SUPREME COURT OF INDIA
Commissioner of Central Excise, Delhi-III
Vs.
Carrier Aircon Limited
(C. K. Thakker and Mrs.Ruma Pal JJ.)
04.05.2005
JUDGMENT
C. K. Thakker, J:-
1. The question in these appeals is whether the Commissioner of Central Excise
had properly exercised his power of revision under Sec.35E(2) of the Central
Excise and Salt Act, 1944. There is a further issue, namely, whether the
decision taken on appeal by the Commissioner (Appeals) was correct. It is not
necessary to go into the second issue inasmuch as we are of the view that the
first question must be answered in the negative.
2. The power of review is granted under Sec. 35E. It reads as follows:
"35E(2) : The Collector, Central Excise may, of his own motion, call for
and examine the record of any proceeding in which an adjudicating authority
subordinate to him has passed any decision or order under this Act for the
purpose of satisfying himself as to the legality or propriety of any such
decision or order and may, by order, direct such authority to apply to the
Collector (Appeals) for the determination of such points arising out of the
decision or order as may be specified by the Collector of Central Excise in his
order."
3. It appears that the Commissioner [referred to as the Collector in the
provision quoted above] must take a decision on the basis of the records
available before the adjudicating authority viz. The Assistant Commissioner for
the purpose of satisfying himself whether the decision taken by the Assistant
Commissioner was legal or proper. If the Commissioner is satisfied that the
decision was not legal or proper, he may direct the Department to appeal to the
Appellate Authority for determination of points as may be specified by him in
his revisional order.
4. In this case, the issue was whether Chillers were classifiable under Tariff
Entry 84.18 (as contended by the respondent) or Tariff Entry 8415.00 or 84.19.
The relevant Tariff Entries read as follows:
“84.15 : Air-conditioning machines, comprising a motor-driven fan and elements
for changing the temperature and humidity, including those machines in which
the humidity cannot be separately regulated.
84.18 : Refrigerators, freezers and other refrigerating or freezing equipment,
electric or other; heat pumps other than air-conditioning machines of heading
No. 84.15.
84.19 : Machinery, plant or laboratory equipment, whether or not electrically
heated, for the treatment of materials by a process involving a change of
temperature such as heating, cooking, roasting, distilling, rectifying,
sterlising, pasteurizing, steaming, drying, evaporating, vaporising, condensing
or cooling, other than machinery or plants of a kind used for domestic
purposes; instantaneous or storage water heaters, non-electric.”
5. The Assistant Commissioner, by his order dated 27.10.1997, was of the view
that the Chillers were properly classifiable under Tariff Entry 84.18. The
Commissioner relying upon a report of the Central Economics Intelligence Bureau
(CEIB) to the effect that other importers of Chillers had been describing them
as heat pumps for the purpose of import, was of the view that this subsequent
fact merited a revision of the order of the Assistant Collector. The
Commissioner, accordingly, directed the Assistant Commissioner, Central Excise,
to appeal to the Commissioner of Central Excise for setting aside the order
dated 27.10.1997. The matter was taken up before the Commissioner (Appeals) who
decided against the respondent and remanded the matter back to the Assistant
Collector for redetermination of the liability.
6. The respondent challenged this order of the Commissioner before the Customs,
Excise & Gold (Control) Appellate Tribunal (CEGAT). CEGAT was of the view
that the Commissioner of Central Excise could not have passed the order upon
points not arising out of the decision or order of the subordinate adjudicating
authority and could not have relied on new material. Several decisions had been
relied upon in support of this view and the appeal of the respondent was
allowed. Being aggrieved, the Department has preferred these appeals before us.
7. We are of the view that there is no substance in these appeals because the
principle of law as enunciated by the Tribunal is correct. Furthermore the CEIB
report could not in any event mean that Chillers could not be classified under
Tariff Entry 84.18 as heat pumps were also classifiable under that tariff
entry. In these circumstances, the appeals are dismissed.