Air-conditioning use not proved for compressor model, so concessional treatment for water-cooler manufacture remained available.

Compressor Model SR 522 was not proved to be a compressor of the kind used in air-conditioning, so it did not fall outside the concessional treatment available to gas compressors used in water-cooler manufacture under Notification No. 166/86-C.E. The fact that some customers may have used the compressor in air-conditioners showed only a possible use, not that the goods were inherently of that kind. The brochure reference was insufficient to override the technical and functional evidence, including long-standing use in water-cooler manufacture, identical captive and cleared models, unsuccessful trials for air-conditioning, and supporting statements from company officers. Differential duty was therefore not payable.

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Issues: Whether Compressor Model SR 522 was a compressor of the kind used in air-conditioning and therefore outside the concessional treatment available to gas compressors used in the manufacture of water coolers under Notification No. 166/86-C.E. dated 1-3-1986.

Analysis: The compressors were admittedly used in the appellants' water-cooler manufacture since 1965, and the department did not dispute that the captively consumed and the cleared compressors were the same model. The attempted use in air-conditioners by the appellants was unsuccessful, and the departmental evidence based on customer use did not show that the appellants sold the compressors knowing that they were meant for air-conditioning. Use by some customers for air-conditioning could at best show a possible use, not that the compressors were of the kind used in air-conditioning. The brochure reference was not sufficient to displace the actual technical and functional evidence, including the appellants' failed trials and the statements of their officers.

Conclusion: The compressor was not proved to be a compressor of the kind used in air-conditioning, and the differential duty was not payable.

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