JUDGMENT
Susanta Chatterji, J.
1. The present Rule was issued on 29-4-1982 at the instance of the writ petitioners praying, inter alia, for issuance of a Writ of Mandamus commanding the respondents to withdraw, cancel and/or rescind the purported notice dated 18-1-1982 and all the purported proceedings relating thereto and not to levy any duty under the Central Excises and Salt Act, 1944 and the Rules thereunder. The said purported notice dated 18-1-1982 was issued by the Assistant Collector of Central Excise, Chandernagore Range.
2. It is the specific case of the petitioners that the petitioner Company carries on the business of cold storage. The respondents are allegedly contending that the welding of the duty paid, steel pipes purchased by petitioner company in ‘U’ shape for the installation of the petitioner company amounts to manufacture of bunker coils and condensers by the petitioners and hence petitioners are liable to pay duty thereon under Item No. 29A of the First Schedule to the Central Excises and Salt Act, 1944. It is appropriate to state that the said welding is done for the purpose of installation of the cold storage system at the plant of the petitioner company. Item No. 29A of the First Schedule to the Central Excises and Salt Act, 1944 reads as follows :-
29A. Refrigerating and air-conditioning appliances are machinery :-
1. Refrigerators and other refrigerating appliances, which are ordinarily sold or offered for sale as ready assembled units, such as ice makers, bottle coolers, display cabinets and water coolers;
2. Air-conditioners and other air-conditioning appliances which are ordinarily sold or offered for sale as ready assembled units including package type of Air-Conditioners and evaporating type of coolers;
3. Parts of refrigerating and air-conditioning appliances and machinery, all sorts.
3. The writ petitioners contend that under Item No. 29A(3) as above, what is contemplated is parts of refrigerating and air-conditioning appliances and/or machineries of the type referred to in sub-item (2) of Item No. 29A and duty can be levied only on refrigerator or refrigerating appliances or air-conditioner or air-conditioning appliances which are ordinarily sold or offered for sale as ready assembled units. According to the petitioners, the duty under sub-item (3) is sought to be levied only on parts of such appliances or machinery as are commonly sold and dealt with as assembled units, when such parts are manufactured and sold for replacement of the worn out parts of such appliances and/or machineries. Further under sub-item (3), items necessary for installation of cold storage system and which are made specifically for such purpose and for such industrial system is not machinery or appliance which are ordinarily sold or offered for sale as ready assembled units cannot be subjected to any duty. According to the petitioners, there is no application of Item No. 29A(3) of the said First Schedule in the case of the petitioner company herein.
4. Elaborating these points, the petitioners have come up to this Court on the ground that the welding of the pipes in ‘U’ shape specifically meant for the cold storage of the petitioner company and the system therein installed by the petitioners do not and cannot amount to manufacture of any excisable goods. Further, the said steel pipes welded and arranged in ‘U’ shape for installation of the said cold storage systems are not goods and cannot be bought or sold in the market as goods. Moreover, the said pipes have no other utility and value without being used in the cold storage system of the petitioner company.
5. In course of hearing, a point of law has arisen. The attention of the Court has been drawn to a decision reported in 1980 E.L.T. Page 600 [Mother India Refrigerator P. Ltd. v. Superintendent of Central Excise and Ors]. Therein, by the Division Bench of Allahabad High Court it was found that Item No. 29A as above applied only to those parts of refrigerating and air-conditioning appliances which were ordinarily sold or offered for sale as ready assembled units and hence the petitioner therein was not liable to pay any excise duty and if a person erects any unit with his own ingenuity, that is not liable to duty. Similarly, component parts erected at the site are equally outside the purview of Item No. 29A as those are not assembled units and therefore the erection of a complete plant at the site is outside the purview of sub-items (1), (2) and (3) of Item No. 29A of the said First Schedule of the said Central Excises and Salt Act, 1944. It has further been pointed out that when an entry in the Schedule specifically refers to and restricts the applicability of duty to goods which are assembled units and which are generally offered for sale, the concept of sale is necessarily brought in. Then and there, sub-entry (3) of Item No. 29A as above, takes its colour from sub-entries (1) and (2), because of the specific directive of the heading by using the words ‘Parts thereof. Hence, the Hon’ble Division Bench was unable to agree with the respondents authorities that the Tariff Advice in relation to the refrigeration plants which are assembled at site was not relevant for determining the issue with regard to the parts which are assembled at site. In their Lordships’ opinion, such parts though may be called cooling coils and condensers, were not liable to excise duty within the meaning of Item No. 29A(3) of the said First Schedule.
6. The above interpretation of the Item No. 29A of the said Schedule was accepted by the Kerala High Court in the reported decision in 1986 (9) E.C.R. Page 547 (Collector of Customs & Central Excise, Cochin and Ors. v. Calicut Refrigeration Company) relying fully on the said (supra). Therein it was found that Tariff Item No. 29A as above is attracted only when refrigerators and other refrigerating units and appliances are ordinarily sold or offered for sale as ready assembled units. Division Bench of the Kerala High Court were in respectful agreement with the view expressed by the Allahabad High Court Division Bench in the said (Mother India Refrigeration Industries P. Ltd. case) (supra). Reference has also been made to a reported decision in (Gopal Cold Storage & Ice Factory v. Union of India and Ors.) wherein the Division Bench of Allahabad High Court upheld the view as held in (Supra).
7. However, attention of this Court has been drawn to a decision reported in 1984 (15) E.L.T. 333 (Guj.) (Anil Ice Factory and Anr. v. Union of India and Ors.) wherein the Division Bench of the Gujrat High Court dissented from the view taken by the Division Bench of the Allahabad High Court in (supra) and by the Division Bench of Kerala High Court in (supra) and also by the . In the said Gujrat High Court Division Bench decision, it was held that cooling coils and condensers used for captive consumption and not for sale are classifiable under Item 29A(3) of the Central Excise Tariff. It was also held therein that Item 29A adverts to goods which would fall within one or the other of three classifications mentioned in said Item No. 29A. Further, the description of each category of goods is clearly mentioned in Column 29A(2), and so far as column (3) therein is concerned, the tariff description is ‘parts of refrigerating and air-conditioning appliances and machinery’. The words ‘manufactured for sale’ in Entry No. (3) of 29A cannot be read by drawing upon the theory of ‘taking colour’ from sub-entries (1) and (2) which has no application in a case like the present one. The Division Bench held that if those words were injected, it would be re-writing this Entry which would be the job of the Legislature. Therefore, cooling coils and condensers would squarely fall within the description of Item No. 29A(3) of the Central Excise Tariff. The fact that those are manufactured on the precincts of the petitioner’s factory makes no difference nor the contention that sub-entry (3) would attract excise duty only if the goods are manufactured for sale was warranted.
8. After hearing the learned Advocates for the writ petitioners and the respondents Central Excise authorities including the Union of India at length, going through the materials on record and the reported decisions as reported hereinabove thoroughly this Court finds that there is difference in the interpretation of the Tariff Item/ Entry No. 29A and the sub-items (1), (2) and (3) thereunder. Though there are consistent decisions by the Division Benches of different High Courts and also of Single Bench holding that duty can be levied only on refrigerator or refrigerating appliances or air-conditioners or air-conditioning appliances which are ordinarily sold or offered for sale as ready assembled units or parts thereof when treated as assembled units. But another Division Bench in a recent judgment in Gujrat High Court held otherwise that such items fall squarely within the description of Item No. 29A(3) and therefore would attract excise duty, though not treated as assembled units.
9. In that view of the matter, the dispute raised by the petitioners in the present writ petition that the respondents Excise authorities are wrongful and illegally contending that the welding of the duty paid steel pipes in ‘U’ form or shape for the installation of the petitioner company and imposing tax wrongfully and illegally, is being referred to a Division Bench for such decision.
10. Let this matter be placed before the Hon’ble Chief Justice for assigning the matter to a Division Bench of this Hon’ble Court so that the dispute can be settled at rest.