Non-conventional energy exemption applies to components used in a complete system, not only to standalone power-generating equipment.

Goods such as bus duct, control panel, ICAM system and static convertor qualified for exemption under Notification No. 6/2002-CE when used in a non-conventional energy device or system. The exemption was supported by a certificate from the State non-conventional energy development corporation confirming use in the power project, and by the Board's circular stating that machinery, components and equipment forming part of a complete control equipment or system may qualify on proper evidence. A view that the items must independently generate energy was rejected as too narrow and inconsistent with the object of the notification, so the exemption was upheld.

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Issues: Whether the goods cleared as bus duct, control panel, Icam system and static convertor were entitled to exemption under Notification No. 6/2002-CE as goods used in a non-conventional energy device or system.

Analysis: The exemption was available where the goods were used in a non-conventional energy device or system. The assessee produced a certificate from the State non-conventional energy development corporation stating that the goods were required for the power project. The appellate authority also relied on the Board's circular clarifying that machinery, components and equipment forming part of a complete control equipment or system would qualify for the benefit if supported by evidence of supply for such system. The denial by the original authority rested only on the ground that the items did not generate energy independently, but that approach would improperly confine the notification to suppliers of the entire system and defeat the object of the exemption.

Conclusion: The goods qualified for the exemption and the revenue's challenge had no merit.

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