BLUE STAR LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner No. 1 is a company carrying on business as manufacturers of refrigeration and air-conditioning appliances and machinery. The company buys electric motors and blades and assembles them in the refrigeration and air-conditioning appliances and machinery manufactured by them. The assembly of motors and blades were classified as "electric motors" under Tariff Item 33(2) of the Central Excise Tariff. The petitioners contended that the motor and blade assembly would not constitute an electric fan as recognised in commercial and technical parlance. They further contended that they were merely components of refrigeration and airconditioning machinery manufactured by them. They, therefore, contended that the same could not have been classified under Tariff Item 33(2), of Central Excise Tariff. This contention was negatived by all the authorities till the matter came before the Government in revision sometime in 1980. However, at the time of hearing of this matter, it was pointed out that even though the goods are not covered under Tariff Item 33(2), they could be classified under Item 33(3), i.e., "Electric Fans not otherwise specified." Thereupon the petitioners submitted that this was being pointed out to them for the first time when the matter was being heard in revision and that, therefore, the same was not permissible in law. The Government accepted this contention on the part of the petitioners. In terms the Government held that the order of the lower authorities classifying the goods under Tariff Item 33(2) was not correct. As regards the question whether the goods could be classified under Tariff Item 33(3), the Government observed as follows :-

(2.) Consequently, since the earlier classification was set aside, the petitioners were entitled to a refund of the duty paid by them as contemplated under Section 11B, sub-section (3), Central Excises and Salt Act. Accordingly an application was preferred on 5-12-1980. On this, the Assistant Collector, Central Excise by a notice dated 18-7- 1981 issued a show cause notice [and] called upon the petitioners as to why the claim for refund of duty should not be rejected on the ground that "electric fans" manufactured by the petitioners are classifiable under Tariff Item 33(3) of the First Schedule to the said Act and why the duty already paid by them under Item 33(2) as aforesaid should not be confirmed as payable under Item 33(3) of the said tariff. The petitioners pointed out that that was not payable inasmuch as there was no classification under Tariff Item 33(3) of the Central Excise Tariff at all. They also pointed out that no adjustment was possible unless proper procedure was not (sic) followed in that behalf. They also pointed out that till such time the classification was done, there was no question of any adjustment of duty paid earlier.

(3.) This was negatived by the Assistant Collector by his order dated 18-11-1981. It is this order which is challenged in this petition.