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2018 (12) TMI 143 - AAR - GSTClassification of goods - Fan Coil unit - Whether the Fan Coil unit is covered under HSN Code 8418 under Goods and Service Tax Act, 2017? Held that:- Fan Coil Unit (FCU) is a simple device consisting of a heating and or cooling heat exchanger or ‘Coil’ and fan. It is a part of HVAC system found in residential, commercial and industrial buildings. A FCU is a diverse device sometimes using ductwork and is used to control the temperature in space where it is installed or serve multiple spaces. It is controlled either by a manual on/off switch or by a thermostat which controls the throughput of water to the heat exchanger using a control valve and/or the fan speed - FCUs circulate hot or cold water through a coil in order to condition a space. The unit gets its hot or cold water from a central plant or mechanical room containing equipment for removing heat from the central building’s closed loop. The equipment used can consist of machines used to remove heat such as chiller or a cooling tower and equipment for adding heat to the building’s water such as boiler of a commercial water heater. It is very apparent that FCUs are not Refrigerators, Freezers and other refrigerating or freezing equipment and neither are heat pumps and therefore in no way they would fall under GST Tariff Heading 8418 - FCUs would clearly be covered under GST Tariff Heading 85159000 as parts of Air Conditioning machines of Heading 8515. The plea of the applicant contending that their goods would be covered under 8418 on the basis of the Hon’ble Supreme Court’s decision in the case of CCE Delhi versus Carrier Aircon Ltd. [2006 (7) TMI 8 - SUPREME COURT OF INDIA] is not sustainable in view of the facts that the goods ‘chillers’ as discussed in this judgement had the basic function of chilling the water and were thus held by the Hon’ble Supreme Court to fall in Heading 8418 for Refrigerators and Freezers, whereas the basic function of a FCU is conditioning the temperature of a place or space and not freezing or refrigerating and therefore FCU would appropriately be covered under CTH 8415. Ruling:- The Fan Coil Unit is not covered under HSN Code 8418 but under HSN Code 8415 under Goods and Service Tax Act, 2017
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