TMI Blog2022 (5) TMI 647X X X X Extracts X X X X X X X X Extracts X X X X ..... the grant of this exemption and the said officer certifies that the goods are required for initial setting up of solar power generation project or facility. It is clear that experts in the field consider the Module Mounting Structure as an integral and essential component of the solar power systems and the Ministry implementing the projects also considers the same as components of the solar power plants and hence were covered by the notifications. Even by common understanding, a component is an essential part of the system without which the system would not function. Therefore, it is not open to the department to deny the benefit of exemption notification. Coming to the procedural compliance, it is not the case of the department that the appellant did not produce the requisite certificate from the competent authority. In such circumstances, in terms of the notification in the event of non-compliance, the project developer of such project shall pay the duty which would have been leviable at the time of clearance of goods, but for this exemption. The impugned order does not survive on merits and limitation - Appeal allowed - decided in favor of appellant. - Excise Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leared by the appellant cannot be said to be machinery, prime movers, instruments, apparatus and appliances, control gear and transmission equipment and auxiliary equipment (including those required for testing and quality control) and component and thus, the benefit is not available to the appellant. 5. Learned Chartered Accountant submits that mounting structures are required to hold the solar power panels at a particular angle to maximise energy generation; typically, the angle required in South India is 10o - 15o C and in North India it is 20o - 35o C; power generating solar panels are designed to sustain only a minor amount of load (pressure) from nature, like wind, rain, earthquake, etc. Therefore, the panels are required to be secured using well designed structure. 6. Learned Chartered Accountant also submits also that the publication Best Practices in OPERATION AND MAINTENACE of Rooftop Solar PV Systems in India published by Gujarat Energy Research Management Institute (GERM), in Chapter 2, has described the PV System Components. On page 30, the Module Mounting Structure has been described to be a component of the PV System used to secure the PV modules in particu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue before the Supreme Court was not of the exemption notification dated 27.02.2010 and in respect of Bharti Airtel, there is a contrary judgment by Delhi High Court which has allowed credit on towers and shelters required for supporting antennas for effective transmission. The Delhi High Court has also come to above conclusion after referring to the Bombay High Court judgment in M/s. Bharti Airtel. 9. Learned Chartered Accountant submits that the show-cause notice is for the period December 2015 to September 2016 and was received by the appellant on 2.3.2018. The demand up to the period 31.1.2016 is barred by limitation; there was no suppression, fraud, collusion, etc., to necessitate invocation of extended period; the appellant had intimated the jurisdictional Assistant Commissioner, vide letter dated 31.12.2015, regarding the clearance of excisable goods without payment of duty for solar power project. The clearances were on the basis of a certificate issued by Ministry of New and Renewable Energy Resources. He relies upon the following: i. Continental Foundation Jt. Venture vs. Commr. of C. Ex., Chandigarh-I [ 2007 (216) ELT 177 (SC) ] ii. Commissioner Of Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... records of the case, we turn our attention to the analysis of the issues involved from a factual and legal matrix. 13. The brief dispute involved in this case is as to whether the appellant is entitled to the benefit of the exemption notification for the galvanised solar structure it cleared to solar power generating companies; and as to whether in case of non-applicability, duty can be recovered from the appellant and as to whether the show-cause notice is barred by limitation. 14. Coming to the first issue of the applicability of the notification, we find that it would be beneficial to have a look at the text of the notifications. Notification No.15/2010-CE dated 27.2.2010: Solar power generation project or facility - Exemption to specified goods required therefor In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts all items of machinery, including prime movers, instruments, apparatus and appliances, control gear and transmission equipment and auxiliary equipment (including those required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and specification thereof and certifies that the goods are required for initial setting up of a solar power generation project or facility; and (2) the Chief Executive Officer of the project furnishes an undertaking to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, having jurisdiction over the factory of the manufacturer, to the effect that- (i) the said goods will be used only in the said project and not for any other use; and (ii) in the event of non-compliance of sub-clause (i), the Project Developer of such project shall pay the duty which would have been leviable at the time of clearance of goods, but for this exemption. ; 15. In terms of the notification, exemption would be available to all items of machinery, including prime movers, instruments, apparatus and appliances, control gear and transmission equipment and auxiliary equipment (including those required for testing and quality control)and components for initial setting up of a solar power generation project or facility; exemption is granted on the basis of a certificate issued by an Officer not below the rank of Deputy Secretary to the Govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em. Under these circumstances, we find that there is considerable force in the argument of the appellant, backed by technical literature, that the Module Mounting Structure are essential components required for initial setting up of solar power project or facility. Information available in technical literature, which throws light on issues relating to matters of technical nature, cannot be brushed aside. Technical Literature would be of great help in understanding not only the concepts of technology but also the language and terminology of the same. Nomenclature adapted by technical personnel working in the field is important in understanding such issue. 18. The appellant would submit that the Commissioner has passed an order on similar set of facts in the case of M/s. Pennar Industries Ltd. The Commissioner finds that: 22. I find that the Director, Ministry of New and Renewable Energy, New Delhi addressed a letter Ref. No.4/40/2012-13/PVSP dt. 27.2.2013 to the department, with reference to the correspondence by clarifying that Module Mounting Structure form an essential part of the solar power plants that they were the components of the solar power plants and hence were cov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs have clearly concedes that the appellants have satisfied all the requirements of the said exemption notification and merely denied the exemption to the appellants on the ground that the aforesaid items are not mentioned in the Table to the said notification. On perusal of the table to the said Notification, I find that it reads as follows: - (a) Scientific and technical instruments, apparatus, equipment (including computers); (b) Accessories and spare parts, of goods specified in (a) above and consumables (c) computer software. From the above table it is seen that the broad heading is mentioned at (a) and their parts, accessories and consumables are mentioned at (b). There is no specific mention of any specific equipments, instruments or apparatus at (a) nor in respect of spares, accessories or parts in (b), above. This gives the meaning that the intention of the Government is to allow exemption to all the scientific and technical equipments, instruments, apparatus and all the spare parts, accessories and consumables to the equipments, as long as it is indented by specified research institutions mentioned in the notification. The Table of items for the exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they being required for initial setting up of solar power generation project are eligible for benefit of exemption available under notification dated 27.2.2010. The Bench observed as follows: 16. We do not find substance in the observations of the learned Commissioner, inasmuch as there is no evidence on record to show that any of these items have been used for execution of civil work to construct buildings, storage tanks, etc. On the other hand, the same are used as detailed in the above technical literature, to hold the reflector one of the main parts of the solar power generation system. Also, it is evident from the following photographs submitted by the ld. Advocate for the appellant during the course of hearing. 27. The meaning of components and parts has been explained by five Member Bench of this Tribunal in the case of Jindal Strips Ltd. v. Collector of Customs, Bombay - 1997 (94) E.L.T. 234 (Tribunal) while drawing distinction between parts component in the context of exemption Notification No. 77/90-Cus., dated 20-3-1990 as : 12. Part is defined in Black s Law Dictionary Sixth Edition at page 1117 as under: - An integral portion, somet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.A.C. Sales Tax - 1969 (24) STC 504 (Delhi HC) the question was whether the body of motor vehicle is a spare part within the meaning of the entry motor vehicles including chassis of motor vehicles, motor tyres and tubes and spare parts of motor vehicles under item 1 of first schedule to the Bengal Finance (Sales Tax) Act. It was held that spare part is an extra part kept for use in emergency for replacement, that every component will not be a spare part and no owner of vehicle would keep a body of motor vehicle as spare part and, therefore, it cannot be regarded as a spare part. In Bajoria Halwasiya Service Stn. v. The State of Uttar Pradesh - 1970 (26) STC 108 (All. HC) a similar question arose under the provisions of the U.P. Sales Tax Act and a notification issued thereunder. It was held that body of a motor vehicle is not a spare part, though it is a component since a spare part means a part kept in readiness for use in emergency and no owner of vehicle will keep body of a vehicle in readiness for use in emergency. It was held that every component part need not be a spare part while every spare part will necessarily be a component part. 14. In Paul Lazar v. State of Keral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to go by the meaning the word carries in common parlance. The dictionary meaning of component is one of the parts or elements of which anything is made of or into which it may be resolved , or a constituent part and this meaning has been accepted by the Supreme Court in Star Paper Mills Ltd. - 1989 (43) E.L.T. 178. Much is sought to be made out of the meaning stated as constituent part . The suggestion is that it must be a part in the initial constitution of the manufactured product. This suggestion is merely based on a priori assumption. Constituent , according to Chambers 20th Century Dictionary means: - constituting or forming; essential; elemental; component; electing; constitution-making - n. an essential or elemental part; one of those who elect a representative, esp. in parliament; an inhabitant of one s constituency. Thus, constituent only means an essential part or component. Use of the words component parts or constituent parts is an example of tautology. Constituent and component essentially mean the same thing, that is, an essential part of which anything is made of or into which it may be resolved. When parts are put together to create an end p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is not in any way restricted by using the words in conjunction with the article of which they are component parts. 28 . The aforesaid decision of the Tribunal was later upheld by Hon'ble Supreme Court in the case of Hindustan Sanitaryware Industries Ltd. v. Collector of Customs, Calcutta - 1999 (114) E.L.T. 778 (S.C.). 29 . The Tribunal in the case of Ganges International Pvt. Ltd. v. CCE, Raipur - 2014 (308) E.L.T. 106 (Tri.-Del.), while considering the goods viz. General Fabrication Structures, Auto Welded Beams and Boxes for Thermal Power Project, in the context of its eligibility to exemption under Notification No. 6/2006-C.E., dated 1-3-2006, mentioned at Sr. No. 13 of the table annexed to the Notification, has observed as follows :- 7 In our view, even if the General Fabrication Structures, Auto Welded Beams and Boxes cleared by the appellant are meant to be used as Supporting Structure for some machinery, the same would have to be treated as component parts of that machinery as the description of goods against Sl. No. 91B of Notification No. 6/2006-C.E., Sl. No. 338 of Notification No. 12/2012-C.E. covers all components whether finished or not and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. and LAPP Pvt. Ltd. When the competent authority in the Ministry has issued a certificate stating that exemption is available, exemption under said notification cannot be denied. 23. The appellant has also argued that in terms of the notification, in case of any non-compliance of subclause (1), the liability to pay the duty is on the project developer and not the appellant. As per the discussion above, it has to be held that the impugned goods are components required for initial setting up of solar power generation project or facility and to that extent, there is no violation of the substantial compliance of the notification. 24. Coming to the procedural compliance, it is not the case of the department that the appellant did not produce the requisite certificate from the competent authority. In such circumstances, in terms of the notification in the event of non-compliance, the project developer of such project shall pay the duty which would have been leviable at the time of clearance of goods, but for this exemption. 25. The department has relied upon the decision in Saraswati Sugars Ltd., Krishi Upaj Mandi Samiti, New Mandi Yard, Alwar vs. Commissioner of Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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