1992 (8) TMI 158 - AT - Customs

Summary

Issues Involved:
1. Eligibility of mini-bars for the benefit of Notification 59/87.
2. Classification of the imported mini-bars under the Customs Tariff Act.
3. Determination of whether the imported mini-bars are household type refrigerators.

Detailed Analysis:

1. Eligibility of Mini-bars for the Benefit of Notification 59/87:
The appellants imported 115 pieces of Electrolux Mini Bar Refrigerators and sought clearance under Heading 8418.29 of the Customs Tariff Act with the benefit of Notification 59/87. The Department contended that these refrigerators, fitted with a self-contained absorption unit, are classifiable under Heading 8418.22, which pertains to household type refrigerators. The adjudicating authority and the Collector (Appeals) denied the benefit of Notification 59/87, arguing that the refrigerators are interchangeable between hotel industry and domestic use, thus classifying them as household type.

2. Classification of the Imported Mini-bars under the Customs Tariff Act:
The appellants argued that the mini-bars are internationally recognized as hotel mini-bars, distinct from household refrigerators which generally operate on a compressor system. The imported mini-bars work on an absorption system, making them suitable for hotel use due to their noiseless operation. The appellants highlighted that the mini-bars lack features typical of household refrigerators, such as egg racks, butter racks, and vegetable trays. They also pointed out that the size of the mini-bars (40 liters) is smaller than the minimum size of domestic refrigerators (65 liters). The appellants supported their claims with affidavits from M/s. Kelvinator of India Ltd. and a letter from the manufacturer, confirming the commercial use of the mini-bars in hotels.

3. Determination of Whether the Imported Mini-bars are Household Type Refrigerators:
The Tribunal noted that the catalogue and manufacturer's certification described the mini-bars as hotel refrigerators for commercial use only. The absence of household features and the specific design for hotel use distinguished the mini-bars from household refrigerators. The Tribunal referenced previous judgments, including the Supreme Court's decision in the case of Nat Steel Equipment P. Ltd. v. Collector of Central Excise, which emphasized the ordinary or commonly known purpose or use of an item for classification. The Tribunal concluded that the imported mini-bars are not household type refrigerators and are appropriately classifiable under Heading 8418.69, making them eligible for the benefit of Notification 59/87.

Conclusion:
The Tribunal held that the imported mini-bars are classifiable under Heading 8418.69 and are eligible for the benefit of Notification 59/87 against Sl. No. 13. The impugned order was set aside, and the appeal was allowed with consequential relief to the appellants.