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Issues involved: Interpretation of Central Excise Notification No. 205/88 regarding duty exemption for imported EVA film sheet used in manufacturing solar photovoltaic modules and panels.
Summary: The appellants imported EVA film sheet for manufacturing solar photovoltaic modules and panels, claiming duty exemption under Central Excise Notification No. 205/88. The authorities denied the benefit, stating it was only for parts consumed within the factory of production of solar equipment, not raw materials. A duty demand of Rs. 58,822 was imposed, leading to the appeal. The Managing Director argued that the film sheet was essential for manufacturing solar products, aiming to promote non-conventional energy sources. He contended that the legislative intent was to exempt imported inputs like EVA film to support domestic manufacturers of solar equipment. The appeal sought to overturn the lower authorities' decision and secure the Notification's benefits. After reviewing the submissions, the Tribunal found that the lower authorities misinterpreted the Notification. The requirement of "parts consumed within the factory of production of such parts" was wrongly understood as "parts consumed in the production of such parts." The Tribunal deemed this interpretation illogical and inconsistent with legislative intent. The Notification aimed to make solar energy devices more affordable by exempting parts manufactured and consumed in India from duty. Therefore, the benefit of the Notification should extend to the appellants. Consequently, the Tribunal set aside the impugned order and allowed the appeal, granting the appellants the benefit of duty exemption for the imported EVA film sheet used in manufacturing solar photovoltaic modules and panels.
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