M/s. Khaitan Electrical Ltd. Vs. Collector of Central Excise, New Delhi
EmailAppeal: Civil Appeal No. 359 of 1997
(From the Judgment and Order dated 12.8.96 of the Central Excise, Custom and Gold (Control) Appellate Tribunal, New Delhi in A.No. E/2346/ 96-B in F.O. No. E/311 of 1996-B)
(From the Judgment and Order dated 12.8.96 of the Central Excise, Custom and Gold (Control) Appellate Tribunal, New Delhi in A.No. E/2346/ 96-B in F.O. No. E/311 of 1996-B)
Petitioner: M/s. Khaitan Electrical Ltd.
Respondent: Collector of Central Excise, New Delhi
Apeal: Civil Appeal No. 359 of 1997
(From the Judgment and Order dated 12.8.96 of the Central Excise, Custom and Gold (Control) Appellate Tribunal, New Delhi in A.No. E/2346/ 96-B in F.O. No. E/311 of 1996-B)
(From the Judgment and Order dated 12.8.96 of the Central Excise, Custom and Gold (Control) Appellate Tribunal, New Delhi in A.No. E/2346/ 96-B in F.O. No. E/311 of 1996-B)
Judges: S. Rajendra Babu, B.N. Srikrishna & G.P. Mathur, JJ.
Date of Judgment: Jun 08, 2003
Appearances:
Mr. Joseph Vellapally, Senior Advocate, Ms. Rohina Nath, Mr. Umesh Kumar Khaitan, Advocates for M/s. Khaitan & Co. Advocates with him for the Appellant.
Mr. T.L.V. Iyer, Senior Advocate Mr. Rajiv Nanda and Mr. B.K. Prasad, Advocates with him for the Respondent.
Mr. T.L.V. Iyer, Senior Advocate Mr. Rajiv Nanda and Mr. B.K. Prasad, Advocates with him for the Respondent.
Head Note:
EXCISE
Central Excises and Salt Act, 1944
First Schedule, Item 33 – Classification of goods for the purpose of levy of excise duty – Electric fans – Fan predominantly designed as table fan but capable of being fixed on the wall or ceiling – Whether to be classified as ‘table fan’ under Tariff Item 33(1)(a) or as “cabin, carriage, pedestal and air circulator fans” under Tariff Item 33(1)(b). Held though the fan in question has the provision for being fixed on the wall or the ceiling, since it was predominantly designed as table fan it was classifiable only as table fan. (Para 5)
JUDGEMENT:
SRIKRISHNA, J.
1. The appellant is engaged in manufacture of electric fans of different varieties. In respect of its four models of fans called ‘Mini’, “Tini’, ‘Chiki’ and ‘Miki’ the appellant submitted a classification list for approval under T.I. No. 33 (1) and also claimed concessional rate of duty @ 5% ad valorem under the notification no. 46 of 1984 dated 1.3.1984. The Assistant Collector, Central Excise issued a notice dated 23.3.1984 calling upon the appellant to show cause as to why the aforesaid models of fans should not be classified under item no. 33(3) and under item no. 1(1)(b) of the notification no. 46/84.
2. By an order dated 19.1.85 the assistant collector, Central Excise, Faridabad classified the said products under T.I. No. 33(1)(b) for the purpose of availing benefit of notification no. 46/84. On appeal the Collector of Customs and Central Excise (Appeals) took the view that considering the design and manufacture as also the literature containing the description of the concerned models of the fans, they were used primarily as table fans. The Collector (Appeals) was of the view that although there was an arrangement for clamps which enabled the concerned models of fans to be hung from wall or ceiling, their design and manufacture was entirely different from regular cabin fans which could never be placed upon a table. In this view of the matter, the Collector (Appeals) held that all the four models of fans should be classified as table fans, attracting ad valorem duty of 5% under T.I. No. 33(1)(a). Upon further appeal to the Customs, Excise, Gold (Control) Appellate Tribunal (hereinafter referred to as ‘CEGAT’), there was a difference of opinion between the two members of CEGAT. While the judicial member took the view that the concerned models of fans were to be classified under T.I. No. 33(1) as table fans, both for the purpose of classification as well as the exemption notification, the vice president disagreed and was inclined to uphold the view of the Assistant Collector. In view of the difference of opinion, the matter was referred to the third member who agreed with the vice president, that for the purpose of duty as well as exemption under the notification, the fans would fall under sub-item 3(b) of serial no. 2. In accordance with the majority judgment of the CEGAT the order passed by the Collector (Appeals) was set aside and the order of the Assistant Collector was upheld. Hence, this appeal by special leave.
3. The tariff details of the item no. 33 are detailed below :
“Item No. 33 – ELECTRIC FANS
Item Tariff Description Rate of
No. Duty
33 Electric fans including
regulators for electric
fans, all sorts –
1 Table, cabin, carriage, Fifteen
pedestal, circulator fans, percent
of a diameter not ad valorem
exceeding 40.6 centimetres
and regulators therefor.
2 Electric fans, designed Fifteen
for use in an industrial percent
system as parts ad valorem
indispensable for its
operation and have been
given for that purpose
some special shape or
quality which would not
be essential for their use
for any other purpose, and
regulators therefor.
3. Electric fans, not Twenty
otherwise specified, and percent
regulators therefor. ad valorem
4. The relevant notification no. 46 of 1984 dated 1.3.1984, reads as follows :
“EXEMPTION NOTIFICATIONS
ELECTRIC FANS
46/84-CE, Dt. 1.3.1984
Effective rates of excise duty on specified sizes of ceiling fans and table fans have been prescribed.
GSR-In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central government hereby exempts goods of the description specified in column (3) of the table annexed hereto and falling under the sub-items specified in the corresponding entry in column (2) of the said table of item no. 33 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), from so much of the duty of excise leviable thereon under the said Act at the rate specified in the said first schedule, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table.
5. In our view, the order of the Collector of Customs and Central Excise (Appeals) was well reasoned order and justified.
6. The stand of the department is that the fans in dispute are ‘multi purpose’ and could be used as table and also as cabin/carriage fan; that considering their usage for different purposes the fans in common parlance cannot be termed as table fan only. The Collector (Appeals) based his decision on the fact that the fans in question were designed primarily as table fans, although they were capable for being hung from wall or ceiling. He rightly pointed out that, because of the peculiarity of design and manufacture, the concerned fans were entirely different from regular cabin fans which could not be adapted as table fans, also basing his decision on the description of the fans in the literature distributed by the appellants. The literature describes it predominantly as a table fan, though capable of being fixed on the wall or ceiling. In our view, this conclusion was a perfectly justifiable and reasonable view of the matter and there was no justification for the CEGAT to interfere with the order of the Collector (Appeals). We agree with the decision of the Collector (Appeals).
7. In the result, we allow the appeal, set aside the order of the CEGAT dated 12.8.1996 and restore the decision of the Collector (Appeals) New Delhi dated 22.7.1986 with regard to the classification of the concerned models of fans both under the tariff item as well as the exemption notification.
8. The appeal is accordingly allowed without any orders as to costs.
1. The appellant is engaged in manufacture of electric fans of different varieties. In respect of its four models of fans called ‘Mini’, “Tini’, ‘Chiki’ and ‘Miki’ the appellant submitted a classification list for approval under T.I. No. 33 (1) and also claimed concessional rate of duty @ 5% ad valorem under the notification no. 46 of 1984 dated 1.3.1984. The Assistant Collector, Central Excise issued a notice dated 23.3.1984 calling upon the appellant to show cause as to why the aforesaid models of fans should not be classified under item no. 33(3) and under item no. 1(1)(b) of the notification no. 46/84.
2. By an order dated 19.1.85 the assistant collector, Central Excise, Faridabad classified the said products under T.I. No. 33(1)(b) for the purpose of availing benefit of notification no. 46/84. On appeal the Collector of Customs and Central Excise (Appeals) took the view that considering the design and manufacture as also the literature containing the description of the concerned models of the fans, they were used primarily as table fans. The Collector (Appeals) was of the view that although there was an arrangement for clamps which enabled the concerned models of fans to be hung from wall or ceiling, their design and manufacture was entirely different from regular cabin fans which could never be placed upon a table. In this view of the matter, the Collector (Appeals) held that all the four models of fans should be classified as table fans, attracting ad valorem duty of 5% under T.I. No. 33(1)(a). Upon further appeal to the Customs, Excise, Gold (Control) Appellate Tribunal (hereinafter referred to as ‘CEGAT’), there was a difference of opinion between the two members of CEGAT. While the judicial member took the view that the concerned models of fans were to be classified under T.I. No. 33(1) as table fans, both for the purpose of classification as well as the exemption notification, the vice president disagreed and was inclined to uphold the view of the Assistant Collector. In view of the difference of opinion, the matter was referred to the third member who agreed with the vice president, that for the purpose of duty as well as exemption under the notification, the fans would fall under sub-item 3(b) of serial no. 2. In accordance with the majority judgment of the CEGAT the order passed by the Collector (Appeals) was set aside and the order of the Assistant Collector was upheld. Hence, this appeal by special leave.
3. The tariff details of the item no. 33 are detailed below :
“Item No. 33 – ELECTRIC FANS
Item Tariff Description Rate of
No. Duty
33 Electric fans including
regulators for electric
fans, all sorts –
1 Table, cabin, carriage, Fifteen
pedestal, circulator fans, percent
of a diameter not ad valorem
exceeding 40.6 centimetres
and regulators therefor.
2 Electric fans, designed Fifteen
for use in an industrial percent
system as parts ad valorem
indispensable for its
operation and have been
given for that purpose
some special shape or
quality which would not
be essential for their use
for any other purpose, and
regulators therefor.
3. Electric fans, not Twenty
otherwise specified, and percent
regulators therefor. ad valorem
4. The relevant notification no. 46 of 1984 dated 1.3.1984, reads as follows :
“EXEMPTION NOTIFICATIONS
ELECTRIC FANS
46/84-CE, Dt. 1.3.1984
Effective rates of excise duty on specified sizes of ceiling fans and table fans have been prescribed.
GSR-In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central government hereby exempts goods of the description specified in column (3) of the table annexed hereto and falling under the sub-items specified in the corresponding entry in column (2) of the said table of item no. 33 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), from so much of the duty of excise leviable thereon under the said Act at the rate specified in the said first schedule, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table.
5. In our view, the order of the Collector of Customs and Central Excise (Appeals) was well reasoned order and justified.
6. The stand of the department is that the fans in dispute are ‘multi purpose’ and could be used as table and also as cabin/carriage fan; that considering their usage for different purposes the fans in common parlance cannot be termed as table fan only. The Collector (Appeals) based his decision on the fact that the fans in question were designed primarily as table fans, although they were capable for being hung from wall or ceiling. He rightly pointed out that, because of the peculiarity of design and manufacture, the concerned fans were entirely different from regular cabin fans which could not be adapted as table fans, also basing his decision on the description of the fans in the literature distributed by the appellants. The literature describes it predominantly as a table fan, though capable of being fixed on the wall or ceiling. In our view, this conclusion was a perfectly justifiable and reasonable view of the matter and there was no justification for the CEGAT to interfere with the order of the Collector (Appeals). We agree with the decision of the Collector (Appeals).
7. In the result, we allow the appeal, set aside the order of the CEGAT dated 12.8.1996 and restore the decision of the Collector (Appeals) New Delhi dated 22.7.1986 with regard to the classification of the concerned models of fans both under the tariff item as well as the exemption notification.
8. The appeal is accordingly allowed without any orders as to costs.
