Cooling capacity computation under exemption rules turned on deducting power input before testing concessional duty eligibility.

For package air-conditioners claiming exemption, condenser-side cooling capacity had to be assessed by reference to the IS specification, which expressly contemplated deduction of the equipment's total power input. The earlier computation did not properly address that deduction, and the technical material showed it could affect whether the units crossed the 7.5 tonne threshold for concessional duty. The existing findings were therefore treated as inadequate for a final exemption decision, the order was set aside, and the matter was remanded for fresh determination on the corrected computation and eligibility under the notification.

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Issues: Whether, for determining the cooling capacity of package air-conditioners under the exemption notification, the condenser-side calculation had to deduct the total power input to the equipment, and whether the matter should be remanded for fresh technical determination of eligibility to concessional duty.

Analysis: The record showed that the assessee's own quality control reports and statements indicated that cooling capacity was being calculated from test data. However, the IS specification relied upon for condenser-side calculation expressly contemplated deduction of the total power input to the equipment. The earlier calculations placed before the adjudicating authority did not properly address this aspect, and the technical material showed that the deduction could materially affect whether the units crossed the 7.5 tonne threshold. In these circumstances, the existing findings were held insufficient for a final determination on exemption eligibility.

Conclusion: The impugned order was set aside and the matter was remanded for fresh decision on whether power input had to be deducted and, if so, whether the revised computation brought the air-conditioners within the concessional limit. The assessee was held entitled to the benefit of the notification if the corrected computation showed capacity below 7.5 tonnes.

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