TaxTMI 
TaxTMI 
2006 (8) TMI 427
X X X X Extracts X X X X
X X X X Extracts X X X X
....ement of the manufacture to their factory, were getting orders for the individual parts described on the purchase orders with delivery Schedules for individual entities given/determined by the customers. 1.4 The assessee had claimed exemption under notification No. 22/2000-C.E., dated 6-3-2000 as available to parts of Air Conditioning Machines. They were issued a notice, seeking as to why the said exemption not be denied & duty recovered under the proviso to section 11A of the Act with penalty under Section 11AC along with interest under Section 11AB for the clearance, effected, during the period 7-3-2000 to 22-9-2001 on the grounds that the said clearances effected was to be classified as Complete Air-conditioning Machine by virtue of Rule 2(a) & note 4 to Section XVI. As these were to be considered as complete Air Conditioning Machine the clearances were not entitled to the exemption under Notification 22/2000. The notice alleged suppression of facts with intent to evade payment of duty on the ground that the assessee misled the Department by deliberate use of unique terminology to describe the goods and deliberately not indicating on the classification declaration for th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... appellants is not disputed. Climate Box Assembly is a moulded plastic part which would contain an Expansion Valve, a Blower, an Evaporator and a Duct Installation duly fitted/mounted together. Following explains the position in this regards :- Nomenclature used by Telco/M&M What it contains ? (A) 'Kit fit on cab? (1) Climate Box Assembly (a) Expansion Valve (b) Blower (c) Evaporator (d) Duct Installation (2) Condenser Assembly (e) Fan (f) Condenser (g) Receiver Drier (3) Control Panel Assembly (h) Control Panel (4) Pipe Assembly (i) Three pipes fitted with connector (B) Compressor Assembly (j) Compressor (C) Compressor Mounting Bracket (k) Mounting Bracket Compressor mounting bracket are nothing but simple brackets used for clamping or mounting the compressor on the engine. Compressor assembly is nothing but complete/fully built compressor. This is supplied as a single piece or as one complete/compact unit in the imported condition. 'Kit fit on cab' derives its nomenclature from the fact that the individual items that make up this kit are for fitment on the cabin of the car. The words 'Kit A/c' ar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....omes cool, as the refrigerant inside the Evaporator absorbs the heat from the air blown from the cabin. Thus, refrigerant becomes warm or hot and air from the cabin becomes cool. The Liquid Refrigerant gets converted into gaseous form because of absorption of heat. This cool air is circulated to the interior of the car by means of duct and grills on the instrument panel. The control panel assembly helps in controlling the flow and direction of cool air inside the car. The above cycle continues and in the process the air in the passenger compartment of the vehicle becomes cool. A variant of Air-Conditioning Machine also comes with heater and ventilation. Air-Conditioning machine with Heater circulate hot air inside the passenger compartment of the car wherever needed. This is generally so, when outside temperature is very low. Ventilation provides an inlet for fresh air." 2.3 In the absence of manufacture of Compressor & Motor by the Appellants, the Appellants could not be said to be manufacturing 'complete Air-conditioning Machine' by applying Interpretation Rule 2(a). As Compressor is an essential part of an air-conditioning machine. It is the heart of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he assessee will get the benefit of Boards Circular no. 666/57/2002 CX., dt. 25-9-02, wherein it is stipulated that if an assessable or a kit (even CKD or SKD form) does not have all the six essential elements mentioned therein, then the clearances cannot be considered to be of an entity which can be said to have acquired the essential characteristic of an Air-Conditioning Machine & will have to be classified as parts. From the chart extracted herein above it is seen that there is no Motor contained in the entities cleared Motor also occurs at Sr. No. (iii) & Condenser at Sr. (v) of the list of six essentials, the clearance of the entities therefore sans these essentials only qualifies to be clearance of Parts & not "essential characteristic Acquired Air Conditioning Machine" as per Rule 2(a) of the Rules of Interpretation when Boards circular is applied. 2.4 Manufacture is a pre-condition before section note 4, can be applied since classification cannot precede manufacture under the Central Excise Levy. When manufacture of an Air-conditioning Machine or an essential chargeable Air Conditioning Machine does not arrive as per Boards Circular and only parts having arisen, due....