M. Santhanam, Member (J)

1.This a revision petition filed before the Central Government which on transfer is being treated as an appeal.

2. The appellant has manufactured at his site at Chibramau Cold Storage, Farrukhabad, diffusers and condensers which are parts of refrigerating and air-conditioning machinery. The appellants did not pay duty for their products. The fact was discovered by the authorities on an inspection of the appellants' Cold Storage on 24-3-1976. The party had manufactured three diffusers each of 2500' length of 1" diameter pipe, three condensers each of 12 pipes of 20" X 2" diameter, and 5 condensers each of 12 pipes of 20" length x 2" diameter. These items had been installed in their cold storage as parts of refrigerating and air-conditioning machinery. A show cause notice was issued demanding duty besides imposition of penalty. The appellants contended that the parts did not attract duty under Tariff Item No. 29A(3). The appellants were only arranging the pipes and diffusers in a zig-zag way and that the parts did not form part of refrigerating and air-conditioning machinery. He also relied on the judgment of the Allahabad High Court-Mother India Refrigerating Industries v. Superintendent, Central Excise (1980 E.L.T. 600) in support of his contentions, The Assistant Collector upheld the demand for duty and imposed a penalty of Rs. 250/- for contravention of the provisions of the Act. The appellant preferred an appeal and the Appellate Collector upheld the order of lower authority and rejected the appeal.

3. Shri B.N. Bhattacharya, Advocate for the appellants, argued that the appellants were not manufacturing or offering for sale parts of any refrigerating and air-conditioning machinery and were therefore not liable to pay duty. In support of his arguments, he relied on a judgment of the Allahabad High Court in Messrs U.P. Cold Storage, Farrukhabad v. Superintendent of Central Excise, Farrukhabad and Ors. (reported as Mother India Refrigerating Industries Pvt. Ltd. in 1980 E.L.T. p. 600).

4. Shri V. Lakshmikumaran, the SDR, argued that the parts manufactured were condensers and diffusers which would amount to parts of air-conditioning and refrigerating machinery. He also submitted that the appellants had removed the goods without any intimation to the authorities or filing the necessary classification lists. In other words, he pointed out that the provisions of Rule 9 with Rule 49 of the Central Excise Rules, 1944 would be attracted. Even if the goods were captively utilised by the appellants, they would be dutiable. On the question of applicability of the Tariff Item 29(A)(3), he pointed out that the latest ruling of the Gujarat High Court reported in the 1984 E.L.T. p. 333 (Anil Ice Factory v. Union of India and Ors.) supported the view of the department, that cooling coils and condensers would squarely fall within the description of Item 29(AX3) of the Central Excise Tariff. He emphasised that this judgment has considered various citations including the ruling of the Hon'ble Allahabad High Court, and being the latest decision should be applicable to the present facts. He also cited the case decided by Punjab Haryana High Court in the matter of Frick India Ltd. v. Union of India.

5. We have considered all the relevant arguments advanced by the party in order to come to careful consideration of the respective submissions. On the question of excisability of the product, the latest pronouncement of the Hon'ble Gujarat High Court in 1984 E.L.T. 333 is against the appellants. The Hon'ble Gujarat High Court after noting and dissenting from the Allahabad High Court judgment and its own earlier decision has held that the parts of refrigerating and air-conditioning appliances and machinery would attract duty under Item 29A(3).

6. In this connection, it is also pointed out by Shri Lakshmikumaran that a special leave petition against the decision of Hon'ble Allahabad High Court in Mother India Refrigerating Indus