Classification under Heading 8414.99 supported exemption, as the same goods could not be treated as excluded machinery parts.

Impellers and fan blades classified by the department under Heading 8414.99 were held eligible for exemption under Notification No. 175/86 because the same classification could not then be used to treat them as parts of refrigerating or air-conditioning machinery for the exclusion in S. No. 4(iv) of the Annexure. The prior order of the Collector (Appeals) had also attained finality, as no appeal or cross-objection was filed against it. On that basis, the goods were found not to fall within the exclusion and were entitled to the exemption.

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Issues: Whether impellers and fan blades classifiable under Heading 8414.99 were eligible for exemption under Notification No. 175/86 dated 1-3-1986.

Analysis: The goods were classified by the department under Heading 8414.99, which covers parts and accessories other than those of gas compressors used in refrigerating and air-conditioning appliances and machinery. Having accepted that classification, the department could not, for the purpose of Notification No. 175/86, contend that the same goods were parts of refrigerating or air-conditioning machinery so as to fall within the exclusion in S. No. 4(iv) of the Annexure. The order of the Collector (Appeals) had also attained finality, as no appeal or cross-objection was filed against it.

Conclusion: The goods were not hit by the exclusion in Notification No. 175/86 and were entitled to the exemption. The appeal was allowed in favour of the assessee.

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