TaxTMI 
TaxTMI 
1990 (6) TMI 158
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....he issue involved is whether the Air-fan/Blower which is an integral part of a burner which is manufactured by the appellant is liable for excise duty under the Tariff Item 33(2) of the erstwhile Central Excise Tariff. 3. In their Memorandum of Appeal, they state that at the relevant time they were manufacturing different types of boilers. In the oil fired boiler, one oil burner set is fitted, and for every type of oil burner fitted on an oil fired boiler, there is invariably some arrangement for blowing air to support the combustion of the oil. The one type of burner, which is the subject matter of the Collector's order is known as a PF-PAC Oil Burner, which comprises of three parts, viz. (i) burner head/fan unit, (ii) oil heading & pumping unit, (iii) Control penal. The part of burner head/fan unit contains air-fan/blower. This is called air-fan/blower because it provides air for combustion of oil. It is not known to the trade or industry and has no distinct name or use. It is not sold in the market as an electric fan or an industrial fan and is not a marketable commodity. That in their own case the Government of India in Revision Application, held that the "air fan is part....
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.... attacked for alleged misstatement. He further referred to the Government of India's Order dated 30-6-1977 where in respect of the same goods it was held that it is not an electric fan or industrial fan. Referring to the opinion given by Dr. J.N. Hate, he stated that the opinion was given after examining the actual working of the burner and found that the oil burner was not an industrial system and would not fit into the description under Tariff Item 33(2) of C.E.T. The Department had placed reliance on the statement of Shri Parmeshwaran who was not an expert, and he had nothing to do with fabrication of oil burners. The department should have on the other hand obtained technical opinion from experts. He referred to a decision of the High Court of Bombay, 1988 (36) E.L.T. 15 (Bom.) in the case of M/s. Voltas Limited and Another v. U.O.I., wherein it was held that: "Fans-Assembly of motor and propeller used in manufacture of air-conditioners and water coolers-Not capable of independent existence and not treatable as electric fans falling under Item 33(3) of Central Excise Tariff," and Para-7 makes a reference to the expert opinion which has been relied upon. In 1986 (25) E.L.T. 6....
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....o. 95/79 dated 1-3-1979. The penalty and fine imposed was not warranted in terms of the Supreme Court's judgment in the case of M/s. Hindustan Steel Ltd. v. State of Orissa [1978 (2) E.L.T. J-159] - No penalty should be imposed for technical or venial breaches of legal provisions. That in respect of other manufacturers no duty was charged and for imposition of penalty on the director, no Show Cause Notice was issued, which was violative of the principles of natural justice. 5. In reply, Shri K.D. Tayal, Ld. S.D.R. dealt with the decision relied upon by the appellant viz. M/s. Stonnac India Ltd. v. Collr. of Central Excise, 1989 (40) E.L.T. 343 (Tribunal). The relevant para-3 was referred which reads as under: - "We have given our earnest consideration to the arguments put forth by both sides. Item 33(2) of the tariff applied to industrial fans. Had the appellants first assembled an industrial fan and then removed it and fitted it inside the drier chamber, there is no doubt that the said fan would have been chargeable to duty on its removal for a captive consumption. But we are informed that the facts were not so. No blower/fan was assembled outside first and then removed a....
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....aman Manufacturers Pvt. Ltd. v. Collector of C.E. - on manufacture and excisability of goods assembled out of duty paid parts and components. (v) 1989 (40) E.L.T. 276 (S.C.) - Collector of Central Excise v. Chemphar Drugs & Liniments - is not applicable, as the decision of the Supreme Court is with reference to Section 11-A and not to Rule 9. That it was the responsibility of the appellant under SRP to file classification list correctly of all goods manufactured by them. (vi) 1984 (16) E.L.T. 148 (Tribunal) (vii) 1989 (40) E.L.T. 214 (S.C.) - M/s. Jaishri Engg. Co. (P) Ltd. v. Collector of Central Excise - The relevant para was para-10. The visit by the department was no reason for the appellant not to truly and properly describe the goods. (viii) 1989 (39) E.L.T. 113 (Tribunal) - Collector of Central Excise v. Wipro Information Technology Limited, para-5. The value of the Blower has been discussed by the Collector in Para-22 of the order, and the Ld. S.D.R. reiterated the Collector's findings. In reply to the appellants' contention for application of Notification No. 95/79 dated 01-03-1979, the Ld. SDR referred to Para-25 of the Collector's order that procedure unde....
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.... G.O.I., has held in the case of M/s. Nestler Boiler that Air-fan is not classifiable under T.I. 33(2) will not withstand as no detailed reasons have been given while in the other decisions the applicability of T.I. 33(2) has been upheld on the guidelines issued under the B.T.N. The BTN description under Heading 84.11 (C) is as follows: - 84.11 (C) - "Fans and Blowers. - These machines while may be fitted with integral motors or not, are designed either for large volumes of air or gas at relatively low pressure or merely for creating a movement of the surrounding air .......Compressors, air pumps, fans, blowers, etc., specially constructed for use with other machines remain classified in this heading and not as spare parts of such other machines." Similar guidelines are given in the HSN under Chapter 84.14. Therefore, with decisions on the air-fan/blower being not similar, one has to go strictly on the merits. The parts that go into the manufacture of a blower on verification by the department are: Electric Motor, Motor Stand, Impeller, Blower Casing, Air-Cone, Aluminium Air Regulator with hydraulic rain, M.S. Sq. Ring and Roschin below, and the function of the Blower in an O....
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....ceeded to decide on merits. The Certificate referred to has been seen by us which opines the function and nature of the products and their nexus with each other. The technical opinion is necessary only to make more clear the technical aspects in order to help decide the classification, and it is for the department to arrive at the correct classification. 7. Coming now to the point of limitation, the extended period has been invoked under Section 11-A, and the appellants have been charged with suppression of facts. The Show Cause Notice is dated 28-01-1984 invoking the extended period for removal of goods from 1-8-1978 to 27-6-1983 and on 3-7-1980, 23-10-1980 and 14-11-1982, the appellants plead that classification lists were filed by them specially for boilers, burners, accessories, components and spares under T.I. 68 for the period 1980, 1981, 1982 and 1983 and have also filed declaration for the purpose of claiming exemption, where they have mentioned "Blower Assemblies" and they were duly approved by the excise officers. There was no suppression of facts and they are covered by the various decisions of the appellate courts and Supreme Court quoted supra. There is considerable....
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....f Rs. 25,000/-. The Collector's finding is that the appellant illicitly manufactured and removed the Air-Blowers without payment of duty in contravention of the provisions of the Central Excises and Salt Act and, therefore, the 16 blowers seized from the possession of the appellant are liable for confiscation. Now that it has been held that no wilful suppression was involved, the 16 blowers in the finishing room and not cleared are only liable for payment of duty and not confiscation as no offence of clandestine removal is involved and, therefore, the confiscation and fine are set aside. The penalty of Rs. 50,000/- is not liable as no wilful suppression has been proved. The plea of the appellant of extending the exemption Notification No. 95/79 is not considered as the Collector has in his findings rightly pointed that the procedures for availment of such benefits have not been followed. In effect the appeal is allowed to the extent admissible as specified above but otherwise rejected. 10. In the Collector's Order-in-Original No. 13/MP/85 dated 27-6-1985 on the issue of classification of the air-blower and alleged possession of 16 blowers which have been confiscated, the Collect....