2004 (9) TMI 252 - AT - Central Excise

CESTAT: Vapour Absorption Unit Classified as Refrigerating Equipment

The Appellate Tribunal CESTAT, Mumbai, ruled on the classification of a vapour absorption unit, determining it should be classified as refrigerating ... Heat pump Issues: Classification of vapour absorption unit under Chapter Heading 8418 of CETA vs. 8415.In this judgment by the Appellate Tribunal CESTAT, Mumbai, the issue at hand is the classification of a vapour absorption unit manufactured by the respondent. The appeal was filed by Revenue against the order of Commissioner (A) who classified the product under Chapter Heading 8418 of CETA, contrary to the lower adjudicating authority's classification under 8415. The key contention revolves around whether the product should be considered a heat pump or refrigerating equipment.The respondents claimed classification of the vapour absorption unit as a heat pump seeking exemption under Notification No. 155/86 dated 1-3-1986. The Assistant Commissioner denied the exemption, classifying the product under 8415 for air-conditioning equipment. The Commissioner (A) held that the product is a complete absorption type of heat pump, producing chilled water for various applications, and thus should be classified under 8418 as refrigerating or freezing machinery.The Revenue argued that for goods to be classified as a refrigerating appliance under 8418, the active cooling agent's temperature should be around 0^0C or less. They contended that the product's cooling temperature of 7^0C and the absence of specific mention of 'Lithium Bromide solution as absorbent' in Chapter Heading 8418 disqualify it from falling under this category.The Tribunal analyzed the technical aspects of the product, noting that a heat pump is equipped with a generator, condenser, and evaporator, capable of producing chilled water and hot water. The Tribunal emphasized that even if the product is not considered a heat pump, it qualifies as refrigerating equipment under 8418 due to its characteristics and capabilities.Referring to previous decisions, the Tribunal cited the case of Carrier Aircon Ltd. v. CCE, Delhi, where a chiller was classified under 8418 as refrigerating equipment, not under 8415 for air-conditioning equipment. Following this precedent, the Tribunal concluded that the vapour absorption unit should be classified as refrigerating equipment under Chapter Heading 8418, rejecting the Revenue's appeal.The Tribunal highlighted that the specific benefit of exemption under Notification No. 155/86 was not explicitly addressed, as the product's classification as a heat pump or refrigerating equipment determines the applicable duty rates. Ultimately, the Tribunal upheld the classification of the vapour absorption unit under 8418 and dismissed the Revenue's appeal.