Classification of air-conditioning parts versus complete units justified prima facie waiver of pre-deposit and stay of recovery pending appeal.

Clearance of air-conditioning components was examined against the test for treating them as complete air conditioners, and the invoices showed supply of parts such as fan motor with capacitor, outdoor condensing unit with sheet metal parts, and coil set with header. The departmental circular was applied to the effect that a clearance is not treated as a complete air conditioner unless all specified elements of the assembly are present. As the adjudicating authority had not recorded a specific finding that all six requisite elements were cleared, a prima facie case was made out for waiver of pre-deposit and stay of recovery pending appeal.

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Issues: Whether a prima facie case was made out for waiver of pre-deposit of duty and penalty and for stay of recovery pending appeal on the classification of the clearances as air-conditioner parts or complete air conditioners.

Analysis: The application was examined on the basis of the invoices annexed to the show cause notice, which indicated clearance of various components such as fan motor with capacitor, outdoor condensing unit with sheet metal parts, and coil set with header. The relevant departmental circular was noted as stating that, unless all the specified elements of an air-conditioner assembly are present, the clearance cannot be treated as that of a complete air conditioner. It was also noted that the adjudicating authority had referred to the assessee clearing major parts with essential characteristics of an air-conditioning machine, but had not recorded a specific finding that all six requisite elements were cleared so as to constitute a complete air conditioner.

Conclusion: A prima facie case for waiver of pre-deposit and stay of recovery was made out, and the recovery was stayed pending appeal.

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