M/S. PAHARPUR COOLING TOWERS PVT. LTD. CALCUTIAversusCOLLECTOR OF CENTRAL EXCISE, CALCUTTA

A        M/S. PAHARPUR COOLING TOWERS PVT. LTD. CALCUTIA
                                v.
               COLLECTOR OF CENTRAL EXCISE, CALCUTTA

                                      MARCH 22, 1995

B                    [R.M. SARAI AND S.B. MAJMUDAR, JJ.)

             Central Excise Tariff:

            Item 33(2)-Hub with blades known as 'Blade Assembly' used in
C cooling towers-Whether electric fan are assessable under Item 33(2)-Held:
    ·No.

             The appellant was constructing cooling towers on contract. It pur-
       chased hubs and blades from the market, assembled them and faxed them
       in the cooling towers. The fans were mounted on the shaft of the motors.
D      When the fans were removed from the appellant's factory, it did not have
       any electric motor or any other kind of device to generate electricity. The
       Tribunal held that since cooling towers are part of thermal electric
       generating station, such a station is part of an industrial system and the
       fans used in it were nothing but electric fans. This finding has been
J? .   challenged in these appeals.

             Allowing the appeals, this Court.

             HELD: 1. The hub with blades known as 'Blade Assembly' was not
F      an electric fan as assessable under Item 33(2). {935-G]

              2.1. A very reading of the Entry under item 33(2) of the Central \_,,_.1
       Excise Tariff indicates that any item to be assessable under this Entry
       must satisfy the basic characteristics of being an electric fan. The descrip- -t--· -
       tion about use, its indispensability and shape is to widen the ambit of the
G      Entry but it would apply to such goods which are electric fan&. Once any·
       good satisfied the basic characteristics then its shape etc. would be im-
       material. But if the good is not electric (an then merely because it was         ~
       designed for industrial use as electriC fan would not render it an electric
       fan. The Entry is not electric fan or any fan capable of being used as
H      electric fan. In fact the word 'as' has been used before the expression,
                                            934
 }
                     PAHARPURCOOLG.v. C.OFCENTRALEXCISE                          935

         'parts indispensable for its operation'. Therefore, the duty under this Item   A
         is attracted on such electric fans which are not only designed for use in an
         industrial system but are indispensable for its operation. (936-E-FJ

               2.2 The entry has to be read both widely and narrowly. Widely as any .
         good designed for use as mentioned irrespective of shape would be taxable B
         under this Entry. Narrow because it must be electric fans. The Tribunal
         determined the leviablity by the latter part. But that was not sufficient. The
         good must be electric fan and such fan must have been designed for use
         in an industrial system as part indispensable for its generation. The
         appellant had purchased bub and blades and assembled them. They were
         taken out from the factory in the same condition. No electric device to C
         generate electricity was attached to it. Therefon, even if such assembly was
         fan it could not be held to be electric fan. (936-G-H]

               CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1523-24
         of 1986.
                                                                                        D
               From the Judgment and Order 28.2.86 of the Customs Excise and
         Gold (Control) Appellate Tribunal, New Delhi in A.Nos. ED (SB)
~-       (T)/686/80-BI and ED (SB)(T)/190/82-BI.

               C.S. Vaidyanathan, KV. Viswantha and KV. Venkataraman with               E·
         him for the Appellant.

              Joseph Vellapally, A. Sobba Rao and (V.K Varma Adv.) for Ms.
         Sushma Suri· with him for the Respondent.

               The following Order of the Court was delivered:                          p
 r- .)        The question that arises for consideration in these appeals is whether
         hub with blades called by Paharpur Cooling Towers as 'Blade Assembly'
         was an "electric fan" assessable under Item 33(2) of Central Excise Tariff.

               The Tribunal itself found that the appellant purchased hubs and          G
         blades from the market, assembled them and fixed them in cooling towers
         which they constructed on contracts. It further found that when the fans
         were removed from the appellant's factory it did not have nay electric
         motor or any other kind of device to generate electricity. The fans were
         mounted on the shaft of the motors. But it held that most of the industrial    H
    936                   SUPREME COURT REPORTS          -~
                                                                 (1995) 2 S.C.R.

A fans are like that, therefore, it could not be held that such fans were not
    electric fans merely because they had no electric motors integrally built in     ~-
    it. The Tribunal held that since cooling towers are part of thermal electric
    generating station, therefore, such a station is part of an industrial system
    and the fans used in it was nothing but electric fan.
B         Relevant Entry reads as under:

           "Item 33(2):
           Description of goods                         Rate of duty
           Electric fans, designed for use in an Fifteen per cent ad
c          industrial system as parts indispensable valorem
           for its operation and have been given for
           that purpose some special shape or quality
           which would not be essential for their use
           for any other purpose, and regulators
D          therefor."

         A very reading of the Entry indicates that any item to be a5sessable
  under this Entry must satisfy the -basic characteristics of being an electric
  fan. The description about use, its indispensability and shape is to widen
E the ambit of the Entry but it would apply to such goods which are electric
  fans. Once any good satisfied the basic characteristics then its shape etc.
  would be immaterial. But if the good is not electric fan then merely because
  it was designed for industrial use as electric fan would not render it electric
  fan. The Entry is not that electric fans or any fan capable of being used as
  electric fan. In fact the word 'as' has been used before the expression, 'parts
F indispensable for its operation'. Therefore, the duty. under ~this Item is _ _~"- "'-\
  attracted on such electric fans which are not only designed for use but are         '\
  indispensable for its operation. The Entry has to be read both widely and
  narrowly. Widely as any good designed for use as mentioned irrespective           -Y ·
  of shape would be taxable under this Entry. Narrow because it must be
G electric fans. The Tribunal determined the leviablity by the latter part. But
  that was not sufficient. The good must be electric fan and such fan must
  have been designed for use in an industrial system as parts indispensable        y
  for its generation. The appellant had purchased hub and blades and
  assembled them. -They were taken out from the factory in the same condi~
H tion. No electric devi~ to generate electricity was atta~hed to it. Therefore,
)
                PAHARPUR COO LG. v. C. OF CENTRAL EXCISE                     937

    even if ~uch assembly was fan it could not be held to be electric fan.         A

          In the result, the appeals succeed and are allowed. The orders passed
    by the Tribunal, Collector and Assistant Collector are set aside. The B
    question of law is decided by saying that the hub with blades known as
    'Blade Assembly' was not an electric fan as assessable under Item 33(2).
    Parties shall bear their own costs.

    G.N.                                                      Appeal allowed.