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Issues: Whether regulators supplied with ceiling fans of sweep below 107 cm were to be assessed separately at 15% ad valorem under Sr. No. 3 sub-item (3) of Notification No. 46/84-C.E. dated 1-3-1984, or whether they formed part of the fan and were assessable at the rate applicable to the fan under Sr. No. 2 sub-item (3)(a).
Analysis: The notification prescribed separate rates for ceiling fans and for regulators, but the dispute arose only where regulators were supplied along with the fan and the fan price included the regulator value. The earlier tariff amendment and the consistent understanding reflected in prior decisions and technical material showed that a regulator was treated as an integral part of an electric fan and the fan was not complete without it. The separate rate for regulators in the notification was therefore intended to cover the situation where a regulator was sold independently of a fan, not where it accompanied the fan as part of a composite sale.
Conclusion: The separate rate of 15% ad valorem for regulators applied only when the regulator was sold without an electric fan. When supplied along with the fan, the regulator had to be assessed with the fan at the applicable fan rate.
Final Conclusion: The appeal succeeded and the impugned order was set aside, with the assessment directed to proceed on the footing that the regulator followed the fan when sold together with it.
Ratio Decidendi: Where a regulator is an integral part of a ceiling fan and is supplied and valued with the fan, it is assessable at the rate applicable to the fan; a separate rate for regulators applies only to independent sale of the regulator.
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