HVAC duct classification favoured tariff heading for ventilation systems, making the excise demand unsustainable.

Fabricated ducts made from G.I. sheets and used in HVAC systems were treated as part of the ventilation and air-conditioning system, so they were classifiable under sub-heading 7308.50 of the Central Excise Tariff rather than as hollow profiles under sub-heading 7304.10. The Tribunal applied earlier decisions on similar ducts and held that the classification under the HVAC-related heading, carrying NIL duty, prevailed; accordingly, the duty demand was unsustainable and the appeal was allowed with consequential relief.

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Issues: Whether fabricated ducts used in HVAC systems were classifiable under sub-heading 7308.50 of the Central Excise Tariff Act, 1985 or under sub-heading 7304.10, and whether the demand of duty was sustainable.

Analysis: The item in dispute was ducts manufactured from G.I. sheets and used as part of the HVAC system. The Tribunal followed earlier decisions holding that ducts of this nature are to be treated as part of the ventilation/air-conditioning system and classifiable under sub-heading 7308.50, which carries NIL rate of duty. In that view, the Commissioner's classification of the goods as hollow profiles under sub-heading 7304.10 was not accepted, and the duty demand could not survive.

Conclusion: The ducts were held classifiable under sub-heading 7308.50 and not under sub-heading 7304.10; the demand was unsustainable and the appeal was allowed with consequential relief.

Ratio Decidendi: Ducts forming part of an HVAC/ventilation system are classifiable under the tariff heading for such systems rather than as hollow profiles, and where the applicable heading carries NIL duty, the demand cannot be sustained.

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