Exemption for solar photovoltaic inputs extended to imported raw material used in manufacturing modules and panels.

Sl. No. 18 of Notification No. 205/88-CE was construed to extend exemption to imported raw material used in manufacturing solar photovoltaic modules and panels, not merely to parts captively consumed in the factory of production of such parts. The narrower reading adopted below was considered inconsistent with the language and object of the notification. The provision was read in light of the policy to reduce the cost of non-conventional energy devices by granting duty relief on inputs and parts used in their manufacture, and imported EVA film sheet was treated as covered.

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Issues: Whether Sl. No. 18 of Notification No. 205/88-CE dated 25-5-88 granted exemption to imported raw material used in the manufacture of solar photovoltaic modules and panels, or only to parts captively consumed in the factory of production of such parts.

Analysis: The exemption at Sl. No. 18 referred to parts consumed within the factory for the manufacture of the specified goods. The narrower interpretation adopted by the lower authorities treated the expression as if it referred only to parts consumed in the production of such parts, which was held to be illogical and inconsistent with the object of the notification. The provision was construed in light of legislative intent to make non-conventional energy devices cheaper by relieving duty on inputs and parts used for their manufacture.

Conclusion: The exemption was held available to the appellants, and the imported EVA film sheet was covered by the notification.

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