ORDER
Mrs. Archana Wadhwa
1. The demand of duty confirmed against the appellants by the impugned Order of the Commissioner is to the tune of Rs.27,01,812.53 and penalty of Rs.2,70,000.00 has been imposed upon them.
2. Shri P.R.Das, learned Advocate appearing for the appellants submits that they are engaged in the manufacture of Voltage Stabilisers falling under Chapter 90 of the Central Excise Tariff act, 1985. During the period involved in the present appeal i.e.from August, 1989 to December, 1993, they were claiming the benefit of small-scale exemption Notifications.175/86 and 1/93 after getting their Classification Lists approved to that effect by their jurisdictional Central Excise proper officers. However, they were issued a show cause notice on 2.9.94 raising differential duty against them for the said period on the alleged around that Voltage Stabilisers are parts of air-conditioners and refrigerators and as such, as per Sl.No.4(iv) of Annexure to the said Notification, small-scale exemption benefit was not available to them. He submits that a specific plea was taken before the learned adjudicating authority that Voltage Stabilisers manufactured by them can be used anywhere and they cannot be considered as parts of air-conditioners and refrigerators. However, the Commissioner has not accepted the above plea and by relying on some of the earlier decisions which are not relevant, has held that Voltage Stabilisers are parts of the refrigerators. He submits that the said show cause notice was issued on the basis of an audit objection. This audit objection has been taken note of by the Commissioner in another Order passed by him in respect of similarly situate unit, and it has been observed in that the audit objection has been settled by AG(Audit) and there was not legal basis to sustain the show cause notice. By observing so, eh has dropped the proceedings in respect of this unit engaged in the manufacture of Voltage Stabilisers identical to the appellants’ product.
3. He also assails the Order on the point of limitation and submits that entire facts were before the Department and the exemption was being availed with the due approval of the Assistant Commissioner. In these circumstances, there was no justification for invocation of the longer period of limitation.
4. We have heard Shri V.K.Chaturvedi, learned S.D.R. for the Revenue who reiterates the reasoning of the adjudicating authority.
5. The short point required to be decided in the present appeal is as to whether the Voltage Stabilisers manufactured by the appellants can be held to be parts of air-conditioners and refrigerators so as to deny the benefit of small-scale exemption Notification, and as to whether the demand is barred by limitation. The appellants have taken a specific stand that the Voltage Stabilisers are not only used with the air-conditioners, but also are used to regulate several machineries. The goods are classifiable under Chapter 90 and there is no dispute to that effect. The goods are to be classified as parts of a particular machine only if they are given to work with their specific machines or operators, otherwise they will fall under their own appropriate headings. The role of stabilisers, as is know, is to regulate the input-correct and given a particular determined output which output can be fed to in all the electrically operated machines. As such, by no stretch of imagination, stabilisers can be held as accessories of refrigerating and air-conditioning appliances so as to include from the benefit of Notification No.175/86 or 1/93. We also take note of the fact that the Commissioner in the cases of another identically situated unit has dropped the demand of duty by observing that such demand were raised on the basis of audit objection which has been settled by AG(Audit) and as such, there was no legal basis to sustain the show cause notice. The appellants have also referred to the Delhi Commissionerate’s Order No.117/86 passed in respect of number of parties similarly situate, dropping the demands raised on identical issues. As such, we do not find any justification for denying the benefit of small-scale exemption to the appellants.
6. We also note that the demands is barred by limitation. The show cause notice in question is raised on 2.9.94 for the period from August, 1989 to December, 1993. The Classification Lists filed by the appellants are duly approved by the proper officer. As such, there was no justification for invocation of longer period.
7. As a result, the appeal is allowed on merits as also on limitation.
Pronounced in the open court.