleared from the factory cooling coils condensors and compressors and supplied the same for putting up a cold storage plant to one Ms Ravi Cold Storage Ahmedabad
These parts were manufactured by the appellants in their factory at Faridabad and were cleared by them against the above mentioned gate passes after payment of a duty of Rs 1354720 P
Against gate pass Nos 95 90 97 and 98 dated January 21 1969 the appellants had cleared from the factory various parts of refrigerating and air conditioning appli ances and machinery for an Ice factory plant to one Ms Gujarat Industrial Investment Corporation Limited Ahmeda bad
These parts also were manufactured by the appellants in their factory at Faridabad and were cleared by them against gate passes referred to above after payment of a duty of Rs 1933687 P
On the ground that parts of the refrigerating and air conditioning appliances which they have removed under the above said gate passes are not excisable goods falling under Tariff Item No 29A3 they filed two refund applications
The Assistant Collector of Customs rejected both these applications holding that the assessment was made correctly
The appellants preferred two appeals agianst these orders before the Collector of Customs and Central Excise Chandi garh who by his common order dated December 20 1971 dis missed the appeals
Thereafter the appellants filed writ petition in the High Court of Punjab and Haryana at Chandi garh
This writ petition was 573 dismissed by a learned Single Judge holding that the goods supplied are parts of a refrigerating and air conditioning appliances that a complete cold storage plant was not supplied to Ms Ravi Cold Storage Ahmedabad or Ms Gujarat Industrial Investment Corporation Ltd Ahmedabad and that they will fall clearly within the purview of Tariff sub item 3 of Tariff Item 29 A
An appeal preferred against this judgment was dismissed in limine by a Division Bench
In order to understand the argument of the learned counsel for the appellants it is necessary to set out Tariff Item 29 A in full at the relevant period which reads as follows Item No Tariff Description Rate of Duty 29A REFRIGERATING AND AIR CONDITIONING APPLIANCES AND MACHINERY ALL SORTS AND PARTS THEREOF 1 Refrigerators and other refrigerat Thirty ing appliances which are ordinarily per cent sold or offered for sale as ready ad valorem assembled units such as ice markers bottle collers display cabinets and water coolers
2 Air conditioners and other air Thirty conditioning appliances which per cent are ordinarily sold or offered ad valorem for sale as ready assembled units including package type of air conditioners and evaporative type of coolers
3 Parts of refrigerating and Forty air conditioning appliances per cent and machinery all sorts
ad valorem The argument of the learned counsel for the appellants was that sub items 1 and 2 deal with refrigerators and other refrigerating appliances and air conditioners and other air conditioning appliances respectively which are ordinarily sold or offered for sale as a ready 4514 assembled unit
Therefore in order to bring it within sub items 1 and 2 such refrigerating and air conditioning appliances should be complete assembled units and they must also be ordinarily sold or offered for sale as such ready assembled units
The illustrative examples referred to in the two sub items make this clear according to them
The cold storage plant and ice factory plant supplied to the factories concerned in this case as such are not such com plete assembled units which are ordinarily sold or offered for sale within the meaning of sub items 1 and 2
From this premise they sought to interpret sub item 3 as mean ing that the goods that are covered by that sub item are parts of those refrigerating or air conditioning appliances which in its assembled form would have come as a complete unit under Tariff sub items 1 and 2 of Item 29A and are manufactured for sale
In other words they want to restrict the content of sub item 3 with reference to the items that may fall under sub items 1 and 2
The further submission was that though in its sweep sub item 3 may appear to cover all and every part of refrigerating and air condition ing appliances and machinery of all sorts the words and parts therefore in the heading controlled the meaning and restrict it in the context only to parts of a completed unit which as such completed unit would have come under sub items 1 and 2 of Item 29A
In this connection learned counsel has referred to certain decisions of the High Courts which we will refer to later
By Finance Act of 1961 Item 29A and 40 were introduced in the First Schedule to the and those two entries read as follows 29A AIR CONDITIONING MACHI Twenty NERY ALL SORTS
per cent ad valorem
REFRIGERATORS AND PARTS Twenty THEREOF
SUCH AS ARE per cent SPECIALLY DESIGNED FOR USE ad valorem WITH REFRIGERATORS
The Notes on Clauses relating to the relevant clause in the Finance Bill 10 of 1961 stated that Item 29A proposes to levy an excise duty on air conditioning machinery and Item 40 proposes to levy an excise duty on refrigerators and parts thereof
 By the Finance Act 2 of 1962 a combined tariff entry in the form 575 prevailing in 1969 and 1970 was introduced and the Notes on Clauses relating to this amendment stated that the proposal is to combine into one item the present tariff items 29A and 40 relating to Air conditioning Machinery  and Refrig erators  respectively as well as to make it more comprehen sive
 Under the Government of India Ministry of Finance Department of Revenue Notification No 8062 Central Ex cises dated 24th April 1962 as subsequently amended by Notifications dated 29th December 1962 23rd March 1968 and 14th June 1969 all parts of refrigerating and air conditioning appliances and machinery other than the parts mentioned below were exempt from the payment of excise duty leviable thereon 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 absorp tion type refrigerator
vi Starting Relay controls including expansion value and solenoid valves and pressure switches vii Overload ProtectionThermal Relay viii Cabinet
 There are a number of other notifications also exempting parts of refrigerating and air conditioning appliances and machinery intended to be used for various purposes speci fied in the notifications such as use in refrigerating and air conditioning appliances or machinery which are installed or to be installed in any of the following establishments 1
Computer rooms
Research and test laboratories 3
Animal houses 4
Telephone exchanges 5
Broadcasting studios 6
Trawlers 7
Dams 8
Mines and tunnels 9
Thermal and hydel power stations 10
576 Technical buildings of Military Engineering Service 11
Any Hospital run by the Central Government a State Govt a Local Authority or a Public Charitable Institution and 12
Any factory
 Vide the Notification No 9376 CE dated 1631976 issued under subitem 3 of Item 29A of the First Schedule
there are various other notifications also issued under the same sub item which covers installation of air condition and refrigerating equipments of almost all categories
The legislative history and the notifications of the Government show that sub item 3 of Item 20A is a compre hensive provision encompassing within it parts of all sons of air conditioning and refrigerating appliances and machin ery and the Government of India was issuing notifications of exemptions on the understanding that such parts are covered by sub item 3
The language used in sub item 3 is also wide and comprehensive in its application and could not be given a restricted meaning
Sub items 1 2 and 3 are independent of each other and mutually exclusive
The scope of sub item 3 is neither restricted nor controlled by the provisions of sub items 1 and 2
It is well settled that the headings prefixed to sec tions or entries cannot control the plain words of the provision they cannot also be referred to for the purpose of construing the provision when the words used in the provision are clear and unambiguous nor can they be used for cutting down the plain meaning of the words in the provision
Only in the case of ambiguity or doubt the heading or sub heading may be referred to as an aid in construing the provision but even in such a case it could not be used for cutting down the wide application of the clear words used in the provision
Sub item 3 so construed is wide in its application and all parts of refrigerating and air conditioning appliances and machines whether they are covered or not covered under sub items 1 and 2 would be clearly covered under that sub item
Therefore whether the manufacturer supplied the refrigerating or air condi tioning appliances as a complete unit or not is not relevant for the levy of duty on the parts specified in sub item 3 of Item 29A
Strong reliance was placed by the learned counsel for appellants on the decision of the Allahabad High Court in Mother India Refrigeration Industries P Ltd vs Superin tendent of Central Excise  Ors All
In that case the writ petitioners were the owners 577 Of a old storage plant
The writ petitioners themselves installed and assembled the cold storage plant
Part of the plant consisted of erecting locally what are called cooling coils and condensers
Generally cooling coils and condensers contain a very long length of pipes made in a particular shape
The petitioners in that case however bought pipes of various lengths erected them one after the other and joined one with the other with a U  shape bend
These bends were welded
The result was that the various pipes consti tuted an unit indesigning the plant
This part of the plant was necessary in order to pass the cooling gas through it and thereby cool the chambers of the storage
The petition ers bought the pipes and the bends from the market and got them placed at the factory site and got them welded
The department in the view that the conglomeration of pipes manufactured by the petitioner constituted manufacture of cooling coils which are parts of refrigerating and air conditioning appliances and machinery covered by Item 29A3 called upon the petitioners to pay excise duty on its value
All the authorities found that the erection and installation by the petitioners by laying pipes and joining them by welded bends amounted to the manufacture of cooling coils and condensers as known to refrigeration technology
The High Court accepted these findings
However it held that parts of refrigerating and air conditioning appliances which answer the description given in sub items 1 and 2 alone are liable to duty under Entry 29A3 and not all parts used in refrigeration technology
The learned judges reached this conclusion on the grounds that The heading of Entry 29A makes it clear that only parts of such refrigerating and air conditioning appliances and machinery as are covered by sub entries 1 and 2 alone are liable to duty
In other words the parts in question should be such as are ordinarily sold or offered for sale as ready
assembled units
On any other interpretation the words thereof  occurring in the heading 29A will be redun dant
An interpretation which makes any part of a statute redundant has to be discarded and that When an entry in the schedule specifically refers to and re stricts the applicability of duty to goods which are assembled units and which are generally offered for sale the concept of sale is necessarily brought in
As already seen sub entry 3 takes it colour from sub entries 1 and 2 because of the specific directive of the heading by using the words parts thereof 
 578 We are afraid that both these reasons are fallacious and not acceptable
As already stated neither can sub entry 3 be said to take its colour from sub entries 1 and 2 nor could those sub entries or heading curtail the plain meaning of the words used in sub entry 3
We therefore hold that the Mother India Refrigeration Industries P Ltd vs Supdt
of Central Excise  Ors s case supra was wrongly decided and accordingly we overrule the same
The learned Judges have also relied on a Tariff Advice dated September 30 1969 given under the Customs Act for the purpose of levying countervailing duty
We shall deal with this ques tion when we consider that Tariff Advice in a latter part of this judgment
The decisions of the Bombay High Court in Blue Star Ltd vs Union of India  Anr Bom
and Joy Ice Cream Bombay vs Union of India Bom related to the scope of Tariff item 29A1 and not Item 29A3 with which we are concerned
In the view we have taken that sub entries 1 and 2 of Entry 29A cannot control or restrict the meaning of such entry 3 it is not necessary for us to go into the scope of Entry 29A 1 and 2
These decisions therefore are no relevance
The decision of the Kerala High Court in Calicut Refrig eration Co vs Collector of Customs  Central Excise Cochin  Ors Ker also does not touch upon the question with which we are concerned
The decision of the Allahabad High Court in Chhibramau Cold Storage vs CEGAT All
and Goptal Cold Storage  Ice Factory vs Union of India  Ors All simply followed the decision in Mother India Refrigeration Industries P Ltd vs Supdt
of Central Excise  Ors supra and there fore they do not advance the case any further
On the other hand we have a decision of the Gujarat Court in Anil Ice Factory  Anr
vs Union of India  Ors Guj wherein MP Thakkar Chief Justice as he then was referred to the Allahabad High Court judgment and dissenting from it held On taking a close look at Item 29A it will be seen that what is printed at the top of the entry as caption indi cates the nature of the goods covered by the entry
It does not more than indicate what is the nature of the goods which are specified in the said entry
1 2 and 3 are independent of each other
Clause 3 in terms refers to goods which fall within the description of the said entry 579 namely Parts of refrigerating and air conditioning appli ances and machinery all sorts
It is not disputed that cooling coils and condensers would fall within the category of appliances and machinery
Counsel however argues that we must first read the scope of cl
1 and cl
2 and draw an inference therefrom that the goods covered by entry will attract excise duty only provided they are manufactured for sale
We see no valid reason for reading the entry in that manner
Each of the three sub clauses referes to different entries and specifies different rates of duty for the goods falling within the respective entries and that As we indicated earlier in the first place the purpose of the caption is to provide a clue to the nature of the goods which are covered by the entry
But even otherwise if the caption is read in the manner in which it has been worded it does not justify or warrant an inference that it related to goods which are manufactured for the purpose of sale
Entry 29A adverts to goods which would fall within one or the other of the three classifications specified therein
The description of each category of goods if clearly mentioned in col
So far as CI
3 is concerned the tariff description is parts of refrigerating and air conditioning appliances and machinery
We cannot read the words manufactured for sale  in entry No 3 by drawing upon the theory of Taking colour which has no application in a case like the present one
If we inject these words we would be re writing this section and we would be legislating which we cannot do
 The learned counsel for the appellants then relied on the Trade Advice dated 30th September 1969 given by the Central Board of Excise and Customs New Delhi in respect of classification of refrigerating machinery and ice making plant which are not sold or offered for sale as ready assem bled unit for purposes of countervailing duty under the Customs Act
After referring to sub items 1 and 2 of Item 29A as covering complete plant and equipment which a re ordinarily sold or offered for sale as ready assembled units had stated as follows with reference to sub item 3 Sub item 3 of item 29A of the Central Excise Tariff 580 refers to parts or  machinery and appliances and complete plants which cannot be considered as parts of machinery would not be classifiable under sub item 3 to item 29A CET also
 As may be seen from this paragraph it consists of two parts the first portion referring to parts of machinery and appli ances and the second portion referring to complete plants which cannot be considered as parts of machinery
The whole argument arose because of the composite sentence used in this paragraph
It only means complete plants which are covered by Items 1 and 2 cannot be considered as parts on machinery and such complete plants would not be classi fiable under sub item 3 of Item 29A
The reliance placed by the learned counsel on this notification does not in any way advance the case of the appellants
In the foregoing circumstances the appeal fails and it is dismissed with costs
Y Lal Appeal dismissed


Summary:
The respondent contractor had entered into an agreement with the petitioner for formation of an earth dam
Disputes and difference arose between the parties
A reference was made to the arbitrator wherein the respondent made eleven claims out of which one claim was later withdrawn
The arbitrator gave a non speaking award in favour of the re spondent amounting to a consolidated sum of Rs1939 lakhs
The respondent flied a proceeding before the Court to make the award rule of the Court
The petitioner preferred an application for setting aside the award which was dis missed
The High Court dismissed the appeal and the revision of the petitioner
Before this Court it was contended inter alia that the award purported to grant damages on the basis of escalation of cost and prices and such escalation was not a matter within the domain of the bargain between the parties
It was also contended that the fact that the arbitrator had taken into consideration the question of escalation would make the award bad because it was not discernible whether he had awarded any amount on account of excalation
Dismissing the special leave petition this Court HELD 1 In matters of challenging an award there are often two distinct and different grounds
One is an error apparent on the face of the record and the other is that the arbitrator has exceeded his jurisdiction
In the latter case the Court can look into the arbitration agreement but under the former It cannot unless the agreement was incorporated or recited In the award
58A B Ms Sudarshan Trading Co vs Government of Kerala  Anr   referred to
11 55 2 Only in a speaking award the court can look into the reasoning of the award
It is not open to the court to probe the mental process of the arbitrator and speculate where no reasons are given by the arbitrator as to what impelled the arbitrator to arrive at his conclusion
58D 3 It is not discernible on the face of the record that the arbitrator has exceeded his jurisdiction in awarding damages on account of escalation
All that the award states is that he has considered the claim on the basis of escala tion
Such a consideration does not make the award on the race of it bad on the ground of error apparent on the face of the record  58G H 59A B 4 The Arbitrator does not state that he has awarded any amount on that account
There is neither any error apparent on the face of the record nor any material to satisfy that the arbitrator has exceeded his jurisdiction in awarding the amount as he did
59B C