Case: Frick India Ltd Vs. Union Of India And Others

1. The appellants are a public limited company having a factory at Faridabad and engaged in manufacturingand 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, condensers and compressor and supplied the same for putting up a cold storage plaint to one M/s. 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. 13.547.20 P. Against gate pass Nos. 95, 96, 97 and 98 dated January 21, 1969 the appellants had cleared from the factory various parts of refrigerating and air-conditioning appliances and machinery for an ice-factory plant to one M/s. Gujarat Industrial Investment Corporation Limited, Ahmedabad. These parts also were manufactured by the appellants in their factory at Faridabad and were cleared by them against gate passes refined to above after payment of a duty of Rs. 19,336.87 P.2. 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. 29A (3), they filed two refund applications. The Assistant Collector of Customs rejected both theseholdings that the assessment was made correctly. The appellants preferred two appeals against these orders before the Collector of Customs and Central Excise, Chandigarh who by his common order dated December 20, 1971 dismissed the appeals. Thereafter, the appellants filed writ petition in the High Court of Punjab and Haryana at Chandigarh. This writ petition was dismissed by a learned Single Judge holding that the goods supplied are parts of a refrigerating and air-conditioning appliances that a complete could storage plant was not supplied to M/s. Ravi Cold Storage. Ahmedabad or M/s. 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.

Reasoning: 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 assembled unit for purposes of countervailing duty under the Customs Act. Aftero 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) of item 29-A of the Central Excise Tariff refers to parts of machinery and appliances and complete plants which cannot be considered asAs may be seen from this paragraph it consists of two parts, the first portion referring to parts of machinery and appliances 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 of machinery and such complete plants would not be classifiable 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 thee afraid that both these reasons are fallacious and not acceptable. As already stated neither can(3) be said to take its colour from(1) and (2) nor could thoseor heading curtail the plain meaning of the words used in(3). We, therefore, hold that the Mother India Refrigeration Industries Pvt. Ltd. v. Supdt. of Central Excise and Ors. 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. We shall deal with this question when we consider that Tariff Advice in a latter part of this judgment.