TMI Blog2023 (7) TMI 823X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case, a sample purchase order is furnished by the assessee. This document shows that the purchase order is for supply of Agro Waste (Palm fibre) Fired Reciprocating Grate Boiler Agricultural Waste Conversion Device Producing Energy. The said purchase order is issued by M/s.Ruchi Soya Industries Ltd. The prices quoted are for supply of the entire boiler and erection and commission. It is no where mentioned in the purchase order that the payment is to be made for separate parts. It is stated in the purchase order that the equipment supply shall be completed in 8 months to suit commissioning within 9 months from the date of the purchase order along with 10% advance amount. The assessee company (not individual units) is liable to pay liquidated damages for the delay in supply and commissioning. All these go to show that the purchase order is for a complete boiler - On perusal of a sample invoice it is seen that the name and address of the factory is shown as assessee company i.e., M/s.Thermodyne Technologies Pvt. Ltd. The consignee name is shown as M/s.Ruchi Soya Industries Ltd., Unit II. The invoice which is for clearance of parts corresponds to the purchase order. At the colou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority has taken note of the fact that the earlier decision was in favour of the assessee and also that there was CERA and departmental audit conducted. There is no positive act of suppression of facts established by the department. We therefore hold that the demand set aside on the ground of limitation requires no interference. As already discussed there are no grounds to confirm the demand for the normal period and requires to be set aside. Appeal allowed. - EXCISE APPEAL No. 42207 to 42209 OF 2013, EXCISE APPEAL No.42211 OF 2013 and EXCISE APPEAL No. 42249 to 42252 OF 2013 - FINAL ORDER Nos.40562-40569/2023 - Dated:- 17-7-2023 - MS. SULEKHA BEEVI C.S., MEMBER (JUDICIAL) AND MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL) Mr. M.N. Bharathi, Advocate For the Assessee Mr. Rudra Pratap Singh, Additional Commissioner (A.R) For the Department ORDER The issue involved in all these appeals being the same and connected, they were heard together and disposed of by this common order. The parties are hereafter referred to as assessee and department for the sake of convenience. 2. Brief facts are that, the assessee-company, viz. M/s. Thermodyne Technolo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies for normal period. The department has filed appeals E/42207/2023, E/42208/2013, E/42209/2013 E/42211/2013 against that part of the order which set aside the demand for the extended period. The assessee has also filed cross objections in the appeals filed by the department. 5. The Ld. Counsel Sri M.N. Bharathi appeared and argued for the assessee. The Assessee company purchased one unit which was already functioning at 14, SIDCO, Industrial Estate, Ranipet, for manufacture of boilers and got registered with Central Excise Department on 18.02.2003. This unit started manufacture of different types of boilers depending on the orders received. To cater to the volume of orders received by assessee company and hence, it was found necessary to take more areas. The Industrial Estate provided ready-built factory sheds with fixed dimensional area. As there was no scope to identify a large vacant area and then build a factory in the same industrial estate, and as the available power capacity could not be enhanced to meet the additional requirement, assessee-company had to hire the sheds offered by SIDCO in the Industrial Estate. Accordingly, one more shed was taken at 29, SIDCO Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... logistics. The assessee has availed the exemption from payment of excise duty in terms of notification 6/2006 and later notification 12/2012. The Trade Notice No.40/92 dt. 6.06.1992 supports the contention of the assessee that exemption is eligible, if parts of boilers are removed for assembling at customer s site. 7. The Assistant Commissioner of Central Excise visited one of the units in September, 2012 and observed that the said unit was clearing only parts of boilers and not full boilers and hence the exemption under the notifications are not available to the goods cleared from the said unit of the assessee. Pursuant to this visit, the Superintendent of Central Excise, Range IV, Ranipet issued three letters OC No.240, 241 and 242, all dated 26.12.2012 asking the assessee to give the details of clearances of the goods made from all different units. Likewise, the Superintendent of Central Excise, Range I, Ranipet issued the assessee unit a letter OC NO.562 dated 26.12.2012 asking for similar details in respect of Unit V for the last one year period. The assessee then approached the Commissioner of Central Excise, Chennai III Commissionerate and vide letter dated 3.1.2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Department to comply with law. Otherwise, there was no need to register each unit separately. In such circumstances, the manufacturer is the assessee company itself and the clearances have been made by the assessee company. The learned adjudicating authority has not appreciated this fact but has considered the clearances made from individual units and dealt with the issue unitwise, instead of analysing whether the clearances are for the company or not. In view of this approach, the Commissioner has treated the clearances in an isolated manner and erred in holding that the units have cleared only parts and not complete boilers. On the other hand, the clearances from each unit have to be treated as made from the assessee company. Since the clearances so made when assembled at the site of the customer constitute a full boiler, the company has rightly availed the exemption under notification 6/2006-CE dated 1.3.2006, as amended, and 12/2012 CE dated 17.3.2012. 10. The size of a typical industrial boiler is huge. It is practically impossible for any manufacturer to manufacture the entire boiler under one roof. Boiler manufacturers would mostly manufacture the pressure parts and cer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng authority has declined to follow the said decision observing that at the relevant time the assessee company had only one unit and at present they are having more than one unit. The Ld. Counsel submitted that though there was only one unit the practice adopted was to clear the parts from the unit to the customer s site and assemble and commission the boiler at the customer s site. Even though the number of units have increased now, so as to meet the order requirement, the practice followed is the same. The Trade notice which was relied by the adjudicating authority at the relevant time is still applicable. 12. In the case of CCE, Pune I vs Thermax Bobcock and Wilcox Ltd - 2005 (182) E.L.T. 336 (Tri.-Mumbai), the Mumbai Bench also held that the different parts cleared in different lots shall be deemed to be a boiler. Essential parts of boiler 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 an unassembled form is removed in several lots on differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chapter would be eligible for exemption. 15. What is relevant is to examine whether the goods are Nonconventional Devices/systems producing energy. The word device is not defined in the notification or in the Act/Rules. Hence one has to go by the ordinary meaning. The word device means a contrivance, invention, thing adapted for a purpose (Oxford English Dictionary). All the different parts/components/boiler/pressure parts etc are nothing but devices designed for production of energy from non conventional sources. The impugned order does not say that the goods cleared are not devices. This plea of the assessee has been vaguely rejected by putting the onus on the assessee. The company received orders for supply of a complete Agro Waste Fired Boilers. On receipt of such order, the design and drawings were prepared which are customer specific and thereafter, manufacture took place. Proof from some customers confirming receipt of Agro Waste Fired Boilers was submitted by the assessee. The learned adjudicating authority ought to have accepted these evidences instead of brushing aside the submissions made by assessee by merely saying that the assessee has not let in any evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .C.); UOI Vs. Madras Steel Re-rollers Association - 2012 (278) E.L.T. 584 (S.C.); C.C.Ex, Vadodara Vs. Adarsh Re-rolling Mills - 2002 (143) E.L.T. 533 (Tri.-LB). The Commissioner ought to have followed the instructions of the Board and dropped the proceedings. 18. The goods cleared from different units are nothing but energy producing devices and they form a complete Agro waste fired boilers/Water Tube Boilers and rightly covered under Sl.No. (16) of the List 5 or List 8 of the relevant notifications referred supra. Accordingly, the assessee is entitled for the exemption under the above notifications. 19. The Ld. Counsel argued that it is common knowledge that the Government of India has been emphasizing and taking steps to augment the power production. In that direction, the usage of nonconventional sources are encouraged. This is to achieve twin objectives of (i) putting the agro-waste to productive purposes and (ii) prevent pollution of the environment. Accordingly the exemption is given to agro-waste fired boilers, when the agro waste is used for producing power. This exemption is in vogue for more than two decades. By giving a narrow interpretation, the beneficial notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that the onus to prove the eligibility of exemption is on the assessee and not on the department. Para 14 of the impugned order was adverted to by the Ld. A.R to argue that as per the invoices, the goods cleared were parts intended for erection of boilers. It is for the assessee to prove and substantiate by evidence. The assessee has failed to produce evidence as to how the goods cleared would constitute a complete boiler from a particular manufacturing unit. 22.1 In regard to OIO dt. 11.03.2004 decided in the assessee s own case, the Ld. A.R submitted that the said decision was rendered when the assessee had only one manufacturing unit. In the Trade Notice No.40/92 dt. 15.6.1992, the goods are eligible for exemption only if cleared in SKD / CKD condition for the purpose of convenience of transportation. In the present case, the parts are removed from different units to the customers premises. Such parts cleared from individual units cannot be considered as clearances in SKD / CKD conditions. The Trade Notice is of no support to the assessee. 22.2 The grounds in the appeals filed by department was reiterated in regard to the issue on limitation. The Ld. AR prayed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hapter or heading or sub-heading or tariff item of the First Schedule Description of excisable goods Rate Condition No. 1 2 3 4 5 332 Any Chapter Non-conventional Devices /systems Specified in List 8 Nil . LIST 8 (See S. No. 332) (1) Flat plate solar Collector (2) Black continuously plated solar selective coating sheets (in cut length or in coil) and fins and tubes (3) Concentrating and 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 stills and desalination system (9) Solar pump based on solar thermal and solar photovoltaic conversion (10) Solar power generating system (11) Solar photovoltaic module and panel for water pumping and other applications (12) Solar crop drier and system (13) Wind operated electricity generator, its components and parts thereof including rotor and wind turbine controller (14) Water pumping wind mill, wind ae ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the respective units of the noticees were only parts of the boiler and the parts were not consumed within the factory of production and accordingly I hold that the impugned goods were not eligible for exemption under the Notification No.06/2006-CE dated 01.03.206 or 12/2012-CE dated 17.03.2012. 28. In the present case, a sample purchase order is furnished by the assessee. This document shows that the purchase order is for supply of Agro Waste (Palm fibre) Fired Reciprocating Grate Boiler Agricultural Waste Conversion Device Producing Energy. The said purchase order is issued by M/s.Ruchi Soya Industries Ltd. The prices quoted are for supply of the entire boiler and erection and commission. It is no where mentioned in the purchase order that the payment is to be made for separate parts. It is stated in the purchase order that the equipment supply shall be completed in 8 months to suit commissioning within 9 months from the date of the purchase order along with 10% advance amount. The assessee company (not individual units) is liable to pay liquidated damages for the delay in supply and commissioning. All these go to show that the purchase order is for a complete boil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to mention that classification is not relevant for availing the exemption and if the goods fall under the description in column 3 of the notification, the exemption would be available. From the above invoices, it can be seen that the assessee is mentioning the type of boiler for which the part is cleared. In the invoice above, which is of the year 3/2009 the Boiler is Palm waste Fired Boiler 45TPH, whereas the invoice dt. 3/2012 is Agrowaste Fired Travelling Grate Boiler 45TPH. Each boiler is customer specific. The parts are specific to each boiler. There is no case for the department that these parts have been cleared to third parties. The appellant has furnished all purchase orders and invoices, when called for on the basis of which the SCN has been issued. It would have been easy for the department to verify whether the boiler supplied confirms to the description as in the purchase order and the invoices. Instead the documents available before the department have been brushed aside to conclude that assessee has not produced any evidence. 30. The very same issue came up for consideration in the assessee s own case for the earlier period for which the SCN was issued the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. It has been further represented that FBCBs are generally cleared in unassembled or disassembled condition by following any or all of the procedure as indicated below : (a) Supply pressure parts like boiler, drum, shell, furnace, economizer, superheater, fluidized bed combustion system comprising of in bed tubes, air box fluidizing air nozzle, fuel feed nozzle, feed line etc. from the factory of the manufacturer. (b) Suppl standard bought out items like pumps, fans, motors, valves, cables etc. direct to site from Vendors or receive the same at the stores and send it along with the manufactured components to site. (c) Structurals which act as support for mounting pressure parts and ducting which act as an enclosure to convey the flue gas from one heat recovery area to he other manufactured by sub-contractors and despatched along with the factory manufactured components 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. 3. The above issue has been examined by the Board and in ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parts cleared from the unit is in an CKD/SKD condition. In the present case, the adjudicating authority has refused to follow the trade notice and has held that parts are not cleared in CKD/SKD condition. In fact, the department had raised the very same ground when they filed appeal before the Tribunal. The relevant part of the Final order dt. 31.3.2009 passed by the Tribunal (2009 (247) ELT 263 (Tri.-Chennai) reads as under : 3 . The Revenue is in appeal against the above order. The following grounds are taken in the appeal. Boilers emerged only at site on assembly, erection etc. along with components received from other units of BHEL, imports and those sourced through vendors of BHEL. A functional boiler could not be erected with the components supplied by the assessee. The supply was made against orders received by the corporate office of BHEL at Delhi and components for the boilers were contributed by various divisions of BHEL. As per the invoices the goods cleared were classified by the assessees as boiler in CKD/SKD condition. No expert had opined that the clearances of BHEL constituted a boiler. For a machine to be described as cleared in SKD/CKD form, the component ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .L.T. A186 (S.C.). In the circumstances, we do not find any reason to interfere with the order of the Commissioner of Central Excise. 35. The matter was taken by the department to the Apex Cour, and vide judgment reported in CCE Vs BHEL the decision of the Tribunal was affirmed. [2018 (10) GSTL 3 (SC)] 5 . That apart, relying on the HSN note Part V under Section XVI, as extracted below, the aforesaid two authorities concluded that such components which are essential to classify the boiler as a machine, even if transported as components, must be understood to have been transported as a complete machine. Therefore, levy of duty should be under sub-heading 8402.10 and not sub-heading 8402.90 as claimed by the Revenue. HSN note Part V under Section XVI : For convenience of transport many machines and apparatus are transported in an unassembled state. Although in effect the goods are then a collection of parts, they are classified as being the machine in question and not in any separate heading for parts. The same applies to an incomplete machine having the features of the complete machine (see Part IV), presented unassembled (see also in this connection the General E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evade payment of duty. This means the invoices, purchase orders etc. has been properly accounted for by each unit. All documents have been furnished to the department. Further, the audit team had visited these units calling for details and documents. Verification and scrutiny was done during the department audit and CERA. It can be safely inferred from such facts that all the documents in the nature of purchase order and invoices issued by units were available for scrutiny by the officers of the department for the purpose of looking into the fact whether the parts cleared from unit is for the purpose of a complete boiler or not. There is no evidence furnished by the department to show that assessee unit have cleared parts to any other third party buyer. An order placed for boiler is customer specific. The Design and drawing are being customer specific, the parts manufactured are also to constitute a boiler for which the order has been placed. When all the documents are available to the department, the adjudicating authority has brushed aside the plea put forward by the assessee that parts cleared by different units constitute a complete boiler as per the purchase order of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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