Evaporator classification under Rule 56C turns on the actual tariff description and the basis stated in the notice.

Copper coil performing the heat-exchange function was treated as the evaporator, while the steel tank was only a receptacle, so the department's attempt to classify the entire tank-and-coil assembly as an evaporator was rejected. The analysis also notes that a cooling unit classification under Item 29A(3) was a different basis from the one alleged in the notice, and the department could not deny Rule 56C on a fresh classification theory not put forward earlier. Rule 56C was stated to apply only where the goods received by the primary manufacturer in fact fell under Item 68; otherwise duty lay on the actual manufacturer, not the receiver.

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Issues: Whether the copper coil alone, and not the tank-and-coil assembly, constituted the evaporator for the purposes of classification and Rule 56C; and whether, if the goods did not fall under Item 68, duty could be fastened on the appellant under Rule 56C.

Analysis: The evaporator, in technical and standard-reference usage, is the part of the refrigerating system in which the refrigerant vaporises to produce refrigeration. On that basis, the copper tube or coil performing the heat-exchange function answered the description of the evaporator, while the steel tank was only a receptacle. The department's attempt to treat the entire tank-and-coil assembly as an evaporator was therefore rejected. Although the assembly could be regarded as a cooling unit falling under Item 29A(3), that was a different case from the one set out in the notice and the order, which proceeded on the footing that the assembly was an evaporator. The department could not deny the benefit of Rule 56C on a fresh basis not put forward in the notice. In any event, Rule 56C applied only if the goods received by the primary manufacturer fell under Item 68; if they did not, the rule did not apply at all and duty would be payable by the actual manufacturer, not the appellant who received the goods.

Conclusion: The appellant succeeded on merits; the goods were not to be treated as an evaporator comprising the tank-and-coil assembly, and duty could not be demanded from the appellant under Rule 56C.

Final Conclusion: The demand and penalty could not be sustained, and the appellant obtained consequential relief.

Ratio Decidendi: For Rule 56C to operate, the goods received must in fact answer the tariff description on which the rule is predicated, and a demand cannot be upheld on a new classification basis not made out in the notice or order.

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