COMMISSIONER OF CENTRAL EXCISE, DELHI-IV versus M/S. SANDAN VIKAS (I) LTD.

Citation: [2015] 7 S.C.R. 712 · Decided: 01-07-2015 · Supreme Court of India · Bench: DIPAK MISRA · Disposal: Disposed off

Judgment (excerpt)

[2015] 7 S.C.R. 712 
A 
COMMISSIONER OF CENTRAL EXCISE, DELHI-IV 
8 
v. 
M/S. SAN DAN VIKAS (I) LTD. 
(Civil Appeal No. 9730 of 2003) 
JULY01, 2015 
[DIPAK MISRA, R. K. AGRAWAL AND 
PRAFULLA C. PANT, JJ.] 
c 
Central Excise Tariff Act, 1985 - Tariff Heading 8415, 
Item No. 3- Classification of car air-conditioning kit - Whether 
under Item No.3 or under Heading at serial No. 8 which was 
added to the table of the Notification No.166186-CE dated 
1.3.1986- For the period 1.8.1991 to 28.2.1993- CEGAT 
D (Tribunal) placing reliance on *Sanden Vikas case allowed 
appeal of the assessee - On appeal, plea of revenue to 
reconsider the *Sanden Vikas case - Held: 'Car air-
conditioning kits' without the compressor are dutiable under 
the Heading at Serial No.8 and the 'compressor' is dutiable 
E under Serial No. 1 - If the kit and compressor are sold in a 
singular invoice or in one pricing, it will go out of item 8, but if 
there are two invoices for separate pricing, the air-conditioning 
kit would come under item No. 8 - The *Sanden Vikas case 
does not need reconsideration - The assessee, since sold 
F the kit and compressor separately, the order of the Tribunal 
cannot be found fault with. 
Rules of Interpretation to Central Excise Tariff Act- r. 
2(a) - Applicability of -
To Notification - Held: Rules or 
G principles of interpretation are always subject to context and 
, 
not binding commands on iron cast imperatives- The Rules 
may not be applicable if the Notification commands and 
require a different understanding - Applying r.2(a) of the 
Notification No.166186-CE dated 1.3.1986 would be contrary 
H to the legislative intent. 
712 
COMMISSIONER OF CENTRAL EXCISE, DELHI-IV v. 
713 
M/S. SANDAN VIKAS (I) LTD. 
Disposing of the appeal, the Court 
A 
HELD: 1. Rules of interpretation may not be 
applicable if the notification commands and require a 
different understanding. It needs no special emphasis 
to state that rules or principles of interpretation are B 
always subject to context and not binding commands 
on iron cost imperatives. [Para 15] [729-G] 
Collector of Customs v. Maestro Motors 2004 (6) Suppl. 
SCR 745: (2005) 9 SCC 412; CCE, Jaipur v. Mewar 
C 
Bartan Nirman Udyog (2010) 13 SCC 753 - referred 
to. 
2. Rule 2(a) of Rules of Interpretation consists of 
two parts. First part stipulates that Incomplete or 0 
unfinished goods would fall in heading relating to the 
completed goods provided the incomplete or unfinished 
good bears the essential character of the complete or 
finished goods. Second part predicates unassembled 
or assembled goods can be treated as goods complete E 
or finished goods. Rule 1 of the Rules of Interpretation 
lays down that for legal purpose classification shall be 
determined in accordance with the terms of headings 
and any relative section or Chapter Notes, provided such 
headings or Notes do not otherwise require a different F 
interpretation. [Paras 16, 17] [730-A-C, E-F] 
3. On a scanning of the Notification, it is 
perceptible that the gas compressors are specified and 
taxable on the heading serial No.1. Serial No.3 deals with G 
air conditioners including room air-conditioners which 
Is a distinct and separate commodity sold and 
purchased and Is distinguishable from the gas 
compressors or kits. Serial No.5 deals with parts and 
accessories of refrigerator and air conditioning H 
714 
SUPREME COURT REPORTS 
(2015] 7 S.C.R. 
A appliances and machinery of all sorts. Thus, serial No.5 
would cover air-conditioner kits, but would not include 
compressors, for they are specifically covered under 
serial No.1. Thus, parts and accessories of a car air-
conditioner including air-conditioning kit, are expressly 
B excluded from serial No.5. The reason for exclusion is 
that car air-conditioners and car air-conditioning kits 
have been included in serial No.8. [Para 18] [730-G-H; 
731-A-B] 
C 
4. The Explanation (2) states that for the purpose 
D 
of Notification, "car air-conditioning unit" or "car air-
conditioning kit" shall exclude the kit or assembly of 
parts which contains automotive gas compressor with 
orwithoutthe magnetic clutch. [Para 19) [731-E-F] 
~- The Notification consciously and deliberately 
treats a complete or finished air-conditioner as a dutiable 
entity under serial No.3, but kit of the same air-
conditioner is not treated at par and similar to a complete 
E or finished air-conditioner dutiable under serial No.3. 
The air-conditioners' parts and the accessor

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