SANDEN VIKAS (INDIA) LTD. versus COLLECTOR OF CENTRAL EXCISE, NEW DELHI

Citation: [2003] 2 S.C.R. 608 · Decided: 04-03-2003 · Supreme Court of India · Bench: S.S.M. QUADRI, ASHOK BHAN · Disposal: Appeal(s) allowed
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Judgment (excerpt)

A 
SANDEN VIKAS (INDIA) LTD. 
v. 
COLLECTOR OF CENTRAL EXCISE, NEW DELHI 
MARCH 4, 2003 
B 
[SYED SHAH MOHAMMED QUADRI AND ASHOK BHAN, JJ.] 
Central Excise Tariff Act, I 985 
Schedule-Heading 84I5-ltem No. 5-Car air conditioning kit-'-
C Automotive gas compressor with or without magnetic clutch-Classification 
of-Exemption Notification No. I 66186-CE, dated I. 3. 1986 -Explanation 2-
Heading 8415-ltem Nos. 3 and 8-Assessee-manufacturer classijj;ing goods 
under Item No. 5 of Heading 8415 of Schedule to the Act for purposes of 
availing benefit of exemption Notification-Held, an air conditioning kit fell 
D within the meaning of 'air-conditioners' against Item No. 3 before .March 
20,1990-This position continued till Item No. 5 was amended and Item No. 
8 was inserted in the Notification where specific entry with regard to parts of 
car air-conditioner and car air-conditioning kit was provided-Specific entry 
prevails over general entry and, therefore, with effect from March 20, 1990 
till July 25, 199I, air-conditioning kit which comprises of various parts are 
E classifiable against item No. 8 of the Notification-As regards the automotive 
gas compressor (with or without magnetic clutch), the Explanation-2 which 
was added to the Notification on 25.7.199I, has the effect of taking it out of 
the car air-conditioning kit-Consequently, 'car air-conditioning kit minus 
automotive gas compressor with or without magnetic clutch' will remain in 
F the description of goods against Item No. 8 of the Notification and the excluded 
part of the kit, namely, automotive gas compressor with or without magnetic 
clutch. will cease to be part of Item No. 8 and will be liable to duty separately--
Interpretation of Statute-Tariff Items-Classification of 
G 
H 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 8079 of 1995. 
From the Judgment and Order dated 31.3. 95 of the Central Excise 
Customs and Gold (Control) Appellate Tribunal, New Delhi in A. No. E/ 
5095/92-B I in F.O. No. E/195 of 1995-BI. 
V. Lakshmikumaran, Alok Yadav, V. Balachandran for the Appellant. 
608 
L 
' 
~ 
SANDEN VIKAS (INDIA) LTD. v. C.C.E. 
609 
M.L. Verma, Dileep Tandon and B.K. Prasad Advs. for the Respondent. A 
The following Order of the Court was delivered. 
This appeal, by the assessee arises from the judgment of the Customs, 
Excise and Gold (Control) Appellate Tribunal at New Delhi (for short, the 
Tribunal) in Final Order No.E/195/95-81, dated March 31, 1995. 
B 
The appellant-assessee is a manufacturer of car air-conditioning kits, It 
classified the said goods under Item no. 5 of Heading 8415 of the Schedule 
to the Central Excise Tariff Act, 1985 (for short, the Act) for the purpose of 
availing the benefit of exemption of Notification No. 166/86-CE dated March 
I, 1986 (as amended from time to time). Though the appellant sought to C 
contend that it was only manufacturing parts of the air-conditioning kit and, 
therefore, the kit cannot be treated as an air-conditioner, the Assistant Collector 
did treat the same as air-conditioning system falling under item no. 3 of 
Heading 84 I 5 of the Notification. That order is said to be the subject matter 
of an appeal. Be that as it may, on March 20, 1990, a new Entry, item no. D 
8., was added to the table of the Notification, which reads thus: 
SL 
No. 
08. 
Heading 
No. or 
Sub-
heading No. 
84.15 
84.18 
84.19 
8481.10 
8481.91, 
8536.10 
9032.l 1 
or 
9032.91 
Description of goods 
Parts and accessories of 
car air-conditioner 
including car air-
conditioning kit 
Rate 
sixty five 
percent ad 
valorem. 
Conditions 
Thereafter, the appellant classified the air-conditioning kits under the 
said entry for purposes of levy of excise duty. On October 1, 1990, the 
Assistant Collector, Central Excise, Division-I, Faridabad issued a notice to 
E 
F 
G 
the appellant stating that under the said entry (sl. no. 8), the sub-heading 
relating to compressor has not been included in the second column of the H 
610 
SUPREME COURT REPORTS 
[2003] 2 S.C.R. 
A table and, as the car air-conditioning kits include compressors, they fall under 
item no.3 (Heading 8415.00) of the Notification; the appellant was called 
upon to show cause as to why excise duty amounted to Rs. 2,20, 74,021.30 
should not be demanded from it. We are informed that there have been series 
of notices and the total net demand under the said notices was in a sum of 
B Rs. 3,68,81,590. The appellant replied to the show cause notice asserting that
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