TMI Blog2015 (1) TMI 763X X X X Extracts X X X X X X X X Extracts X X X X ..... ted:- 22-12-2014 - Ashok Jindal, Member (J) and P S Pruthi, (T) For the Appellant : Shri Prasad Paranjape, Adv. For the Respondent : Shri V K Agarwal, Addl. Commr. (AR) JUDGEMENT Per: P S Pruthi: In this order three appeals are being decided together because the issue involved is essentially the same in all cases. 2.1 In the first appeal M/s. Rakhoh Enterprises (Rakhoh) were issued show cause notice denying the benefit of Notification No. 06/2006 dt. 1.3.2006 amended by Notification No. 12/2012 dt. 17.3.2012 to the excisable goods namely Anchor Rings and Load Spreading Plates (LSP) manufactured by them and cleared to M/s. Suzlon Gujarat Wind Park Ltd. Duty of ₹ 5,36,83,121/- was confirmed for the period Feb 2008 Jan. 2013 along with equivalent amount of penalty under Section 11AC of the Central Excise Act, 1944 and appropriate interest under Section 11AB/11AA. 2.2. The second appeal relates to M/s. Gemini Instratech Pvt. Ltd. (hereinafter referred to Gemini), who were denied benefit of exemption under notification No. 6/2006 dt. 1.3.2006 on the goods namely, wind mill doors, manufactured by them and cleared during the period April 2008-Sept-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E dated 1 March 2006 Table S.No. Chapter or heading or sub-heading or tariff item of the First Schedule Description of excisable goods Rate Condition No. 84 Any Chapter Non-conventional energy devices/systems specified in List-5 Nil - List 5 Sr. 13 : wind operated electricity generators, its components and parts thereof including rotor and wind turbine controller (e) Notification No. 12/2012-CE dated 17 March 2012 S.No. Chapter or heading or sub-heading or tariff item of the First Schedule Description of excisable goods Rate Condition No. 332 Any Chapter Non-conventional energy devices/systems specified in List-8 Nil - List 8 Sr. 13 : Wind operated electricity generator, its components and parts thereof including rotor and wind turbine controller. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs and the doors are fitted at the bottom of the tower for security and convenience only. He relied on the Hon'ble Supreme Court decision in the case of M/s. United Cable Industries reported in 2002 (14) ELT A280 in which it was held that insulated cables are not parts of wind mill. He also relied on a similar decision of Hon'ble Supreme Court in the case of Nicco Corporation Ltd. vs. CCE Calcutta 2006 (203) ELT 362 (S.C.). The Commissioner went on to state that the Wind Mill doors were being cleared by classifying them under CSTH 73083000 as part of a structure and, therefore it cannot be claimed by Gemini that doors are part of the wind mills. He also referred to the statement of Shrikrishna Motiram Mahajan, Managing Director of Gemini, who stated that they had paid Customs duty while importing such doors which reveals that exemption to doors was not extended by Customs. 4. Heard both sides. 5. The Ld. Counsel for Rakhoh, Mr. Paranjpe explained the erection and the functioning of the wind mill and the wind operated electricity generator (WOEG) with the help of detailed drawings and pictures. From the drawings it was shown that the wind mill consists of a foundation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion' and it is also mentioned that the anchor plates will be provided by the wind electric generator supplier. As per the technical literature issued to them by Suzlon, even in the guidelines issued by the Ministry of New and Renewable Energy, the tower and foundation are unambiguously understood to be parts of WOEG and further their parts in turn i.e. LSP and anchor rings, being integral to the foundation and tower will also be eligible for exemption. He referred to the provisional type certification scheme for wind turbine generator system in India released by the Ministry in which, under Chapter 3, definitions clause No. 3.40, the definition of support structure of wind turbine (WT) is given as part of WT comprising of tower and foundation . He also referred to the form prescribed by the Ministry to allow claim of exemption under Central Excise for parts of WOEG in which, against column 1 (f) it is mentioned forged steel rings for manufacture of special bearings for use in wind operated electricity generator . According to them this indicates that the WOEG and wind turbine are interchangeably used in common trade parlance. 5.3 Reading the amendment of notification NO. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in 1978 (2) ELT J159 (S.C.). 6. The case of the other appellant Gemini Instratech Ltd. is regarding availability of the exemption to windmill doors. That the wind mill door is fixed at the base of the tower there is no dispute. The Ld. Counsel for Gemini Instratech Ltd. argued that the wind mill door is part of the wind mill tower which in turn is a part of the WOEG. He emphasized that the doors are not ordinary doors but are specially manufactured for wind mills. The order placed on them by M/s. Enercon is for development of wind mill tower door assembly. He particularly referred to the decision of CESTAT in Pushpam Forging (supra), which considered the issue of MS Flanges and the decision was upheld by the Supreme Court. He also referred to Mumbai bench decision in their own case Gemini Instratech (supra) involving the same goods which was decided in their favour. The Ld. Counsel took us through various Judicial decisions, Board's Circular etc. We acknowledge the detailed arguments made by him backed by judicial pronouncements. However, no purpose would be served by repeating the arguments because they have already been mentioned above in the case of the other appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was to include towers and foundation for exemption, they would have found specific mention too in Not. 6/2006. But it is not so. 10. We note that the wind mill or wind turbine as it is sometimes called, consists of rotors, shafts, nacelle (containing generator), tower, foundation etc. The Ld. Counsels for appellants have painstakingly argued that the tower doors, anchor rings and LSP are part of the WOEG. We are unable to agree with this view because the word 'generator' in common parlance means nothing but the generator, itself, which in the present case is a specific part of nacelle that converts the wind energy into electrical energy through the shaft and gearbox. At most, the parts like shaft and electronic parts in nacelle could be considered as part of the generator. To view that the tower itself may be considered as part of the WOEG is a far fetched view. As explained by the appellant themselves, the tower provides stability for the load of the components mentioned above. In the present case, the parts in question namely Anchor rings, LSP and tower doors have nothing to do with the electricity generating system. The door at the base of the tower only facilitates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ems such as Solar Cooker. Therefore, it is obvious that wherever the Government intended to exempt systems as a whole, it has done so. Therefore, it would be not justified to read the entry relating to WOEG as if it would cover the entire wind mill system. The parts such as tower may be essential parts of the system but they cannot be termed as components of a wind operated energy generator (WOEG). The appellants appear to argue that a wind turbine and generator are synonymous. Even if this be so it cannot be said that a wind turbine system and generator will also be synonymous. The exemption may be to a turbine but this does not imply that the exemption would automatically cover the support structure i.e. tower and the foundation. Otherwise, even turbines used in hydroelectric power plants or thermal plants could be said to include the structure in which they are housed. Therefore, we do not agree with the contention of the appellants. It would be relevant to note the observations of the Hon'ble High Court in this very case of Rakhoh in the stay matter. The High Court in its order dt. 25th February 2014 observed that prima facie the exemption is not to an entire wind mill s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligible for exemption. We note that there is no specific ruling on the foundation components i.e. anchor rings and LSP. These, in any case, are items used in the foundation which cannot be considered as part of the wind operated electricity generator. 15.1 We have seen the earlier judgement in their own (Gemini) case passed by the Mumbai Bench. We note that the earlier judgement allowed the benefit to doors because it relied on judgements which allowed the benefit to towers and since doors are part of towers, it was held that exemption cannot be denied to doors. Our learned brothers also viewed that the Hon'ble Supreme Court judgement in the case of Nicco Corporation (supra) was not applicable because the relevant notification at that time i.e. Not 205/88 dt 25/05/1988 provided exemption to wind mills and specially designed devices which run on windmills. According to the Ld. Brothers in such situation it was held by SC that wires and cables are not entitled for exemption. We respectfully disagree with the view of Ld. Brothers because the wording in the present notification is even more restrictive whereas Notification 205/88 exempted parts of complete wind mills, the Noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he tariff classification of the products being cleared, name of product and particular notification being availed are available on the E.R. 1 itself. We have seen the relevant returns for the months of February 2008, April 2009, April 2012 and December 2012 which have been enclosed at sr. No. 7 of written compilation (pages 19-22). We find that that it was only in the E.R. 1 return of April 2012 that the appellants have declared specifically that they intend to clear anchor rings and LSP claiming exemption under notification No. 6/2006. In the other returns they have merely mentioned description of goods as articles of iron and steel. This description conceals the real identity and use of the goods. From this description it is not possible to know whether these goods are actually parts of and to be used in WOEG. Therefore, there is clear suppression of facts for not declaring the specific items for which they intended to avail exemption under notification No. 6/2006. In some returns the appellants have not claimed benefit of 'Notification No. 6/2006 or 12/2012. As regards the return for the month of April 2012 we note that the show cause notice in this case was issued on 1 st M ..... X X X X Extracts X X X X X X X X Extracts X X X X
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