Court Quashes Circular, Stops Excise Duty on Aluminium Grills, Dampers, Diffusers; Reclassifies Under Tariff Entry 76.

The court allowed the petition, quashing the impugned Circular dated 13-9-2000 issued by the CBEC, and restrained respondents from imposing excise duty under Tariff Entry 84.15 on the aluminium grills, dampers, and diffusers manufactured by the petitioner. The court held these products should be classified under Tariff Entry 76, aligning with the CEGAT, Bangalore Bench's decision.

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Issues Involved:
1. Classification of aluminium grills, dampers, and diffusers under the Central Excise Tariff Act.
2. Validity of the impugned Circular dated 13-9-2000 issued by the CBEC.
3. Applicability of the doctrine of merger in the context of the Supreme Court's dismissal of an appeal.

Summary:

1. Classification of Aluminium Grills, Dampers, and Diffusers:
The petitioner, a company manufacturing aluminium grills, dampers, and diffusers, contended that these products should be classified under Chapter 76.16 of the Central Excise Tariff Act as articles of aluminium. The petitioner argued that these products are used for general purposes, such as ventilation systems in buildings, and not specifically as parts of air-conditioning machines. The products are tailor-made as per the specifications of buyers and are used in various premises for ventilation and interior decoration. The petitioner emphasized that these products do not involve any change in temperature or chemical process and are not integral parts of air-conditioning machines.

2. Validity of the Impugned Circular Dated 13-9-2000:
The petitioner challenged the Circular dated 13-9-2000 issued by the CBEC, which classified aluminium and steel grills used in air-conditioners under Entry 84.15. The petitioner argued that the CBEC's circular was misconceived as it did not consider the factual position that the products manufactured by the petitioner are not used in air-conditioning machines but are general-purpose aluminium products. The petitioner relied on previous classifications and trade notices, including a specific order by the Assistant Collector, Central Excise, Noida, which classified these products under Chapter 76.16. The petitioner also cited a judgment by the CEGAT, Bangalore Bench, which held that these products are classifiable under Chapter 76, and the Supreme Court's dismissal of an appeal against this judgment.

3. Applicability of the Doctrine of Merger:
The court discussed the applicability of the doctrine of merger in the context of the Supreme Court's dismissal of an appeal against the CEGAT's judgment. The court noted that while the dismissal of an SLP without reasons does not amount to a merger, the dismissal of an appeal under Section 35L(b) by the Supreme Court would amount to a merger, making the judgment of the CEGAT binding. The court agreed with the CEGAT's reasoning and held that the aluminium grills, dampers, and diffusers manufactured by the petitioner should be classified under Chapter 76 as articles of aluminium.

Conclusion:
The court allowed the petition, quashed the impugned Circular dated 13-9-2000, and restrained the respondents from imposing any excise duty on the grills, diffusers, and dampers manufactured by the petitioner under Tariff Entry 84.15. The court held that these products should be classified under Tariff Entry 76 of the Central Excise Tariff Act, as held by the CEGAT, Bangalore Bench.

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