TMI Blog2024 (4) TMI 625X X X X Extracts X X X X X X X X Extracts X X X X ..... y into electrical energy resulting into generation of electricity. There are merit in the observation of the learned Commissioner which is based on technical opinion and also the detailed study of the manufacturing process of pole shoe and its ultimate use in the generator which has not been contradicted in any manner by the Revenue in the grounds of appeal. The Revenue in the grounds of appeal has simply stated the pole sole is part of rotor which in turn parts of the WOEG, implies that any part of the parts of the WOEG is covered under Sl.No.21 of the said list and not sr. no. 13 of the said List 5/8 of the Notification. There is a fallacy in the approach of the Revenue in appreciating the facts, inasmuch as the rotor assembly used inside the WOEG is different from the rotors which is placed outside the generator, but an essential part of the wind mill and accordingly allowed exemption - pole shoe being part of the rotor assembly which in turn used in the generator and a part of the WOEG, hence squarely covered by the N/N. 6/2006CE dated 01.3.2006 and No.12/2012CE dt 17.3.2012. The Judgement cited by the learned AR for the Revenue viz. Raydean Industries case [ 2022 (4) TMI 1155 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assembly which in turn is a part of the Wind Operated Electricity Generator(WOEG for short) is not covered under Sl.No.13 of List 5 / 8 of the Notification. But, as per Sl.No.21 of the said List 5 /8 of the relevant notifications, exemption is available to parts consumed within the factory of production of such parts for manufacture of WOEG since it is not consumed in the factory of the respondent but cleared to customers to be used ultimately in the assembly of rotor; therefore the respondents are not eligible to availed the benefit of notifications. 3.2. Further the learned AR for the Revenue submitted that as per Board s Circular No.1008/15/2015-CX dt. 20/10/2015, it has been clarified that the following parts / components to be treated as parts and components of WOEG and accordingly eligible for exemption under Notification No.12/2012-CE dt. 17/03/2012. i. Tower: which supports the nacelle and rotor assembly of a wing operated electricity generator. ii. Nacelle: which contains of gearbox, generator, yaw components, flexible couplings, brake hydraulic, brake callipers, sensors, nacelle plate, nacelle cover and other smaller components. iii. Rotor: consists of blades, hub, noseco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of such parts for the manufacture of goods specified at Sl.No.13. Further it is submitted by the learned AR that the entry at item Sl.No.21 has been omitted w.e.f. 11/07/2014; instead of a new exemption No.332A was inserted within condition at Sl.No.2 stating that in the event the parts are used elsewhere in the factory of product, the procedure laid down in the Central Excise (Removal of Goods at Concessional rate of Duty for Manufacture of Excisable Goods) Rules, 2001 need to be followed. Therefore, the parts manufactured by the respondent viz. pole shoe used elsewhere than in the factory of production will be covered under the new entry at Sl.No.332A w.e.f. 11/07/2014; hence it can be safely inferred that entry at item Sl.No.13 of list 8 is not applicable to them for the period earlier. 3.5. Distinguishing the case law referred to by the learned Commissioner, the learned AR has submitted that the said judgment was passed before the Larger Bench judgment in the case of CC (Import), Mumbai Vs. Dilip Kumar Company reported in 2018(361) ELT 577 (SC). By the said judgment, the Hon ble Supreme Court has overruled earlier decision in the case of Sun Export Corporation Vs. CC [1997 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tured by respondent is eligible for exemption from duty for the period December 2009 to 16/03/2012 under Sl.No.84, which reads as any chapter for non-conventional energy devices / systems specified in List 5 and List 5, Sl.No.13 Wind operated electricity generator, its components and parts thereof including rotor and wind turbine controller and for the period 17/03/2012 to June 2014 under Sl.No.332 read with List 8, exemption is for any chapter for non-conventional energy devices / systems specified in List 8. It is their contention that exemption is available for WOEG and its components and parts. It is also their argument that windmill coils / pole shoe is a component and generator rotor assembly and in turn generator rotor assembly is an essential part of WOEG. In support, they have referred to the dictionary meaning of components and the judgment of Hon ble Supreme Court in the case of Star Paper Mills Vs. CCE [1989 4 SCC 724], Precision Rubber Industries vs. CCE [1990(49) ELT 170 (Bom.)]. Also they have submitted that parts or components of WOEG has been held to be admissible in the following judgments:- i. Gemini Instratech pvt. Ltd. Vs. CCE [2014(300) ELT 446 (Tri. Mum.)] ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the final products. 4.8. Further they have raised the issue of quantification of the demand by pointing out that various discrepancies in the computation of the demand which need to be considered. Further they have submitted that if demand is sustainable, the appellant would be entitled to claim cenvat credit on the inputs used in the manufacture of pole shoes. 4.9. On the issue of limitation, the learned advocate for the respondent has submitted that they have been clearing the pole shoes from the year 2005-06 and the Department has recorded this fact in the show-cause notice dt. 16/06/2006 and Order-in-Original No.1/2007 dt. 27/02/2007 was passed; hence extended period could not be invoked. As the first show-cause notice issued, all the relevant facts were within the knowledge of the authorities; therefore subsequent notices, extended period cannot be invoked. In support, they have referred to the judgment of the Hon ble Supreme Court in the case of Nizam Sugars Factory Vs. CCE, AP [2006(197) ELT 465 (SC)]. 5. Heard both sides and perused records 6. The issues involved in the present appeal for determination are whether the respondents are entitled to the benefit of Sl.No.84 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 aero-generator and battery charger (15) Bio-gas plant and bio-gas engine (16) Agricultural, forestry, agro-industrial, industrial, municipal and urban waste conversion device producing energy (17) Equipment for utilising ocean waves energy (18) Solar lantern (19) Ocean thermal energy conversion system (20) Solar photovoltaic cell (21) Parts consumed within the factory of production of such parts for the manufacture of goods specified at S. Nos. 1 to 20 above. Notification No.12/2012-CE dt. 17/03/2012 Sl. 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 or 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ator and not a part of the rotor assembly as alleged in the show-cause notice. 12. The relevant portion of the findings of the learned Commissioner is reproduced as below:- 26. In the above background, the primary issue to be determined is whether the Pole shoe manufactured by the asessees is a part of the Rotor as alleged in the SCN or a part of the generator. For a proper understanding of the use and function of Pole shoe , the jurisdictional Assistant Commissioner/Range Officer was directed to visit the factory and conduct a study of the manufacturing process of Pole shoe and its usage in the Wing operated electricity generator . Accordingly, the JRO visited the factory on 22-06-2015 and submitted the following report. Pole Shoe is manufactured by the assesses by winding enamelled copper strip (approx.. 10 layers) on a polestack a steel base. Polestack is primarily a multilayer steel stack punched iinto the required size after tag-welding. Steel sheets of required size are purchased and sent to the jobworker for manufacturer of polestack. On receipt from the jobworker, the polestack is subjected to quality check, preheated to remove oil particles and is then weather coated with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art of the wind mill which generates mechanical energy using wind power, whereas, Generator rotor assembly is used inside the generator along with Generator stator assembly for generation of electricity. Therefore, it is evident that the Pole shoe manufactured by the assesses is a part of the Generator rotor assembly which is in turn a part of the Wind Turbine Generator and not a part of the Rotor as alleged in the SCN. 13. Analysing the relevant entries finally the learned Commissioner has observed that rotor and controller are items which are distinctly different from the generator being located outside the generator which are essential for generation of electricity; hence covered under Sl.No.13 of List 5/8 whereas pole shoe on the other hand is a part of the generator rotor assembly which rotates inside the generator stator assembly and converts mechanical energy into electrical energy resulting into generation of electricity. In other words, pole shoe is a part of the WOEG and hence eligible to exemption Notification No.6/2006-CE dated 01.3.2006 and Notification No.12/2012CE dated 17.3.2012. 14. We find merit in the observation of the learned Commissioner which is based on tech ..... X X X X Extracts X X X X X X X X Extracts X X X X
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