Exemption for windmill components extends to imported parts used exclusively in hydraulic systems for wind-powered generators.

Imported parts used exclusively in hydraulic systems for windmills were held to fall within the principal exemption for wind operated electricity generators, because the notification expressly covered the generator, its components and parts. On that basis, the additional customs duty demand was unsustainable. The alternative entry was not examined further once coverage under the main exemption was established. The decision confirms that parts used solely in exempt windmill-related systems can qualify for exemption on the principal entry itself.

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Issues: (i) Whether imported parts used in hydraulic systems manufactured for windmills were eligible for exemption from additional customs duty under List 8, Sl. No. 13 of Notification No. 12/12-CE dated 17.03.2012; (ii) whether relief could be sustained under the alternative entry in Sl. No. 21 of the same List.

Issue (i): Whether imported parts used in hydraulic systems manufactured for windmills were eligible for exemption from additional customs duty under List 8, Sl. No. 13 of Notification No. 12/12-CE dated 17.03.2012.

Analysis: The imported goods were used in hydraulic systems meant exclusively for windmills. The entry in Sl. No. 13 covered wind operated electricity generators, including their components and parts, and the exemption extended not only to complete systems but also to components and parts thereof. On the record, there was nothing to show that the imported parts were used for any purpose other than in windmill-related hydraulic systems. The goods therefore fell within the basic exemption entry for non-conventional energy devices or systems.

Conclusion: The exemption under Sl. No. 13 applied, and the demand of additional customs duty was not sustainable.

Issue (ii): Whether relief could be sustained under the alternative entry in Sl. No. 21 of the same List.

Analysis: Once the goods were found to be covered by the primary exemption entry in Sl. No. 13, it was unnecessary to examine the alternative basis under Sl. No. 21.

Conclusion: The alternative entry did not require adjudication and was not to the outcome.

Final Conclusion: The imported parts were treated as covered by the principal exemption entry for windmill-related systems, and the Revenue's appeals were rejected.

Ratio Decidendi: Where a notification exempts a system and its components and parts, imported parts used exclusively in manufacture of such exempt windmill-related systems are entitled to the exemption on the principal entry itself.

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