TMI Blog2022 (11) TMI 1418X X X X Extracts X X X X X X X X Extracts X X X X ..... her than solar power plants or solar power projects' shall be substituted . Further, vide notification No. 2/2022- Customs, dated 1st February 2022, 'New power projects' registered after 30th September 2022 under project imports will attract 7.5% BCD rate. [S. No. 1(155 to 163) and IV (vii) of notification No. 2/2022-Customs, dated 1st February 2022 read with Clause 97(b) of the Finance Bill, 2022 refers]. However, there is no mention of whether any 'Power Project' would include 'Nuclear or Solar Power' as argued in the instant case. As per the current case, the inclusion of 'Nuclear and Solar Power' do not find any mention under the term 'Power Projects' under the Notification issued in context to the Project Import Tariffs or under extant Project Import Regulations, 1986. Thus, solar power plant transmission projects have been excluded from the purview of PIR, 1986 thereby machinery, raw material, components etc. required for setting up of solar power plants are not covered under heading 9801 read with PIR, 1986. - Shri Samar Nanda, Authority for Advance Rulings, Customs Shri Gulzar Didwania, Ms. Punita Bhuchar and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nery including prime movers, instruments, apparatus and appliances, control gear and transmission equipment, auxiliary equipment (including those required for research and development purposes, testing and quality control), as well as all components (whether finished or not) or raw materials for the manufacture of the aforesaid items and their components, required for the initial setting up of a unit, or the substantial expansion of an existing unit, of a specified POWER PROJECT . 3.2 The applicant has also stated that, the PIR, 1986, provides for eligibility and procedural aspect for claiming assessment under heading No. 98.01; as per regulation 4 of the said regulations, the assessment under the said heading No. 98.01 shall be available only to those goods which are imported (whether in one or more than one consignment) against one or more specific contracts, which have been registered with the appropriate Custom House in the manner specified in regulation 5; whereas, regulation 5 of the said regulations provides for registration of contracts, the extract of the regulation 5 are as under: 5. REGISTRATION OF CONTRACTS:-(1) Every importer claiming assessment of the goods und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le annexed to PIR, 1986, Secretary of the State Government or Union Territory concerned dealing with the subject power of electricity is considered as 'Sponsoring Authority' for the purposes of power plants and transmission projects; the term 'Power plant' has not been defined under Customs Act; accordingly, the dictionary meaning of the same has been reproduced as, a) a plant, including engines, dynamos, etc., and the building or buildings necessary for the generation of power, as electric or nuclear power, b) the machinery for supplying power for a particular mechanical process or operation, c) the engine, motor, or other power source along with related ignition, transmission, etc., components of a vehicle, aircraft, machine, etc.; they are of the view that a solar power plant is based on the conversion of sunlight into electricity, either directly using photovoltaics, or indirectly using concentrated solar power; they are generating electricity using PV cells and PV modules; accordingly, the solar plant projects proposed to be setup by them would squarely fall within the purview of term 'power plant'; they should be eligible for benefit under Chapter hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... generation projects (not for captive consumption) proposed to be set up and run by the applicant by harnessing the wind energy, if imported in accordance with the Project Import Regulations, 1986 will be eligible for classification under Tariff Heading No. 9801. ; this ruling further supports the claim that the intention of the Government is to cover the renewable energy power plants as well within the purview of term 'power project for the purpose of classification under Tariff heading 9801 read with Project Import Regulations; reference is also made to the erstwhile Notification No. 67/87-Customs dated 1-3-1987 which provided for concessional rate of Customs duty in case of import of goods for setting up of power projects. The explanation to the said notification defined the term, 'power project', and the same is read as Explanation: -For the purpose of this notification, the expression power projects (including gas turbine power projects)' shall mean such projects whose output or end-product is power, but shall not include captive power plants set up by projects engaged in activities other than power generation. ; in case of solar power projects as well the end ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Plant and Project in the Column no. 2; this means that the solar power projects/plants which gets excluded from Sr. Nos. 2 and 3 should get covered under the Sr. No. 4 of table for Sponsoring Authority in Project Import Regulations and the relevant sponsoring authority for such projects under Sr. No. 4 is Concerned Administrative Ministry or Department'; therefore, the solar power projects/plants should squarely fall within the purview of the term 'power projects' as provided under Chapter heading 98.01 of the First Schedule to Customs Tariff Act, 1975 read with PIR, 1986 and the relevant sponsoring authority for such solar power projects shall be the 'Concerned Administrative Ministry or Department' which is Ministry of New and Renewable Energy (MNRE) - being the nodal Ministry of the Government of India for all matters relating to new and renewable energy. 5. Following the procedure, comments have been sought from the concerned Commissioner of Customs. Comments of the concerned Commissioner of Customs, Nhava Sheva-V have not been received in this application for advance ruling however, I note that the concerned Commissioner, Nhava Sheva-V has furnished co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by representatives of the applicant who started with brief statement of facts, already given in the application. Thereafter, attention was invited to the PIR, 1986 and table annexed thereto, heading 9801 of the Customs Tariff Act, Chapter Note 2 of Chapter 98 of the Customs Tariff and comments of the concerned Principal Commissioner/Commissioner of Customs. Then, it was mentioned that the phrase, Power Project is not defined under the Customs Laws; accordingly, they would be considering its dictionary meaning, which relates the phrase to generation of power. Referring to the PIR, 1986. they mentioned that the Table annexed to the regulations refer only to the 'Sponsoring Authority' in relation to different Projects and taking into consideration the amendments carried out in PIR, 1986 vide Notification No. 54/2022-Customs dated 19-10-2022, it was interpreted that amendments have been carried out in Sl. Nos. 2 3 to exclude solar power plants and solar power projects. It was further stated that in absence of any such exclusion from Sl. No. 4 of the Table, same would be applicable to cover solar power plants and projects. They proceeded further and referring to the memorand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes as Sponsoring Authority as mandated under the Project Import Regulations. 7.3 Further, there are multiple entries made under the Explanatory Memorandum to the Finance Bill every year. However, only those portions find a place under the wordings of the Notification issued on the Budget Day or are part of the Finance Act are those which have got the approval of the Parliament. As per the current case, the inclusion of 'Nuclear and Solar Power' do not find any mention under the term 'Power Projects' under the Notification issued in context to the Project Import Tariffs or under extant Project Import Regulations, 1986. 7.4 Moreover, without going into discussion as to whether Sub-heading 98010013 is correct for import of various equipments and raw materials such as PV Modules, PV Cells, Inverter, Solar Cable, Power Cable, Transformers, Aluminium Frame, Solar Glass, Steel Structure, etc. for setting up of solar power plants, I intend to discuss PIR, 1986 as Chapter Note 2 of Chapter 98 lays down that heading 9801 to be taken to apply to all goods which are imported in accordance with the regulations made under section 157 of the Customs Act, 1962 and expression ..... 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