1989 (11) TMI 198 - AT - Central Excise

Summary

Issues:
Interpretation of central excise duty on regulators for fans below 107 cm sweep under Notification No. 46/84-C.E.

Analysis:
The case involved a dispute regarding the assessment of central excise duty on regulators for fans below 107 cm sweep under Notification No. 46/84-C.E. The question was whether the regulators should attract duty at 15% ad valorem under Sr. No. 3 or at 7½ ad valorem under Sr. No. 2 sub-item No. (3)(a) of the said notification. The appellants claimed assessment under Sl. No. 2 sub-item No. (3)(a), while the authorities had assessed them at 15% ad valorem under Sr. No. 3. The appellants argued that ceiling fans inherently include regulators based on various judgments and tariff advice. They contended that regulators are an integral part of ceiling fans and are typically supplied together. The advocate relied on previous decisions and the Indian Standard Specification to support their argument.

The respondent, on the other hand, argued that the notification specifically excluded regulators from fans and should be interpreted strictly. They pointed out that the tariff entry was amended to include regulators separately, and the notification prescribed separate rates for electric fans and regulators. The respondent emphasized that the decisions relied upon by the appellants were from a period before the issuance of the notification in question and, therefore, not applicable to the current case.

Upon considering the arguments and relevant provisions, the Tribunal observed that the tariff item and the notification clearly indicated separate rates for electric fans and regulators. However, if regulators were sold along with electric fans, they should be assessed at the same rate as the fan. The Tribunal relied on earlier decisions and the Indian Standard Specification to establish that regulators are integral to electric fans. It was held that when regulators are sold with fans, they should be assessed together as they form an essential part of the fan. The separate rate of duty under Sr. No. 3 sub-item (3) of the notification applied only when regulators were sold without electric fans. Therefore, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellants.