TaxTMI 
TaxTMI 
2020 (10) TMI 398
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....April 2016 and 9th August 2016 that were adjudicated by common order-in-original no. 30/2017-18/Commr/NS-V/CAC/JNCH dated 12th July 2017 of Commissioner of Customs (NS-V), Jawaharlal Nehru Custom House, Nhava Sheva that is impugned before us. 2. In the bills of entry pertaining to the live consignments, several model variants of air-conditioners, valued at Rs. 55,71,557, the benefit of notification no. 85/2004-Cus dated 31st August 2004 (at sl no. 49), exempting all goods under tariff item no. 84151010 of First Schedule to Customs Tariff Act, 1975, was claimed. The notice alleges that the goods had been wrongly classified to avail of the exemption to which they were not entitled as the claimed classification was intended to cover only 'self-contained' or 'split' units that are 'window' or 'wall' mounted with only cooling capability while the goods under import were either 'wall' mounted 'split' units performing dual functions of heating and cooling or were 'ceiling mounted' or 'ducted' for which tariff item no. 84158110, 84158190, 84158210, 84158290 and 84158390 of First Schedule to Customs Tariff Act, 1975 are more appropriate. 3. Of the two notices adjudicated in the impugn....
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....ypes, self-contained or "split system"' corresponding to sub-heading no. 841510 (at six digit level) of the First Schedule to Customs Tariff Act, 1975, 'split air-conditioner two tonnes and above' are descriptions found corresponding to tariff item no. 84158110, 84158210 and 84158310 of the First Schedule to Customs Tariff Act, 1975 with the residuary described as 'others' in tariff item no. 84158190, 84158290 and 84158390 of the First Schedule to Customs Tariff Act, 1975. These first and last pairs of descriptive dichotomies are placed under the description 'incorporating a refrigerant unit ...' and 'not incorporating a refrigerant unit' correspond to sub-heading no. 841581 and 841583 (at the six digit level) distinguishing the two unambiguously while the description of the former is qualified with '....and a valve for reversal of the cooling or heat cycle (reversible heat pump)' to distinguish from the pair occurring between that restrictedly described as 'incorporating a refrigerant unit' corresponding to sub-heading no. 841582 (at the six digit level). In the framework of the present dispute, tariff item no. 84159090 of the First Schedule to Customs Tariff Act, 1975 and sub-hea....
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....lly refers to 'split air-conditioner' against tariff item no. 84158110 or 84158190 of the First Schedule to Customs Tariff Act, 1975. 8. Learned Authorized Representative also points out the appellant could not, by any stretch of imagination, have sought to classify 'ceiling mounted split systems' or the 'ceiling suspended split systems' under heading no. 84151010 of First Schedule to Customs Tariff Act, 1975 which corresponds only to 'wall' or 'window' in the description besides the further infirmity of having incorporated options for heating and cooling. According to him, the obvious presence of 'refrigerating unit' would require classification within the descriptions under sub-heading no. 841581, or 841582, of the First Schedule to the Customs Act, 1975 contingent upon the presence of 'heat pump' and the cooling capacity. He also directed our attention to the inference, derived by the adjudicating authority from the amendment effected, by Finance Act, 2006, in sub-heading no. 841510 of First Schedule to Customs Tariff Act, 1975 for coverage of 'ceiling' and 'floor' in addition to 'window' and 'wall' existing therein, that it was clearly not intended to include these under tha....
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....8 (Bom)] and of the Hon'ble Supreme Court in Commissioner of Customs (Preventive) v. Afloat Textiles (I) P Ltd [2009 (235) ELT 587 (SC)] to support this contention. 14. The argument of Revenue that the expansion of the description corresponding to tariff item no. 84151010 of the First Schedule to Customs Tariff Act, 1975, by Finance Act, 2016 is demonstrative of legislative intent to classify 'ceiling mounted' and 'ceiling suspended' air-conditioning units in other sub-headings does not find favour with us. That would have been acceptable had the shift been overtly from another sub-heading. The tariff was designed in 1975 and was not intended to specify ever item of international trade. The descriptions were formulated to articulate general characteristics of each cluster of sub-headings within the logical structuring of the several articles. It cannot be the case of Revenue that the technology of air-conditioning had ventured beyond the simple 'window' or the rudimentary 'split' type in the early 1970s. The economic empowerment of a large segment of the population residing in the tropics with its consequence in terms of leap in demand for air-conditioning equipment has had its ....
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.... Schedule to Customs Tariff Act, 1975 from levy of basic customs duty. The adjudicating authority appears to have accepted the convenience of 'ready fitting' descriptions at the eight digit level of tariff items to be in consonance with the mandate of rule 3 of General Rules for Interpretation which alludes to the most specific description being preferable to a general description. The primary influence was the availability of heating and cooling options in the wall mounted type and the location of the indoor unit on the ceiling which, according to him, rendered tariff items under sub-heading no. 841581, 841582 and 841583 to be more apt. and, thereby, the eligibility for notification was excluded. A question that arises in this context of denial of the exemption is the justifiable cause to exclude some variants of 'air-conditioners' from that privilege. The exemption is in pursuance of a bilateral international agreement which, by no stretch, has deliberated only on 'air conditioners' for such narrow coverage. For that is the purport of the proceedings before the adjudicating authority: denial of the exemption as being ineligible by mutual agreement between two sovereign authoritie....
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....n 'refrigerating unit' is not defined, it cannot be supposed that it refers to the 'cooling unit' for if it did, the first heading would have no place within the description of 'air conditioning machines'. It, therefore, is intended for some component other than the normal cooling facility built into all 'air conditioning machines' and, by not subjecting that expression to the test of existence in the impugned goods, the show cause notice has tripped upon itself in its haste to carry the impugned goods beyond the scope of eligibility for the exemption notification. The applicability of sub-heading no. 841581, 841582 and 841583 to the impugned goods lacks substance. 19. The impugned goods are not 'window' type but they are all of the 'split' type with an external condenser unit and an indoor evaporator unit. In the Explanatory Notes to the Harmonized System of Nomenclature pertaining to sub-heading no. 841510, we find no qualifying characteristic that restricts the adoption thereof to 'cooling facility' alone; neither is there any capacity qualification included therein. The existence of such under a parallel hierarchy in the residual category within the four-digit level cannot b....