VOLTAS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The first petitioner is a Company registered under the Companies Act, 1956 while the second petitioner is an official of the said Company. The first petitioner will hereinafter be referred to, for the sake of convenience, as "the Company". The Company is engaged, among other things, in the manufacture of airconditioners and water-coolers at a factory situated at Thane near Bombay. By an order dated 28th of July, 1972 the Superintendent of Central Excise, Range I, Thane, informed the Company that the Industrial Fans (Blowers) manufactured by the Company in its factory for use in its airconditioners and water-coolers attracted duty under Tariff Item No. 33(2) after taking into consideration the various points which had been urged on behalf of the Company in reply to a notice issued to it earlier by the said authority. The Company was, therefore, asked to obtain L4 licence for the same and pay duty for the period from 29th May, 1971.

(2.) The Company preferred an appeal an the Appellate Collector of Central Excise, Bombay, allowed the said appeal holding that the combination of impellers and electric motors in the process of assembling of airconditioners and water-cooler are not electric fans falling under Item 33 of the First Schedule to the Central Excises and Salt Act because, as the Appellate Collector said, such fans are not known in the market as electric fans. The Appellate Collector further held that the impellers and motors brought in by the Company were in the nature of component parts for airconditioners and water-coolers and the combination of these two in the process of assembling of airconditioners and water-coolers would not bring these combinations within the scope of Item 33 of the said Schedule. Therefore, the Appellate Collector held that "the combination of impellers and motors which has been referred to as 'blowers (industrial fans)' by the Superintendent does not fall within the scope of Item 33 of the said (first) Schedule". This he did by his order dated 22nd November, 1974.

(3.) The Government of India, in exercise of its powers of revision under Section 36(2) of the Central Excises and Salt Act, hereinafter referred to as "the Act", issued a notice asking the Company to show cause why the order passed by the Appellate Collector should not be revised. The Company gave its reply and after giving a hearing to the Company the Central Government, by its order dated 26th of September, 1980, set aside the order of the Appellate Collector and purported to restore the order of the Superintendent, which was the authority of first instance. It has already been mentioned above that the Superintendent of Central Excise, Thane, being the authority of first instance, has classified the item in question under sub-item (2) of Item 33 of the First Schedule to the Act, but the Central Government, in exercise of its revisional jurisdiction, purporting to restore the order of the Superintendent, classified the said item under sub-item (3) of Item 33. Even then the Government proceeded to state that the order passed by the "Assistant Collector" shall get restored. This is obviously a petitioner and some arguments have been advanced by Mr. Taleyarkhan appearing in support of the petition. However, I have not thought it necessary to examine them because on the basic question as to whether the item in question is covered by Tariff Item 33 at all, Mr. Taleyarkhan is on sound ground. Aggrieved by the aforesaid order, the Company has approached this Court under Article 226 of the Constitution of India.