Exemption for refrigerating machinery turns on actual cooling function, and a fresh ground beyond the show cause notice cannot sustain an order.

Exemption under Notification No. 155/86 depended on whether the equipment functioned as refrigerating machinery achieving freezing or near-freezing temperatures. An ammonia condenser used only to chill water to about 8 C was treated as outside the exclusion for air-conditioning or true refrigeration, and the exemption was available. An appellate order could not be sustained where it rested on a new thermodynamic-process basis not raised in the show cause notice or supported by the original dispute; the order was therefore set aside with consequential relief.

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Issues: (i) Whether the ammonia condenser used for chilling water was entitled to the benefit of Notification No. 155/86 dated 1-3-1986. (ii) Whether the appellate order could be sustained when it proceeded on a ground not raised in the show cause notice.

Issue (i): Whether the ammonia condenser used for chilling water was entitled to the benefit of Notification No. 155/86 dated 1-3-1986.

Analysis: The applicable distinction was between refrigerating machinery achieving freezing or near-freezing temperatures and equipment that merely chills water. The product in question was used only to bring water down to about 8 C and was not an air-conditioner. On that basis, it was not excluded from the scope of the exemption claimed under Notification No. 155/86.

Conclusion: The benefit of Notification No. 155/86 was available to the appellant.

Issue (ii): Whether the appellate order could be sustained when it proceeded on a ground not raised in the show cause notice.

Analysis: The finding that the condenser did not perform cooling by a thermodynamic process was not part of the original dispute. The appellate authority introduced a fresh basis without supporting material or reasoning, thereby travelling beyond the show cause notice and the issues before the lower authority.

Conclusion: The appellate order could not be sustained on that ground.

Final Conclusion: The impugned order was set aside and the appellant was held entitled to the exemption and consequential relief.

Ratio Decidendi: An exemption for refrigerating machinery turns on whether the equipment achieves refrigerating temperatures, and an order cannot be sustained on a ground not contained in the show cause notice.

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