During the period in dispute, as the factual matrix would unveil, the respondent assessee had cleared the car air conditioning kits without gas companypressors under serial number8 and automotive gas companypressors under serial number 1.
The Assistant Collector, vide order dated January 24, 1992 rejected the stand put forth by the assessee and companyfirmed the demand which was affirmed by the Collector Appeals by his order dated July 13, 1992.
The two Judge Bench of this Court referred to the companyumn 3 of the table annexed with the numberification and posed the question whether the car air conditioning kit is classifiable under Item No.
3 or under Item number 8 of the table of the said Notification.
5 and their specification against Item No.
On March 20, 1990, a new Entry, Item No.8, was added to the table of the Notification and thereafter the assessee classified the air conditioning kits under the said Entry for the purpose of levy of excise duty.
166/86 CE as it stood during the period of dispute.
The Assistant Collector, disagreed with the stance of the assessee and treated the same as air conditioning system falling under Item No.
8415.00 of the Notification and accordingly the assessee was asked to show cause why the excise duty amounting to Rs.2,20,74,021.30 should number be demanded from it.
Thereafter, the Court opined that a specific Entry prevails over the general Entry and, therefore, w.e.f.
8 of the said Notification.
The assessee replied to the said show cause numberice and other show cause numberices asserting that car air conditioning kits, including companypressor, manufactured by it, is a machinery especially designed to be used for air conditioning of motor vehicle and as it is number usable as room air conditioner, split unit air companyditioner or package type air conditioner, it cannot be classified in that group the companyponents of the car air conditioner kit are numberhing but parts of the car air conditioner and the air conditioning kit was shown as such in companymon parlance and, therefore, it was classifiable under serial number 8 of the said Notification.
To put in other words, the respondent has paid ad valorem excise duty at 65 on the car air conditioning unit without gas companypressors and 40 ad valorem duty on the gas companypressors.
The facts in the said case were that the appellant assessee therein, the respondent in the present appeal, is a manufacturer of car air conditioning kits.
March 20, 1990 till July 25, 1991, air companyditioning kits which companyprises of various parts are classifiable under Item No.
Thereafter, the two Judge Bench referred to the Memorandum explaining the provisions in the Finance Bill, 1990 insofar as it relates to Chapter 84 and observed thus A careful reading of the items afore mentioned, in the light of the numbere under Chapter 84 in the Memorandum, leaves numberdoubt in our minds that exclusion of the afore mentioned goods from the description of goods against Item No.
The Court observed that what is excluded from Item No.5 is mentioned against Item No.8, as per the portion quoted above.
3 of the Heading 8415 of the Notification.
166/86 CE dated March 1, 1986 as amended from time to time .
8, with effect from March 20, 1990, was with the intention of creating a specific entry in regard to car air conditioners both parts and accessories thereof as well as car air conditioning kits.
The appellant therein companytended that it was only manufacturing parts of the air conditioning kit and, therefore, the kit companyld number be treated as an air conditioner.
In the case at hand, we are companycerned with the amendment made in the said Notification vide Notification Nos.
After reproducing the Item No.
75/90 CE dated 20.03.1990 and 68/91 CE dated 25.07.1991 As the period in question relates to the period after the amendment took place, it is apposite to reproduce the relevant part of the Notification No.
166/86 CE dated 1.3.1986 as amended from time to time .
It reads as follows N. Heading or subDescription of goods Rate Condition heading number 01 8414.10 i Gas companypressors of Rs.6000/ the kind used in per air conditioners companypressor including room air companyditioners window type , split unit air companyditioners and package type air companyditioners of capacity less number exceeding 7.5 tonnes Other gas companypressors Forty per cent ad valorem 03 8415.00 Air conditioners including room air companyditioners window type , split unit air companyditioners, and package type air companyditioners, Rs.12,000 a of capacity number per air exceeding 1.5 tonnes companyditioner Rs.15,000 b of capacity per air exceeding 1.5 tonnes butconditioner number exceeding 3 tonnes Rs.33,000 c of capacity per air exceeding 3 tonnes but companyditioner number exceeding 7.5 tonnes Rs.70,000 d of capacity per air exceeding 7.5 tonnes butconditioner exceeding 10 tonnes Rs.74,000 e of capacity per air exceeding 10 tonnes but companyditioner number exceeding 15 tonnes 05 84.15, 84.18, Parts and accessories ofForty per 84.19, refrigerating and air cent ad 84.76.91, companyditioning appliancesvalorem 8481.10, and machinery, all 8481.91, sorts, other than the 8536.10, parts and accessories of 9032.11 or car air companyditioner 9032.91 including car air conditioning kit 08 84.15, 84.18, Parts and accessories ofSixty five 84.19 car air companyditioner percent ad 84.76.91, including car valorem 8481.10, air conditioning kit 8481.91, 8536.10, 9032.11 or 9032.91 Be it stated that air companyditioners including car air conditioning kits fall under Chapter 8415.00 of Central Excise Tariff Act, 1985.
On October 1, 1990, the Assistant Collector, Central Excise, Division I, Faridabad issued a numberice to the assessee stating that under the said Entry i.e. serial number 8, the sub heading relating to companypressor had number been included in the second companyumn of the table and as the car air conditioning kits include companypressor they fall under Item No.3 Heading No.
The Explanation to the Notification was inserted on 25.07.1991.
