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TMI Blog2021 (10) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd.[2018(18) GSTL 327 (A.A.R.GST)] and M/s Enexio Power Cooling Solutions India Pvt. Ltd. [2018(19) GSTL 135 (A.A.R.-GST)]. 2. The appellant raised the following question for advance ruling before the GAAR:- (i) What is the classification and rate of tax payable in respect of Agro Waste Thermic Fluid Heater or Boiler and parts thereof considering the applicability of Sl. No. 234 of Schedule I to Notification No. 01/2017- Central Tax (Rate) dated 28.06.2017 and corresponding notifications issued under State GST law and IGST Act? 3. The GAAR has examined the issue and has observed that Schedule I of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 and corresponding Notification No. 1/2017-State Tax (Rate) dated 30.06.2017 (the Central Tax (Rate) Notification referred herein after includes the reference to corresponding State Tax (Rate) Notification also] covers the listed renewable energy devices and parts for their manufacture which attract 2.5% CGST including Waste to energy plants / devices (energy should be created from waste i.e. fuel used should inevitable be 'waste'). The GAAR has observed that the appellant has presented partial facts and remained silent on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the GAAR has mentioned in the Advance Ruling that the applicant has sought an advance ruling in the 'matter of classification and rate of GST applicable on the parts being supplied for setting up Waste to Energy Plant', which is not the case / matter under the application for advance ruling; that the appellant had approached the GAAR for the product manufactured i.e. Biomass Fired (Steam) Boilers, Agro Waste Thermic Fluid Heater. The appellant has further submitted that there is no dispute in classification of Biomass Fired (Steam) Boilers, Agro Waste Thermic Fluid Heater, which gets classified under Tariff Item 8402 19 90 of the CTA, 1975. It has also been submitted that the GAAR has referred Company's website and from there, they have taken into consideration variety of product range of boilers and heaters with numerous screenshots mentioning in ruling, except the product Biomass Fired (Steam) Boilers and Agro Waste Thermic Fluid Heater, which are actually the product put before the learned authority for answering. 4.3 The appellant has submitted that the GAAR has erred by stating that fuel used in the boiler are conventional elements like Coal, Lignite etc., however that is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the fuel used are in the nature of Agro Waste exclusively and no other types of fuel can be used when it comes to Biomass Fired (Steam) Boilers, Agro Waste Thermic Fluid Heater. The appellant has submitted that the vital part of the Boiler is the stage of energy generation. The biomass / agro waste is stored and is pushed into the furnace for combustion by help of fuel feeder. In the course of burning of waste, the heat is generated and from other part of boiler, water is pumped into, herein the heat evaporates the water which turns into steam and this is the stage where energy is generated in the boiler. 4.10 The appellant has further submitted that the different dimension of clause (e) of aforesaid Entry No. 234 is self-explanatory that "Waste to Energy Plant / Devices" formally means a waste (also known as fuel) used / deposited in Plant or device that results into generation of energy. The appellant has submitted that the first dimension to the clause (e) of aforesaid Entry No. 234 is the word "Waste" i.e. Agro Waste which is not defined under GST Law, therefore meaning of the same as per trade parlance and other references may be referred. The appellant has referred to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cussion is usually done by the Food processing unit. 4.15 The appellant has contended that in terms of aforesaid explanation, the product Biomass Fired (Steam) Boilers, Agro Waste Thermic Fluid Heater squarely fall in clause (e) to Entry 234 of Notification No. 1/2017-Central Tax (Rate) as it fulfills the requirements of using waste (also known as fuel) which leads to generation of energy in a Plant (Boiler) and is eligible for concession rate of GST at 5%. 5. The appellant, vide letter dated 18.01.2021, has submitted Inspection Report, Performance Certificate and Product Catalogues, certified by the Chartered Engineer in respect of Agro Waste Fired Thermic Fluid Heaters and Agro Waste Fired Steam Boilers. FINDINGS :- 6. We have considered the submissions made by the appellant in the appeal filed by them and in additional written submission as well as submissions at the time of personal hearing, Ruling given by the GAAR and other evidences available on record. 7. The issue involved in the present case is whether the products Biomass Fired (Steam) Boilers, Agro Waste Thermic Fluid Heater are covered under Entry at Sl. No. 234(e) of Schedule I of Notification No. 1/2017-Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erring to the meaning of each of the terms "Waste", "Energy" and "Plant" separately, as suggested by the appellant, would not be correct approach to understand the true meaning of the phrase "Waste to energy plants / devices" used at clause (e) of Entry at Sl. No. 234 of Schedule - I of Notification No. 1/2017-Central Tax (Rate), as the "Waste to Energy Plant" (WTEP) itself is a complete phrase, which refers to a specific 'renewable energy device / plant'. 9.3 In support of our above view, we may refer to the Government of India, Ministry of Environment, Forest and Climate Change, Notification S.O. 1357(E) dated 08.04.2016 whereby the Solid Waste Management Rules, 2016, have been notified. The said Solid Waste Management Rules, 2016 inter-alia provides as follows - 9. Duties of the Ministry of Power.-The Ministry of Power through appropriate mechanisms shall,- (a) decide tariff or charges for the power generated from the waste to energy plants based on solid waste. (b) compulsory purchase power generated from such waste to energy plants by distribution company. 10. Duties of Ministry of New and Renewable Energy Sources- The Ministry of New and Renewable Energy Sources thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Agencies - Service Charge @ 1% of the Subsidy restricted to Rs. 5.00 lakh per project; d. According to the amended Tariff Policy, Distribution Licensee(s) shall compulsorily procure 100% power produced from all the Waste-to-Energy plants in the State, in the ratio of their procurement of power from all sources including their own, at the tariff determined by the Appropriate Commission under Section 62 of the Act. It is thus evident from the foregoing that the objectives of "Waste to Energy Plant" includes 'recovery of energy in the form of Biogas / BioCNG / Enriched Biogas / Power'. 9.5 The Government of Gujarat, Energy and Petrochemicals Department has issued 'Gujarat Waste to Energy Policy - 2016' vide G.R. No. REN-11-20151343B dated 28.03.2016. In the preamble of the said Policy, it has been mentioned as follows - "1.2 Though MSW has potential to be a source of renewable energy, it has not been harnessed or exploited systematically on a significant scale. It is estimated that the MSW of Gujarat State could support Waste to Energy plant of approximately 100 MW. Using MSW as fuel for generation of electricity could increase efficiency of collection and also help in more e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of heat for a boiler is combustion of any of several fuels (also called as Biomass / Agro Waste)." The products Biomas Fired (Steam) Boilers, Agro Waste Thermic Fluid Heater of the appellant in itself do not conform to the above description of the 'Waste to Energy Plant' submitted by the appellant inasmuch as the steam boiler is stated to be a power generation device, used for generating steam by applying the heat energy to water whereas it is stated that the coil heats the thermal oil or fluid that is pumped through the thermal oil boiler and the thermal oil heats coil in various types of heat users. 10.3 The appellant has submitted that during the process of combustion in the boiler chamber i.e. burning of biomass fuel / agro waste, both heat and steam are generated which are the form of "energy". However, as elaborately discussed above, the "Waste to Energy Plant / devices" mentioned at clause (e) of Entry at Sl. No. 234 of Schedule I of Notification No. 1/2017-Central Tax (Rate) do not refer to 'boilers generating heat and steam'. Therefore, the products of the appellant are not covered under the said clause (e) of Entry at Sl. No. 234. 10.4 In case the products of the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g units. 10.6 In view of the foregoing, we hold that the products Biomas Fired (Steam) Boilers, Agro Waste Thermic Fluid Heater being supplied by the appellant are not covered by Entry at Sl. No. 234 of Schedule - I of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 and corresponding Notification No. 1/2017-State Tax (Rate) dated 30.06.2017. 11.1 We have already noted that Entry at Sl. No. 234 of Schedule - I of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 covers specific 'renewable energy devices'. Therefore, only those 'renewable energy devices and parts for their manufacture' get covered under the said entry at Sl. No. 234. The other plants / devices, which use non-conventional fuel / renewable fuel, will not get covered under the said entry at Sl. No. 234 merely on that ground. Therefore, the products of the appellant, which uses agro-waste (bio-mass) and not conventional fuels like coal and lignite, will not get covered under the said Entry at Sl. No. 234 on this ground alone, unless it is specifically covered under any of the clauses (a) to (h) of the said Entry at Sl. No. 234. 11.2 Sl. No. 332 of Notification No. 12/2012-Central Excise dated 17. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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