2017 (8) TMI 307 - AT - Central Excise

Solar Power Plant Components Exempt Under Notification No.15/2010-CE

M/s Phenix Construction Technology Versus Commissioner of C. Ex. & S. Tax, Ahmedabad-II

The Tribunal found that the structures and parts of structures manufactured and cleared for the initial setting up of a solar power plant were considered ... Benefit of N/N. 15/2010-CE, dt.27.02.2010 - clearance of structures and parts of structures for initial setting up of solar power plant - whether the structures and parts of structures manufactured and cleared for initial setting up of solar power plant consisting of reflector, support beam, support post, upper/middle/lower vertical leg weldment, cross beam are eligible to the benefit of N/N. 15/2010-CE, dt.27.02.2010 as amended? Held that: - all items of machinery are exempted which included prime movers, instruments, apparatus and appliances, control gear and transmission equipments and auxiliary equipments (including those required for testing and quality control) and components. Needless to say that the said notification covers a wide range of items including those mentioned in the inclusive clause, comprising of machinery required for setting up of a solar power generation project or facility. The Larger Bench of the Tribunal in the case of Rakhoh Enterprises [2016 (11) TMI 1207 - CESTAT MUMBAI], while considering the eligibility of the items viz. ‘doors of windmills’ under the exemption under N/N. 6/2006-CE as amended observed that these are parts of ‘Wind Operated Electricity Generator’ (WOEG) and eligible to the benefit of notification. The items in question definitely be considered as ‘components’ of the reflector, undisputedly used being required for initial setting up of a solar power generation project or facility, hence eligible to the benefit of exemption N/N. 15/2002CE dt.27.02.20010, as amended - appeal allowed - decided in favor of appellant. Issues Involved:1. Whether the structures and parts of structures manufactured and cleared for initial setting up of a solar power plant are eligible for the benefit of Notification No.15/2010-CE, dated 27.02.2010 as amended by Notification No.26/2012-CE, dated 08.05.2012.Issue-wise Detailed Analysis:1. Eligibility for Exemption under Notification No.15/2010-CE:The primary issue was whether the structures and parts of structures manufactured and cleared by the Appellant for the initial setting up of a solar power plant could be considered as 'components' required for the solar power generation project, thus eligible for exemption under Notification No.15/2010-CE, dated 27.02.2010.Arguments by Appellant:The Appellant argued that the steel structures, which included reflector support beams, support posts, and various weldments, were essential for supporting solar panels and components for the initial setup of a solar power generation project. The Appellant provided certificates from the Ministry of New and Renewable Energy recommending the grant of the said exemption. The structures were described in the invoices and packing lists as parts of the solar plant, and according to the Appellant, these were used to mount the reflectors and receivers, which are crucial components of the solar power generation system.Arguments by Revenue:The Revenue contended that the steel structures classified under Chapter 73 of Central Excise Tariff Act, 1985, could not be considered 'components' and thus were not eligible for the exemption. The Adjudicating authority, referencing a circular issued by the Board dated 06.08.2012, argued that the steel structures used for civil work, such as constructing buildings and storage tanks, were specifically excluded from the exemption.Tribunal's Findings:The Tribunal examined the Notification No.15/2010-CE and its amendment, which exempted all items of machinery and components required for the initial setup of a solar power generation project. The Tribunal noted that the items in dispute were used as support structures holding the reflectors, an essential part of the solar power generation system. The Tribunal referred to technical literature and manuals from the Ministry of New and Renewable Energy that described these support structures as key components of the solar power generation system.The Tribunal also considered various judicial precedents and definitions of 'components' and 'parts' to conclude that the support structures in question were indeed 'components' necessary for the solar power generation project. The Tribunal found no evidence to support the Revenue's claim that these items were used for civil construction work.Conclusion:The Tribunal concluded that the structures and parts of structures manufactured and cleared by the Appellant were indeed 'components' required for the initial setting up of a solar power generation project. Therefore, they were eligible for the benefit of the exemption under Notification No.15/2010-CE as amended. The impugned order was set aside, and the appeal was allowed with consequential relief as per law.