TaxTMI 
TaxTMI 
2022 (2) TMI 1537
X X X X Extracts X X X X
X X X X Extracts X X X X
....d to the assessing group for verification of the self-assessment. On verification of the Bill-of-Entry, it came to be noticed that the goods falling in serial numbers 4 and 8 of the impugned Bill-of-Entry are 'Split Air Conditioners of 2 Ton capacity'. In the rest of the serial numbers, the goods were air conditioners of less than 2 ton capacity. 3. The Adjudicating Authority was of the view that the goods under Sl. Nos. 4 and 8 being split air conditioners of 2 ton capacity, cannot be classified under CTH 8415 10 10 and have to be classified under CTH 8415 82 10; that these items are not eligible for the benefit of exemption provided under Notification No. 85/2004-Cus. Aggrieved by such assessment order passed by the Adjudicating Authority, the appellant filed appeal before the Commissioner (Appeals). The view of the Adjudicating Authority that the goods are classifiable under CTH 8415 82 10 was upheld by the Commissioner (Appeals) vide order impugned herein. Aggrieved by such order, the appellant is now before the Tribunal. 4.1 Shri V. Lakshmikumaran, Learned Senior Counsel, appeared and argued on behalf of the appellant. He submitted that the appellant imported various mod....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... not appreciate the fact that in the Customs Tariff Heading the terms "system" and "air conditioner" are interchangeably used to mean air conditioners. This is evident from the fact that the HSN Sub-Heading Explanatory Notes specifically state that "split system type air conditioners are ductless and utilize separate evaporator for each area to be air conditioned (e.g., each room)." 4.4 He relied on the decision of the Tribunal in the case of M/s. Daikin Air-Conditioning India P. Ltd. v. Pr. Commr. of Cus. (NS-I), JNCH, Nhava Sheva, Raigad reported in 2020 (374) E.L.T. 768 (Tri.-Mumbai). However, Learned Senior Counsel for the appellant was fair enough to submit that an appeal has been filed by the Department against the above order of the Tribunal before the Hon'ble Supreme Court, which is pending as reported in 2021 (377) E.L.T. A88 (S.C.). 4.5 He urged that the split air conditioners of capacity 2 ton and above, which do not satisfy, firstly, the one evaporator and one condenser requirement and secondly, heat reversal valve i.e., multi-split air conditioners which are not equipped with heat reversal valves but incorporating only cooling units will be classified under CTH 8....
X X X X Extracts X X X X
X X X X Extracts X X X X
....18 (13) G.S.T.L. 334 (Tri.-Chennai)]; Civil Appeal pending before the Hon'ble Supreme Court [2018 (18) G.S.T.L. J219 (S.C.)] (iii) Commr. of Cus. (Import), Mumbai v. M/s. Reliance Jio Infocom Ltd. [2019 (369) E.L.T.1713 (Tri.-Mumbai)] 4.8 It was pointed out by the Learned Senior Counsel for the appellant that in the case of M/s. ETA General Pvt. Ltd. v. Commissioner of Customs, Chennai-II reported in 2016 (341) E.L.T. 140 (Tri-Chennai) the very same issue of classification of split type air conditioners of 2 ton capacity came up for consideration. The Tribunal in the said case held that the goods cannot be classified under CTH 8415 10 10 and have to be correctly classified under CTH 8415 83 10. The Tribunal in the said case has given more importance to the General Rule of Interpretation that when there is a specific entry, the same excludes a general entry. It was observed by the Tribunal in the said case that the price of an air conditioner depends upon its tonnage capacity and that a buyer of split air conditioner would approach the seller with a clear requirement of tonnage capacity. The trade knows the goods by their tonnage capacity in common parlance. It was there....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... -Of a kind used for persons in motor vehicles 8415 20 10 ---For buses u 10% - 8415 20 90 ---Other u 10% - -Other 8415 81 --Incorporating a refrigerating unit and a valve for reversal of the cooling or heat cycle (reversible heat pumps) 8415 81 10 ---Split air-conditioner two tonnes and above u 10% - 8415 81 90 ---Other u 10% - 8415 82 --Other, incorporating a refrigerating unit 8415 82 10 ---Split air-conditioner two tonnes and above u 10% - 8415 82 90 ---Other u 10% - 8415 83 --Not incorporating a refrigerating unit 8415 83 10 ---Split air-conditioner two tonnes and above u 10% - 8415 83 90 ---Other u 10% - 8415 90 0 -Parts Kg. 10% - 9.1 The Learned Senior Counsel for the appellant has drawn our attention to the Customs Tariff Act prior to the disputed period so as to bring to light how the Tariff Heading 8415 10 10 has evolved on the basis of the HSN Explanatory No....
X X X X Extracts X X X X
X X X X Extracts X X X X
....- Parts This heading covers certain apparatus for maintaining required conditions of temperature and humidity in closed spaces. The machines may also comprise elements for the purification of air. They are also used for air conditioning offices, homes, public halls, ships, motor vehicles, etc., and also in certain industrial installations requiring special atmospheric conditions (e.g., in the textile, paper, tobacco or food industries). The heading applies only to machines : (1) Equipped with a motor-driven fan or blower, and (2) Designed to change both the temperature (a heating or cooling element or both) and the humidity (a humidifying or drying element or both) of air, and (3) For which the elements mentioned in (1) and (2) are presented together In these machines the elements for humidifying or drying the air may be separate from those for heating or cooling it. However, certain types incorporate only a single unit which changes both the temperature and, by condensation, the humidity of the air. These air conditioning machines cool and dry (by condensation of water vapour on a cold coil) the air of the room in which they are installed or,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dered Classification rationale 1. . . . .... 13. A split-system air conditioning machine consisting of: (i) An indoor unit comprising a heat exchanger and a motor driven fan contained in a single housing designed to be suspended from the ceiling; and (ii) An outdoor unit comprising refrigerant type compressor and condenser with motorized fan in a single housing Both units are designed to be connected to each other by electrical wiring and copper tubing. 8415.10 GIRs 1 and 6 13.1 According to the appellant, the split air conditioner system imported by them is ductless and therefore, the HSN Explanatory Notes to Sub-Heading 8415.10 would apply and the said goods have to be classified under CTH 8415 10 10, even though of 2 ton capacity. They have relied on the decision of the Tribunal in the case of M/s. Daikin Air-Conditioning India P. Ltd. (supra) wherein the Tribunal has analysed the issue of classification of the very same type of goods namely, split air conditioners, ductless, imported from Thailand. The Tribunal in the said case, after adverting to the Tariff Headings and the HSN Explan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der the residuary branch of dichotomy is not the normal cooling system but a special feature. This aspect appears to have been lost sight of in the impugned order prompted, probably, by the intent to proceed directly to an ostensibly conforming description. The additional feature, whose presence or absence, determines the sub-heading within the residuary category, has not been established as incorporated in the impugned goods. In the absence of such, customs authorities are not enabled to proceed to the tariff item below the sub-heading. The impugned order is flawed for that reason. 14. The classification declared by the appellant at the time of import corresponds to the description of 'split system' and the scope of 'split system' is elaborated in the sub-heading notes in the Explanatory Notes to the Harmonised System of Nomenclature. From this, it can be inferred that the description corresponding to sub-heading 8415 10 is intended for 'window' and 'split system' air-conditioning machines. In this dispute, we are not concerned with the former and it merely suffices to note that the residuary description, corresponding to Tariff Item No. 8415 10 90, would cover all 'windo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oning India P. Ltd. (supra) to hold that the goods being ductless type of split air conditioners, they fall under CTH 8415 10 10. 14. The Department has placed reliance on another decision of the Division Bench of the Tribunal in the case of M/s. ETA General Pvt. Ltd. (supra). On perusal of the first paragraph of this decision, it can be seen that the goods in question are split air conditioners-ductless. Though the Tribunal, in this case, referred to the HSN Explanatory Notes, has given more importance to the description of the goods on the basis of tonnage capacity. It was held that since CTH 8415 83 10 takes in 'split air-conditioner two tonnes and above' and there being a specific entry on the basis of tonnage capacity, this specific entry would apply. The Division Bench of the Tribunal in this case relied on the decision of the Hon'ble Apex Court in the case of M/s. Moorco (India) Ltd. v. Collector of Customs, Madras [1994 (74) E.L.T. 5 (S.C.)] to hold that when there is a specific entry, the same would exclude a general entry. The relevance and application of the HSN Explanatory Notes to Sub-Heading 8415.10 was not considered. The relevant paragraphs of the order are as un....