TMI Blog2011 (3) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption by virtue of it being covered under Serial No. 13 of List 5 - In the case of the specially designed transformer for the wind operated electricity generator, it is noticed that it is no doubt an essential part without which the generating system would not function - The following extracts from the sub-chapter titled “ Enercon Annular Generator and Grid Management System” under the Chapter “Grid Integration and Wind Farm Management” are reproduced for an understanding of the various parts and components of wind energy convertors - The applicant is not eligible for the exemption in respect of the specially designed transformers proposed to be manufactured by it, as a part of wind operated electricity generator under Notification No. 6/2006-Central Excise dated 1st March, 2006 - Accordingly, the ruling is given - AAR/CE/ 01/2011 - - - Dated:- 18-3-2011 - Mr. Justice P.K.Balasubramanyan, Mr. J.K.Batra, Mr. J.Khosla, JJ. Present for the applicant : Shri Paresh M. Joshi, Advocate Shri Praveen Kakulte,AVP Technical Services Shri Girish Paliwal, VP Present for theCommissioner : Shri S.N . Singh, Jt. CDR, Shri Sonal Bajaj, SDR Ruling ( By J.K.Batra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated electricity generator, its components and parts thereof including rotor and wind turbine controller . 4. The applicant has claimed that the transformers proposed to be manufactured by it are essential parts of wind operated electricity generators and are designed exclusively for such generators of Enercon make / application only. These transformers perform dual functions i.e. step down‟ the voltage before generation of electricity by the WOEG and step up the voltage after commencement of generation of electricity by the WOEG. In their step down mode the specially designed transformers for WOEG step down the voltage from the grid to requisite level for the input power required for excitation of the generator during its start-up. The transformer is thus used in the system at a stage prior to the generation of electricity by Wind Operated Electricity Generator. Most of the transformers used in the electrical grids of the State Electricity Boards on the other hand, are single function transformers. 5. The applicant has further stated that these transformers have special features and characteristics which differentiate them from the usual transformers. A power poi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... include combination of several pieces of equipment integrated to perform a specific function . Therefore all devices and systems of Wind Operated Electricity Generator which is non conventional energy should be eligible for exemption from the payment of duty in accordance with the stated objectives of the fiscal policy. 7. The applicant has during the course of arguments also referred to the fiscal policy adopted by the Union and various State governments which promotes setting up of infrastructure for harnessing sources of non conventional energy. The applicant has cited the case of Commissioner of Customs (Preventive), Gujarat vs Reliance Petroleum Limited [2008 (227) ELT 3(SC)] to convey that the purpose for which an exemption is granted must be considered in its entirety notwithstanding the need to construe an exemption notification strictly. 8. The Commissioner of Central Excise, Daman has contested the claim of the applicant for exemption from payment of Central Excise Duty on specially designed transformers under the said Notification No. 06/2006-Central Excise. It has been argued that transformer does not fall under the category of wind operated electricity ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2)E.L.T. 9(S.C.) 6. Orient Traders Vs. Commercial Tax Officer, Triupati 2009(237) E.L.T.447(S.C.) 10. It is noted that Serial No. 84 in the Table of Notification No. 6/2006-Central Excise extends the benefit of duty exemption to Non-conventional energy devices/systems specified in list 5 (Emphasis supplied) It is apparent from the wording of this entry that the exemption is not available to each and every non-conventional energy device or system. The scope of exemption has been restricted only to such devices or systems which have been specified in List 5. In order to examine whether the transformer proposed to be manufactured by the applicant is eligible for the exemption contained in Notification No. 6/2006-Central Excise, it has to be verified whether the transformer is covered under any of the entries in List 5. 11. It would be necessary here to examine the items specified in List 5 appended to the Table in the Notification. The following non conventional energy devices/systems have been included in the list, namely:- (1) Flat plate solar Collector (2) Black continuously plated solar selective coating sheets (in cut length or in coil) and fins and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he arguments advanced by the applicant that all items of electrical machinery required to work in conjunction with a wind operated electricity generator are covered by the entry at Serial No.84 of the Table read with Item No. (13) of List 5. We are unable to accept the contention that the scope of the entry should be expanded to cover a generating system and its parts. Entry in Serial No. 84 uses the expression devices / systems because List 5 has some entries pertaining to devices and several other pertaining to systems. In fact the entry at Serial No. 21 of List 5 covers only parts and neither a device nor a system. In this background each of the entries in List 5 would have to be construed strictly as per the text of the entry itself without expanding the scope merely because group heading in Entry 84 of the Table refers to systems. 13. The applicant also wants that the purpose of the exemption as also the declared policy of the Government in promoting setting up of infrastructure for non-conventional energy should also be considered while interpreting the law - in this case Notification No. 6/2006-Central Excise. The applicant has therefore requested for adopting a broa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of the winds, the rotor of the wind mill would rotate at varying speeds at different times leading to generation of electricity of variable output parameters. The transformer as also the other equipment have therefore to be necessarily designed in such a manner that the system delivers stable power to the electricity grid. We may mention here that transformers as well as other such items of electrical machinery are rarely available off the shelf and such heavy machinery does need to be tailor made to suit the requirements of the electrical systems in which these have to operate. During the course of hearing it has been explained on behalf of the applicant that the transformer has features which make it suitable for use with the Wind operated electricity generators and further that absence of this special transformer would lead to disablement of the generator. We do realize that transformer is an essential part of the whole wind operated electricity generating system but does it make a component part of the wind operated electric generator? This question needs to be examined in the background of commercial practice. Parts of a machine which are integral to the machine i.e. whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tems have been described as ENERCON Wind Energy Convertors in the webpage titled Technology and Service . E-48/E-53 wind energy convertors, for which the specially designed transformers are proposed to be manufactured, have been listed in the Product Overview along with the other models of such convertors. The following extracts from the sub-chapter titled Enercon Annular Generator and Grid Management System under the Chapter Grid Integration and Wind Farm Management are reproduced for an understanding of the various parts and components of wind energy convertors. Amongst other features, the annular generator is a key component in ENERCON‟s gearless wind generator design. This low-speed synchronous generator is directly connected to the rotor. Generator output voltage and frequency vary with the speed and are converted via the ENERCON Grid Management System to be fed into the grid. This allows rotational speed control to be optimized; the annular generator is thus perfectly independent of the grid. By adjusting or pitching the blades and through electrical excitation via the turbine control system, rotational speed and power output are constantly checked and o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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