Exemption depends on actual nature of goods, not tariff reclassification, where the notification excludes air-conditioning parts and accessories.

Small scale exemption under Notification No. 1/93-C.E. could not be claimed merely because ventilation fans and filters were reclassified under different tariff headings. The decisive question was whether the goods were in fact parts or accessories of air-conditioning machinery and appliances, since the notification expressly excluded such goods even if they fell under Chapters 84, 85 or 90. Relief granted without addressing that factual and legal inquiry, or the catalogues produced on the goods' nature and use, was unsustainable. The matter therefore required fresh determination of the exemption claim on the actual character of the goods, not on classification alone.

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Issues: Whether mere reclassification of ventilation fans and filters under different tariff headings entitled them to small scale exemption when the exemption notification specifically excluded parts and accessories of air-conditioning machinery and appliances.

Analysis: The exemption under Notification No. 1/93-C.E. could not be claimed merely because the goods were reclassified away from the heading originally adopted by the department. The controlling inquiry was whether the goods were in fact parts or accessories of air-conditioning machinery and appliances, because the notification specifically excluded such goods even if they fell under Chapters 84, 85 or 90. The lower appellate authority had granted relief without addressing that factual and legal question and without considering the catalogues produced by the respondents.

Conclusion: The matter required fresh determination on whether the goods were parts or accessories of air-conditioning machinery and appliances, and the prior grant of exemption could not stand on classification alone.

Final Conclusion: The appeals resulted in remand for a fresh decision on the exemption claim after examination of the nature of the goods and the supporting catalogues.

Ratio Decidendi: Where an exemption notification contains a specific exclusion, eligibility depends on the actual nature and use of the goods, and not on tariff reclassification alone.

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