Classification of separately cleared fan regulators and approved classification lists barred differential duty recovery.

Fan regulators cleared separately were treated as accessories of fans and classified under sub-heading 8414.99 rather than 8414.20, because the tariff entry for parts and accessories governed the goods independently of a circular dealing with regulators supplied with the principal machine. The demand for differential duty was also unsustainable where the goods had been cleared on the basis of an approved classification list, since the approved position could not be displaced to create short levy on those facts. The note states that a circular on goods supplied with the main machine does not control separately cleared accessories, and that approved classification can protect clearances from differential recovery.

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Issues: (i) Whether fan regulators are classifiable under sub-heading 8414.20 or under sub-heading 8414.99 of the Central Excise Tariff Act; (ii) Whether the demand for differential duty was sustainable when the classification list had been approved by the Department.

Issue (i): Classification depended on the tariff scheme for parts and accessories under heading 8414 and on the scope of the Board's circular, which addressed fan regulators when presented with fans and not as independent clearances. The applicable tariff entry for parts and accessories of fans was therefore examined independently of the circular.

Conclusion: Fan regulators manufactured and cleared separately were classifiable under sub-heading 8414.99 as accessories of fans, not under sub-heading 8414.20.

Issue (ii): Once the assessee had cleared goods on the basis of an approved classification list, the approved position could not be displaced to fasten differential duty, in view of the principle that such clearances do not result in short levy in the circumstances considered.

Conclusion: The demand for differential duty was not sustainable.

Final Conclusion: The classification issue was decided against the assessee, but the duty demand failed because the approved classification list protected the clearances from differential recovery.

Ratio Decidendi: A departmental circular governing classification of goods supplied with the principal machine does not control the classification of separately cleared accessories, and differential duty cannot be sustained where clearances were made on an approved classification list.

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