Exemption for specially designed wind mill parts upheld despite separate tariff classification under another heading.

Exemption under Notification No. 205/88-C.E. applied to control panels, programmable logic control systems and automation systems specially designed for wind-operated electricity generators because the notification covered wind mills, their parts and specially designed devices used with them without restricting benefit to any tariff heading. The goods were found to be exclusively designed for wind mills, not for general use, and supported by an Electrical Inspectorate certificate. Their separate classification under Chapter 85 did not defeat the exemption, and Section Note 2(a) of Section XVI supported treatment of such parts in the appropriate heading. The Tribunal followed earlier decisions on specially designed parts used in exempted equipment and upheld the exemption.

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Issues: Whether control panels, programmable logic control systems and automation systems specially designed for wind operated electricity generators were eligible for exemption as parts of wind mills under Notification No. 205/88-C.E. despite their tariff classification under another heading.

Analysis: The exemption entry covered wind mills, parts of wind mills and specially designed devices which run on wind mills, and did not restrict the benefit to any particular tariff heading. The control panels were found to be specifically designed for wind mills, not capable of general use, and supported by the certificate of the Electrical Inspectorate. The classification argument under Chapter 85 did not answer the specific finding that the goods were parts meant exclusively for wind mills. Section Notes 2(a) of Section XVI of the Central Excise Tariff Act, 1985 also supported classification of parts in the appropriate heading, and the Tribunal relied on earlier decisions taking the same view for specially designed parts used in exempted equipment.

Conclusion: The goods were entitled to exemption under the notification as parts of wind mills, and the Revenue's appeals failed.

Final Conclusion: The exemption benefit was upheld on the footing that specially designed components for wind mills were covered by the notification irrespective of their independent tariff heading.

Ratio Decidendi: Where an exemption notification extends to parts of a specified machine or specially designed devices for its use and does not impose a tariff-heading restriction, specially designed components used exclusively for that machine are eligible for the benefit notwithstanding their separate classification.

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