TMI Blog2017 (12) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... ssuing invoices for clearance parts of boiler as a piecemeal of complete boiler under chapter heading No.8402.10 - no suppression of fact can be alleged against the appellant - demand is also hit by limitation in absence of any suppression of fact on the part of the appellant. Appeal allowed - decided in favor of appellant. - E/2188/06 - A/90985/17 - Dated:- 21-11-2017 - Shri Ramesh Nair, Member ( Judicial ) And Shri Raju, Member ( Technical ) Shri Rajesh Ostwal, Advocate for Appellant Shri Ajay Kumar, Addl. Commr. (A.R) for respondent ORDER Per : Ramesh Nair The fact of the case is that the appellant is engaged in the manufacture of boilers falling under chapter 84 of the First Schedule to the Central Excise Tariff Act, 1985. 2. The departmental officers visited the factory of the appellant and conducted investigation/enquiries which revealed that the appellant had cleared various parts/machinery of boilers by claiming and availing exemption under Notification No.5/99-CE dt. 28.2.99, 6/2000-CE dt. 1.3.2000, 3/2001-CE dt. 1.3.2001 and 6/2002-CE dt. 1.3.2002 while executing the orders in respect of the following projects namely- (1) Nagarjuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CE dt. 1.3.2001 and 6/2002-CE dt. 1.3.2002. Interest under Section 11AB was demanded and an equal amount of penalty was also imposed under Section 11AC. Being aggrieved by the order-in-original, appellant filed the present appeal. 2. Shri Rajesh Ostwal, Ld. Counsel appearing on behalf of the appellant submits that the main parts of the Boilers were admittedly manufactured by the appellant some parts are getting manufactured from the vendors. Since the boilers as such cannot be cleared all the parts are cleared in piecemeal but all the parts put together consist of boiler and it has essential characteristic of boiler. He submits that all the contracts with the buyer is in respect of supply of the complete boiler and not for parts therefore the appellant are manufacturing boiler and executing project of supply, erection and installation of boiler at the buyers premises. In this fact if it is presumed that appellant are not manufacturing the boiler then they will not be able to execute the project as per the contract. Even some part of the boilers are procured from the vendor but the major parts of the boilers are manufactured by the appellant and the complete boiler in CKD/SKD f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) Commissioner of C.Ex. Pune-I Vs. Thermax Bobcock Wilcox Ltd. - 2005 (182) ELT 336 (Tri.-Mumbai) (ii) Thermax Babcock Wilcox Ltd. Vs. Commissioner of Central Excise, Pune - 2015 (320) E.L.T. 32 (S.C.) (iii) Shree Venkateswara Engg. Corporation Vs. C.C.E. Coimbatore - 2016 (335) E.L.T. 62 (Tri.-Chennai) (iv) Metafab Hightech (P) Ltd. Vs. Commissioner of Central Excise, Nagpur - 2016-TIOL-1472-CESTAT-MUM (v) Vishwa Industrial Co. (P) Ltd. V. Commissioner of C. Ex., Calcutta-II - 1999 (107) ELT 774 (Tribunal) (vi) Commissioner of C. Ex., Trichy Vs. Bhel - 2009 (247) E.L.T. 263 (Tri-Chennai) (vii) Thermax Babcok Wilcox Ltd. and Thermax Ltd. Vs. Commissioner of Central Excise Pune-I M/94303-94304/16/EB dt.6.10.2016 (viii) Sulzer Flovel Hydro Ltd. Vs. Commissioner of Central Excise, Delhi-II - 2004 (176) E.L.T. 195 (Tri.-Del.) As regard limitation he submits that there is no suppression of fact on the part of the appellant, as they have declared the goods in question in their classification list in the year 1995 wherein the boiler was classified under heading 8402.10. In respect of clearance of the boiler in CKD/SKD form i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely non-conventional energy device/system. In our view the objective of this exemption is to grant the exemption to such energy device/system which functions by using the non-conventional fuel such as municipal waste, agricultural waste etc. In the present case the goods supplied by the appellant is undisputedly erected and installed as boilers which is functioned with the non-conventional fuel as the same is biomass-based boiler. The major parts of the boilers are manufactured by the appellant. Though some of the parts are procured either on job work or through vendor but the entire boiler is supplied by the appellant in CKD/SKD form therefore it cannot be disputed that the goods supplied by the appellant is non-conventional energy device/system. As per the nature of the boiler, it is invariably cleared in CKD/SKD form as the same cannot be cleared in completely assembled form. Therefore merely because the boiler is cleared in CKD/SKD form, if the exemption notification is denied then the exemption notification will become redundant for the reason that the exemption will not be allowed in case the boiler is cleared in CKD/SKD form as there will be no case where the boiler is clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents to site or direct to the sub contractors to send these items to site directly or fabricated at site. (d) Carry out civil work necessary to hold the structures and erect these components one by one, provide electric and water connection. With reference to above representation Board had issued above Circular dtd. 19.5.92 which reads as: 3. The Board has carefully considered the issue of classification and levy of duty of excise raised above, and the provisions of exemption Notification No.205/88-CE dtd. 20.5.88 and has considered that it is necessary or expedient for the purposes of ensuring uniformity in the classification of excisable goods and the levy of duty of excise on boilers, designed for agricultural or municipal waste as also conventional fuel, and in exercise of the powers conferred under Section 37B of the Central Excise Salt Act, 1944 (1 of 1944) the Board hereby orders that: (a) Benefit of Notification No. 205/88-CE dtd. 25.5.88 (earlier Notification No. 120/81-CE dtd. 15.5.81) will be available to such goods, even when these are cleared in CKD, SKD conditions provided that evidence is produced that goods cleared form part of a complete devic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly indicate that the essential parts of boilers are cleared from the factory as it is not possible to clear a complete boiler in one go. Even when one considers that some of the parts removed from the factory are of auxiliary nature, one has to agree that an incomplete boiler in unassembled form is cleared. That the boiler in unassembled form is removed in several lots on different dates itself does not mean that parts but not the whole are cleared from the factory in view of the fact that the respondent has a contract to erect and commission a boiler and has been disclosing this fact to the Department. For the reasons stated above we hold that the parts removed in several consignments is a boiler in incomplete form and therefore have to be classified under the heading meant for the complete machine, in this case under 8402.10. We uphold the contention of the Commissioner that Rule 2(a) of Interpretative Rules apply to this case. We therefore uphold the contention of the Commissioner and reject the Revenues appeals in so far as this aspect is concerned. (b) Bought out items-inclusion of value thereof : Revenue has challenged the Commissioner (Appeals) decision that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based fired Steam Generator. It is pertinent to note here that the said exemption notification admittedly does not refer to any particular description of the device. Sl. No. 16 of the list 9 of the said notification which is relevant to the issue in question describes the goods as follows: LIST 9 (Sl. No. 237 of the Table) (1) Flat plate solar Collector (2) Black continuously plated solar selecting sheets (in cut length or in coil) and fins and tubes (3) Concentrated pipe type solar collector (4) Solar Cooker (5) Solar water heater and system (6) Solar air heating system (7) Solar low pressure steam system (8) Solar and desalination system (9) Solar pump based on solar thermal and solar voltaic conversion (10) Solar power generating system (11) Solar photo module and panel for water pumping and other applications (12) Solar drier and system (13) Wind operated electricity generator, its components and parts thereof (14) Water pumping wind mill, wind aero-generator and battery charger (15) Bio-gas plant and bio-gas engine (16) Agricultural, forestry, industrial, municipal and urban waste conversion device producing energy (17) Equipment for utilising ocean waves ener ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s within the plain terms of the exemption it cannot be denied its benefit by calling in aid any supposed intention of the exempting authority. If such intention can be gathered from the construction of the words of the notification or by necessary implication therefrom, the matter is different. We notice from the findings of the lower authorities that the goods cleared by the appellants have reached finality in the sense that they have become identifiable goods though according to the lower authorities they are only parts. We find that this conclusion has not been arrived at based upon the description of the items in the said notification with reference to the exemption claim as we have already mentioned that the description would cover all devices without reference to the nature of the device or description of the devices. If the items cleared have attained individual identity and finality it cannot be said it is not a device. Therefore, taking into consideration the specific description under which the exemption is allowed, we have no hesitation in allowing the exemption as the items in question are only devices for the purpose of conversion of the waste material into non-convent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no dispute that the chimneys manufactured by the appellant are meant for biomass burning boilers being manufactured by M/s. ISGEC John Thompson who in turn, supply such broilers to the end-users for production of energy from waste. The Commissioner (Appeals)'s view is that since what is covered by Sl.No.237 of Notification No.6/2002-CE is the non-conventional energy devices/ systems and since there is very thin distinction between part and device, as the device is thing made for a particular purpose and since chimney being an integral part of the biomass fired broiler can be treated as a device for non-conventional energy devices/systems, the exemption under this Notification would be available to the chimneys. We agree with the view of the Commissioner (Appeals), as rightly observed by the Commissioner (Appeals), the device is a thing made for a particular purpose and as such the chimney meant for biomass fired boiler has to be treated as non-conventional energy device. 7.2 On the same issue, this Tribunal in another judgement in the case of Shree Venkateswara Engg Corporation (supra) upheld the exemption benefit to complete device cleared in knocked down condition. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... If such intention can be gathered from the construction of the words of the notification or by necessary implication therefrom, the matter is different. We notice from the findings of the lower authorities that the goods cleared by the appellants have reached finality in the sense that they have become identifiable goods though according to the lower authorities they are only parts. We find that this conclusion has not been arrived at based upon the description of the items in the said notification with reference to the exemption claim as we have already mentioned that the description would cover all devices without reference to the nature of the device or description of the devices. If the items cleared have attained individual identity and finality it cannot be said it is not a device. Therefore, taking into consideration the specific description under which the exemption is allowed, we have no hesitation in allowing the exemption as the items in question are only devices for the purpose of conversion of the waste material into non conventional energy for which purpose the exemption is granted. 7.3 In view of the judicial pronouncements made in the issue, we hold that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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