Texmo Taro 1 HP Domestic Monoblock Self Priming Pump, TSP 3
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In all these matters, common question of facts and law are involved. Hence, they are taken up together for disposal as per law.
In all these appeals the question that arises for consideration is with regard to the correct classification of Stators and Rotors. The appellants had filed Classification List describing these goods as 'parts suitable for use solely or principally for electric motors falling under Heading The Department had issued show cause notices to the individual appellants calling upon them to show cause as to why their goods namely stators and rotors should not be treated as parts of the compressors falling under The Assistant Collector after observing the principles of natural justice has in texmo pumps models falling impugned orders held that the stators and rotors are parts of compressors and, therefore, they are to be classified under sub-heading He has further confirmed the differential duty in respect of the appellants for different period as noted herein below:.
Collector has observed that a compressor consists of various parts viz. Crank shaft, Stators, Rotors, Valves, Gaskets etc. He has relied upon Note 2 a to Section XVI which lays down that parts which are goods included in any of the headings of Chapter 84 texmo pumps models falling 85 are in all cases to be classified in their respective headings.
He has, therefore, held that since stators and rotors are integral parts of the compressors they are to be classified in the same heading as that of the compressors. He has further held that the stators and rotors in question have no other application except to be fitted in the Hermetically Sealed Compressors and, therefore, they are parts or components which are solely or principally used in the manufacture of Hermetically Sealed Compressors and therefore, as per Note 2 b to Section XVI they will be classified alongwith compressors under Heading He has observed that in the Hermatically Sealed Compressors, the compressor portion is undetachable texmo pumps models falling the motor portion and the entire compressor is to be assessed as an item of machinery rather than as prime mover, i.
He has rejected the contention of the appellants that the classification once decided cannot be reopened and in this context, he has relied on the Tribunal's ruling rendered in the case of Indian Textile Paper Jute v.
Collector of Central Excise as reported in 18 E. He has further held that the certificates of various technical institutions are not binding on him for the purpose of deciding the classification.
He has further held that in the manufacture of Hermetically Sealed Compressor, no article or goods or machinery like electric motors comes into existence and, therefore, there is no question of treating the stators and rotors as parts of motors. Collector has recorded in detail the various arguments put-forth before him and after a due consideration of all the pleadings, he has passed a detail reasoned order rejecting the appellant's contention and hence these appeals. Collector has held that the stators and rotors manufactured by the appellants do not come into the electric motor as an essential texmo pumps models falling.
KBL and there is not a single sale of these rotors and stators to a person who is engaged in the manufacture of electric motors. He has also recorded a question of fact that the stators and rotors are being used in the manufacture of compressors only and not in the manufacture of motors. He has also held that the appellants have not claimed that the rotors texmo pumps models falling stators are used by their customer to manufacture motors and it is then installed in the compressors.
As regards the affidavits and testimonials produced by the appellants, the ld. Collector has observed that these materials with the stators and rotors are used as parts in the manufacture of electric motors and which are texmo pumps models falling used to drive appliances such as gas compressors, monoblock pumps etc. He has held that the department's case all along had been that the motors never come into physical existence and that claim has not been denied by the appellants.
The appellants claim only had been that these two parts functioned together as a motor. Collector has held that the various affidavits and the certificates cannot be relied upon because the motor does not texmo pumps models falling into any physical existence at all. Collector after noting the Explanatory Notes as well as Notes 2 and 3 of Section XVI has observed that Note 2 a is not applicable since the rotors and stators have not been specifically named anywhere in the Central Excise Tariff.
He has held that the reason for not mentioning these two items as parts of texmo pumps models falling electric motors is that these two products can be parts of many other machines or appliances.
The Wankel engine page is one such type of engine and the rotor is an important part of this engine. Collector has held that since the rotors and stators are not specifically named in the Central Excise Tariff, therefore, Section Note 2 has been applied. In this context, the ld. Collector has also dealt with various other points as well as the case law relied by the appellants. Summing up, the ld. In case they are not so specifically included and if they are suitable for use solely or principally with a particular kind of machine, then they are to be classified with that machine.
We have heard Sr. Enterprises, the party has requested the case to be decided on merits. JDR argued by the Revenue. Advocate strenuously argued this case and submitted that the appellants are manufacturing parts for Hermetic Electric Motors and that Hermetic Electric Motors are itself separate goods and therefore, the texmo pumps models falling and stators have to be classified as parts of the electric motors.
It is his argument that in the Trade as well as in Technical Understanding, the parts manufactured by the appellants are for Hermetic Electric Motor, although the said motor might have been utilized in a sealed compressor, yet the function of the rotors and stators are that of a electric motor and not of a compressor.
The compressor is designed in such a way that the common shaft is used for both the compressors and for the working of these two parts viz. In order to buttress his arguments that Hermetic Electric Motors are separate goods.
He has relied texmo pumps models falling an extract from "Principles of Refrigeration" by R. Counsel also submitted that the U. National Electrical Manufacturers' Association has also laid down specifications for the manufacture of Hermetic motors.
It is his argument that the rotors and stators manufactured by the appellants satisfy technically and also the Trade Understanding of the definition of Hermetic Electric Motors, which are another type of electric motors and therefore, the classification of the item as parts of compressors is not correct.
He relied on the unreported ruling as rendered in the case of Texmo Industries, Coimbatore v. In this ruling, the Tribunal had rejected the department's plea that rotors and stators should be considered as part of monoblock pump.
In the said ruling, a similar situation was in existence, where a common shaft for monoblock pump was operating the rotor and stator. Yet the Tribunal has held that they would be parts of electric motor and not parts of monoblock pump. He submitted that this ratio of the Tribunal's order answers the point pertaining to the common shaft which is used for the motor as well as for the compressor and also the argument of the Collector with regard to the non-existence of a motor. Union of India as reported in 61 E.
Counsel on a query admitted that the controversy before the Tribunal as well as before the Gujarat High Court was with regard to the rotors and stators are to be considered as parts of electric motors falling under Tariff Item 30A or to be classified as power pump under Tariff Item 68 which had been exempted from duty. Counsel argued that so long as technically and in Trade, Hermetic Texmo pumps models falling Motors have been recognized and these rotors and stators are utilised for such a Hermetic Electric Motors, they are required to be classified as parts of electric motor only.
On being pointed out to him with regard texmo pumps models falling the ruling of the Tribunal in the case of Collector of Central Excise v. Mahendra Engineering Works as reported in 67 E. Texmo pumps models falling submitted that the ruling dealt only with the grant of exemption and not with regard to any classification dispute and further the present controversy was not before the Tribunal in that case and hence the ruling is clearly distinguishable.
Since is satisfied, the question of relying on Note 2 does not arise. He further argued that the rotors and stators are designed solely and principally for the manufacture of hermetic motors and hence Note 2 a of Texmo pumps models falling XVI of CET was clearly applied the facts of the present case. He submitted that the ld. Collector had not considered the existence of hermetic motors and therefore, the order was not correct.
He futher submitted that the same has also been stated so in Trade Notice 44 ofdt. Dutta submitted that the Understanding of the Trade as well as Scientific of Hermetic Motors was in texmo pumps models falling context of use of rotors and stators in a sealed compressor.
The sealed compressor texmo pumps models falling function without these two items and these two items have to be considered as parts of compressors and not as a parts of Hermetic Motors. He submitted texmo pumps models falling there is no hermetic sealed motors available in the market.
The rotors and stators are specifically designed for a "Hermetically Sealed Compressors" and that there is no existence of a separate hermetic motor. The understanding both scientific and trade of the term hermetic motor is only in the context of a sealed compressor and therefore, a different understanding cannot be imported, merely because there is a reference to the term 'hermetic motor'. He submitted that the reasoning given by the Collector texmo pumps models falling that there is no separate hermetic motor for classifying these parts under the category of electric motors is a well sustained order.
He submitted that both the unreported judgments whether with regard to the question of dealing rotor and stator as parts of electric motor or electric motor itself. In that context, the Texmo pumps models falling had held that they are required to be considered as motors and not as parts of electric motors as rotor portion and stator portion are interchangeable with the rotors and stators of electric texmo pumps models falling.
Therefore, the controversy being confined to question of parts of electric motor or electric motor only the rulings are not of any help to the appellants. He further submitted that both the rulings are rendered under peculiar circumstance, inasmuch as, the matter had come into in existence while in the manufacture of monoblock pumps, which were not dutiable. JDR texmo pumps models falling that the situation is different in this case as no separate motor had come into existence but rotors-and stators had been used as apart of sealed hermetic compressor.
As there was a separate item like a sealed hermetic compressor which was not being denied by the appellants, therefore, the classification adopted by the lower authorities is unsustainable. JDR however, submitted that in the new tariff, the classification has to texmo pumps models falling on the basis of Section Note and Chapter Note which was sold in the old tariff.
Counsel submitted that Rs. The appellants are manufacturers of Wound Stators of various sizes and specifications and the texmo pumps models falling has given show cause notice to them to explain as to why the said item should not be classified as being parts of gas compressors under sub-heading The department has further stated that these parts are suitable for use solely and principally of various types of gas compressors falling under chapter sub-heading No.
The appellants have contested this heading and have claimed that they are to be classified under sub-heading Collector after due consideration of their case has to come to the conclusion that wound stators for use in Hermetically Sealed Compressors are goods by itself but are not specified in any of the Heading of Chapter 85 and more particularly under sub-heading Therefore, he has held that Chapter Note 2 b of Section XVI would applying the instant case, as they are solely or principally used with particular kind of machine or with number of machines with same heading shall be classified with the machines of that kind only.
He has held that the wound stators are part suitable and solely designed so as to become solely or principally to be used in the Hermetically Sealed Compressors. The Hermetically Sealed Compressors are classifiable under sub-heading No.
He has further held that in the manufacture of Hermetically Sealed Compressors, no articles or goods or machinery like electric motor comes into existence during the course of manufacture of HSC. Therefore, the wound stators was not the part of that machinery or goods which never came into existence. He has held that these wound stators manufactured by the assessee have no other application except to be fitted in the HSC only and as such it shall be justified in treating texmo pumps models falling wound stators as parts of components solely or principally used in the manufacture of HSC which falls under sub-heading In that event of the matter, he has confirmed the duty of Rs.
The appellants have contested this finding before Collector but has not deposited the duty amount. The Collector has dismissed their appeal for non-compliance of stay order.
Before us, they have deposited the amount and as this appeal also relates to the common question in the other three appeals, they have been taken up together for disposal as per law. In this appeal texmo pumps models falling, the appellants have raised the same ground as has been urged by the other appellant.
We have carefully considered the submissions made by ld. Advocate as well as Shri K. The admitted facts in this case are that these rotors and stators are not being used in a separate electric motor which is of a general type. The case of the appellants are that these items are specially designed and manufactured to be used in a Hermetic Sealed Compressors. However, it is their contention that it cannot be considered as parts of HSC as they perform the function of electric motor.
However, they do admit that the common prime-mover used for the compressor of these two parts. It is their contention that merely because a common prime-mover is used that by itself and also by the fact that it is placed texmo pumps models falling a sealed compressor, does texmo pumps models falling make it a part of texmo pumps models falling Hermetically Sealed Compressor.
They have texmo pumps models falling a plea that hermetic motors are electric motors of a different kind and that they are understood as such in the Trade as well as in the technical sense.
