TMI Blog1999 (4) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Briefly, the facts relevant for consideration of the issues raised are : The Maharashtra Energy Development Authority (MEDA) placed an order with the appellants for the supply, erection and commissioning of six Wind Operated Electric Generators (WOEG) of 250 MW each under a project funded/sanctioned by the Department of Non-conventional Energy Sources of the Govt. of India. Pursuant thereto, according to appellants, they imported a consignment of parts of WOEG of 250 KW capacity. For this purpose, they obtained the necessary certificate from the Ministry of Non-conventional Energy Sources under Notification 89/91 and sought exemption from Customs Duty under the said Notification which was not agreed to by the Customs authorities. After conducting detailed investigations including recording of statements of officers of the appellants, a Show Cause Notice was issued dated 28-9-1992 alleging that the appellants had in fact imported six full WOEG misdeclaring them as wind generator `components and `maintenance spares . It was alleged that the goods imported were in assembled condition and not in the form of components as claimed in the Bill of Entry and Invoice and therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Controller and Parts thereof. It was the submission of the ld. Counsel that the use of the expression Nacelle for the group of six items mentioned thereunder did not make these items a fully assembled machine attracting Rule 2(a) of General Rules of Interpretation of the 1st Schedule to the Customs Tariff Act, 1975 which provides that any reference to an article shall be taken to include a reference to that article in incomplete or unfinished form if the incomplete or unfinished articles have the essential character of the complete or finished article. In this connection, ld. Counsel referred to para (vii) of the Explanatory Note to Interpretative Rule in HSN which clarified that for purposes of Rule 2(a) `articles presented unassembled or disassembled meant articles the components of which were to be assembled either by means of simple fixing devices (screws, nuts, bolts etc.) or by rivetting or welding, for example, by simple assembly operations. He submitted that the assembly operation undertaken for the purpose of setting up WOEG was not a simple operation of the type contemplated under Rule 2(a) para (vii). BHEL had set up a factory specially for the assembly operations. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the purpose of manufacture of WOEG, Notification No. 90/91 granted exemption to WOEG itself. Further, while on the one hand, the benefit of Notification 89/91 had been denied to the appellants on the ground that the goods imported were not parts but were disassembled WOEG, (which qualified the import for the benefit of Notification 90/91) the duty concession under Notification 90/91 had been, on the other hand, denied on the technical ground that a separate certificate under Notification 90/91 had not been obtained from the competent officer in the Department of Non-conventional Energy Sources of the Government of India. It was submitted that the certificate and the recommendation relating to Notification No. 89/91 was equally applicable for purposes of Notification 90/91 since they were being issued by the same authority and for the same purpose, namely setting up of WOEG by the appellants. Reliance was placed on the case of Auto Tractors Ltd. v. CC, [1989 (39) E.L.T. 494 (S.C.)]. Without prejudice to the claims for exemption under Notifications 89/91 and 90/91 appellants also contend that they were in any case eligible for duty exemption under Notification 205/88-C.E. which exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbay port), hubs, controller and connecting cables. Technical drawing No. 200-01-00 supplied by the foreign supplier showing the exploded view of turbines showed that the imported items were in fully assembled form incorporating gear box assembly, braking system, generator, yawing cabin and control and measurement equipment. It was to be noted that though six nos. of cables used for connecting generator and controller had actually been imported alongwith cabin and control and measurement equipment, none of them had been declared. This would go to show that the appellants had in fact imported the entire Wind Turbine Generator in SKD condition, except for the tower. Further, Invoice dated 26-6-1992 also mentions the items as Wind Turbine components and sub-assemblies in knocked down condition. The appellants had, in reply to the Show Cause Notice, produced a certificate with no date stating that the goods were despatched in the form in which it was imported for convenience of transport and technical reasons. Further, the claim made in the suppliers undated certificate that gear box and generators were fitted together for ease of transport and for saving berthing space went contrary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot been signed), we find from the correspondence extracted and relied upon in the impugned order that the appellants had placed order for the goods in Knocked down condition. We find that the fax message dated 6-1-1992 sent by BHEL to Nordex clearly mentioned that the Wind electric generators will be imported in Knocked Down condition (including Nacelle parts) for assembly in India at site . This has not been disputed by the appellants. We find that the reply to the SCN dated 19-10-1992 also confirmed the position that the appellants had proposed to procure the wind turbine in Knocked down condition. The conclusion drawn by the Commissioner on the basis of the correspondence between the appellants and the foreign supplier that a contract existed between them for import of wind turbine in Knocked down condition, is therefore, in our view, well founded. 10. Ld. Counsel for appellants had however, submitted that a WOEG is complete only when it is mounted on a tower and the tower itself requires to be erected on a foundation. Since admittedly no tower had been imported, it would be incorrect according to him, to contend that a complete WOEG in knocked down condition had been importe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consists of (a) the turbine part consisting of `Nacelle (further sub-divided into gear, generator, cabin, yawing, braking and control and measurement equipment), rotor, hub and blades and controller and communication (b) the Tower and (c) the Foundation. In other words, to constitute the complete Wind turbine generator all the items referred to in (a), (b) and (c) above have to be put together. In terms of Notification 89/91-Cus. (the benefits of which is claimed by the appellants), duty exemption has been granted to goods specified in Column (2) of the Table to the Notification when it is imported for the manufacture of `Wind Operated Electricity Generators (WOEG) . It is significant to note that among the ten specified items under Column (2) of the Table, there is no mention of `Tower or `Foundation . It is also significant to note that the exemption under Notification No. 89/91 is given to the goods specified in the Table when it is imported into India is for the manufacture of wind operated electricity generators . The specified imported goods are therefore, to be used for the `manufacture of WOEGs. A plain reading of the Notification therefore, would show that the import ..... X X X X Extracts X X X X X X X X Extracts X X X X
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