9911796707
TMI Blog2000 (3) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... s are that the appellants manufacture package type air conditioners, room air conditioners, water chilling plant, cooling towers, bottle coolers, deep freezer and air washer etc; that Central Excise officers visited their factory premises on 7-3-1988 and a show cause notice dated 12-10-1988 was issued for demanding differential duty amounting to Rs. 48,51,977.29 p. for the period from 1984-85 to 1986-87; that officers again visited their premises on 13-10-1988 and observed that they were still not correctly working out the duty payable; that second show cause notice dated 28-3-1989 was issued for demanding duty of Rs. 31,62,228.57 paise. Both the notices were adjudicated by the Collector under order No.6/90 dated 30-3-1990 and order No. 16/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t pump and cooling towers are parts of air conditioning system and without them efficient and economical working of A.C. unit can not be achieved; that humidification and heating system are essential for air conditioning system as a whole and their value cannot be excluded: that the ducting material is also necessary component as without it the conditioned air cannot be delivered at the desired place; that the plumbing material and electrical materials are also essential for inter-connecting the total air conditioning system for operating it. The Commissioner agreed that as no duty has been charged separately, the value as indicated in the order is to be treated as cum-duty price and deduction is to be allowed in view of Section 4(4)(d)(ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant further submitted that it is thus apparent that a package type air conditioner is an air conditioner in which the machinery namely compressor; cooling coil, condenser and blower are all enclosed in a cabinet which can be mounted on the floor without any accessories, when only a medium are room has to be cooled; that in cases where it was required to provide cooled air to more than one room, the same will have to be done through insulated ducts. He also relied upon the book "Refrigeration and Air Conditioning" by Shri V.K. Jain, according to which package air conditioning unit can be with in-built condenser or may have remote air cooled condensers also. He also referred to the ISI specification for package air conditioners, IS:8148-1976 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r conditioning unit and do not constitute simple switches as a room of air conditioner. He relied upon the decision in the case of Sri Ram Bearing Ltd. v. CCE, Patna, 1997 (91) E.L.T. 255 (S.C.) wherein the Supreme Court held that the value of accessories is not includible in the value of ball bearings which are only covered by Tariff Item 49. The learned Consultant also emphasised that after installation of the whole system it become permanently fixed to the earth and does no more remain goods being immoveable and reliance was placed on the decision in the case of M/s. Quality Steel Tubes v. CCE, 1995 (75) E.L.T. 17 (S.C.) and M/s. Mittal Engineering Works P. Ltd. v. CCE, 1996 (88) E.L.T. 622 (S.C.). The learned Consultant submitted that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oling tower. He, therefore, submitted that cooling tower is an essential part of a package air conditioner. He also mentioned that air conditioning is not only cooling of a specified space but is used to reach at a comfortable level and accordingly humidifier is also an essential part of the package air conditioning system. He relied upon the decision in the case of Nichrome Metal Works v. CCE, Pune, 1996 (88) E.L.T. 448, wherein the cost of the bought out items supplied along with excisable goods was held to be includible in the assessable value of the excisable goods as these were not only the essential parts. The cost of such bought out items enriches the value of the excisable goods. Regarding invokability of extended period of limitati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e raw material then their cost has to be included in determining the assessable value of the final product. It has also been the view of the Tribunal that merely because an item cannot be operated without the others this fact does not render the later as a component or integral part of the former. This view is strengthened by the decision of the Hon'ble Supreme Court in the case of PSI Data Systems Ltd. v. CCE, 1997 (89) E.L.T. 3 (S.C.) wherein it was held that a computer may not be capable of effective functioning unless loaded with software but that is not to say that these are parts of the computer or to hold that if they are sold along with computer, their value must form part of the assessable value of the computer for the purpose of e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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