TaxTMI 
TaxTMI 
2006 (8) TMI 27
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....tities given/determined by the customers. 1.4 The assessee had claimed exemption under Notification No. 22/2000- CE 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 the year 2000-2001 whether they were filed to amend or supercede the earlier declarations. The notice relied on the following documents to hold that Air- Conditioning Mac....
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....p; What it contains A) 'Kit fit on cab' (1) Climate Box Assembly a) Expansion Valve &....
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....bsp; g) Receiver Drier (3) Control Panel Assembly h) Control Panel (4) Pipe Assembly i) Three pipes &nb....
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....efrigerant from the condenser assembly to the evaporator. Second pipe transports refrigerant in gaseous form from evaporator to the compressor. The third pipe connects compressor and evaporator. Functions of various parts of Air-conditioning machine in a car. The Refrigerant in gaseous form is received in the compressor through a pipe. At this stage, the refrigerant is in gaseous form and low in pressure and relatively high in temperature. In the compressor, the low pressure vapour is compressed into high pressure gas by applying pressure. The compressed refrigerant is under high pressure. though in gaseous state. The Compressed refrigerant is transported through a pipe to the condenser. A fan blows fresh air across the condenser fins. The heat in the refrigerant gets blown away thereby cooling the refrigerant. In the process, the refrigerant in gaseous form becomes a liquid, due to loss of heat. The pressure continues to be the same. This liquid refrigerant which is still under high pressure is transported to a receiver-driver where the refrigerant is dried and filtered. Thereafter, the dried and Filtered refrigerant in liquid condition and high pressure is transported....
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....ed in the very same condition to the customers in which they were imported. The Appellants were issuing registered dealer invoices as the first stage dealer of imported goods to enable customer to take Modvat Credit of duty paid on such imported Compressors. After August 2000, the Appellants carried a small activity on the imported compressors at the request of TELCO. The Appellants removed 2 bolts from the compressor and installed/fixed 2 studs in their place. This was solely to enable for easy fitting of the compressor on the engine by the customer at the time of assembly of the car. Thus apart from this activity the same imported compressor was supplied to the customers. The process of removing bolt and replacing them with studs will not amount to manufacture of a new commodity as the Product continues to be a compressor only. Though the invoices were issued by the Appellants under Rule 52A, it only indicates that the imported compressors were removed as such in terms of Rule 57F (3) as it stood prior to 1.4.2000 and under Rule 57AC (5), as it stood after 1.4.2000. Thus, throughout the period of dispute, the Appellants were only trading in compressors. At no point of time the Ap....
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.... pier if at all, an Air Conditioning system in its entity comes into existence; it is in an automobile fully assembled & ready for clearance as on Automobile No Air Conditioning Machine independently comes into existence. The duty demands on Air-Conditioning Machine which independently will never come into existence, at the assessee's premises or in the buyers premises (where only an Air Caiditioning System for an automobile came into being), Duty demands an Air Conditioning Machines, complete or having essential character acquired will not be called for in this case. The Ld. Advocate relied upon & took us through a book 'Motor Vehicle Technology for Machines' (By PPJ road & VC reid by Mc Millan Texts for industries vocational & Technical Education call No.6292 (052) of British Council), especially the chapter on Car Air Conditioning to demonstrate that a motor never is independently a part of an Automobile Air Conditioning System & the system functions on the Car Motor by a belt Drive. On perusal, it could be concluded that an Air Condition Machine with its own Motor never comes to an existence in an Automobile therefore by application of. Board's instructions dt. 25.9.02 (s....