M/S. KHAITAN ELECTRICAL LTD. versus COLLECTOR OF CENTRAL EXCISE, NEW DELHI

Citation: [2003] SUPP. 2 S.C.R. 268 · Decided: 06-08-2003 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Appeal(s) allowed
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Judgment (excerpt)

A 
MIS. KHAITAN ELECTRICAL LTD. 
v. 
COLLECTOR OF CENTRAL EXCISE, NEW DELHI 
AUGUST 6, 2003 
B 
[S. RAJENDRA BABU, B.N. SRIKRISHNA AND G.P. MATHUR, JJ.] 
Central Excises and Salt Act, 1944-First Schedule, Tariff Item 33(/)(a)-
Models of fans-Classification-Excise Duty-Exemption of-Held: Fans are 
C designed primarily as table fans though capable of being.f1Xed on wall or 
ceiling· and are also entirely different from regular cabin fans, thus classifiable 
as table fans attract{ng 5% ad va/orem duty under Tariff Item 33(J)(a). 
Appellant-manufacturer of electric fans submitted a classification list 
for approval under Tariff Item No.33(1) of the First Schedule to the 
D Central Excises and Salt Act, 1944 for models of fans. He also claimed 
So/o excise duty under the exemption notification. Assistant Collector 
classified the products as cabin, carriage, or circulator fans and, therefore, 
falling under T.I. No.33(1)(b). Collector (Appeals) considered the design 
and manufacture and also the literature containing the description of the 
concerned models of the fans and held that they were used primarily as 
E table fans, although they were capable of being hung from wall or ceiling 
and also their design and manufacture was entirely different from regular 
cabin fans which could never be placed upon a table. He then classified 
the products as table fans which attracted 5% ad valorem duty under T.I. 
No.33(1)(a). Appellate Tribunal set aside the order of the Collector 
F (Appeals) and upheld the order of the Assistant Collector. Hence~ the 
present appeal. 
Respondent-department contended that the fans in dispute are 'multi 
purpose' and could be used .as table fan and also as cabin/carriage fans 
and that, considering their usage for different purposes, the fans in 
G common parlance cannot be termed as table fan only. 
Allowing the appeal, the Court 
HELD: The Collector (Appeals) based his decision on the fact that 
the fans in question were designed primarily as table fans, although they 
H 
268 
KHAITAN ELECTRICAL LTD. v. C.C.E. [SRIKRISHNA, J.] 
269 
were capable for being hung from wall or ceiling. Further, because of the A 
peculiarity of design and manufacture, the concerned fans were entirely 
different from regular cabin fans which could not be adapted as table fans: 
Also, the literature describes it predominantly as a table fan. Thus, the 
conclusion that the models of fans should be Classified as table fans, 
attracting ad valorem duty of 5% under T.I. No.33(l)(a) of the First 
Schedule to the Central Excises and Salt Act,1944 was perfectly justifiable B 
and reasonable. [272-D-E; 270-A; 272-C] 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 359of1997. 
From the Judgment and Order dated 12.8.96 of the Central Excise 
Custom and Gold (Control) Appellate Tribunal, New Delhi in A.No.E/2346/ C 
96-B in F.O.No.E/311of1996-B. 
Joseph Vellapally, Ms. Rohina Nath and Umesh Kumar Khaitan for Ml 
s. Khaitan & Co. for the Appellant. 
T.L.V. Iyer, Rajiv Nanda and B.K. Prasad for the Respondent. 
The Judgment of the Court was delivered by 
D 
SRIKRISHNA, J. The appellant is engaged in manufacture of electric 
fans of different varieties. In respect of its four models of fans called 'Mini', E 
'Tini', 'Chiki' and 'Miki' the appellant submitted a classification list for 
approval under T.I. no. 33(1) and also claimed concessional rate of duty@ 
5% ad valorem under the Notification No. 46 of 1984 dated 1.3.1984. The 
Assistant Collector Central Excise issued a notice dated 23.3.1984 calling 
upon the appellant to show cause as to why the aforesaid models of fans 
should not be classified under Item No.33(3) and under item No.l(l)(b) of F 
the Notification No. 46/84. 
By an order dated 19.1.85 the Assistant Collector, Central Excise, 
Faridabad classified the said products under T.I, No. 33(l)(b) for the purpose 
of availing benefit of Notification No. 46/84. On appeal the Collector of 
Customs and Central Excise (Appeals) took the view that considering the G 
design and manufacture as also the literature containing the description of the 
concerned models of the fans, they were used primarily as table fans. The 
Collector (Appeals) was of the view that although there was an arrangement 
for clamps which enabled the concerned models of fans to be hung from wall 
or ceiling, their design and manufacture was entirely different from regular H 
270 
SUPREME COURT REPORTS [2003] SUPP. 2 S.C.R. 
A cabin fans which could never b
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