CESTAT Chennai: Towers for Windmills Classified under CET Sub-Heading 7308.20, Exemption Denied

The Appellate Tribunal, CESTAT, Chennai, classified towers for windmills under CET Sub-Heading 7308.20, attracting a duty of 15%. The tribunal held that towers fell under this classification as Chapter Heading 73.08 specifically covers towers, rejecting the claimed residuary heading 8412.00. Additionally, the tribunal ruled that the appellants were not eligible for exemption under Notification No. 205/88 during the relevant period (Sept.'94 to Jan'95) as only complete windmills were covered, not parts like the towers in question. The tribunal upheld the impugned order, denying the appeal on classification and exemption eligibility grounds.

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Issues: Classification of towers for windmills under CET Sub-Heading 7308.20 vs. 8412.00, eligibility for exemption under Notification No. 205/88.

Classification Issue: The Appellate Tribunal, CESTAT, Chennai, addressed the classification of towers for windmills manufactured by the appellants. The lower appellate authority classified the towers under CET Sub-Heading 7308.20, which covers structures of iron and steel, including towers, attracting a duty of 15%. The tribunal noted that Chapter Heading 73.08 specifically covers towers and lattice masts, while the heading claimed by the assessees (8412.00) is a residuary heading. It was emphasized that there is no exclusion of any type of tower from coverage under Chapter Heading 73.08. Therefore, the tribunal held that the towers fell under CET Sub-Heading 7308.20 and were rightly classified as such.

Exemption Issue: Regarding the benefit of exemption under Notification No. 205/88, the tribunal clarified that during the relevant period (Sept.'94 to Jan'95), only complete windmills were covered under the notification. The notification was expanded to include parts of windmills from 16-3-95 onwards. As the towers in question were parts of windmills and not covered under the notification during the disputed period, the tribunal held that the appellants were not eligible for the exemption. Consequently, the tribunal upheld the impugned order, rejecting the appeal on the grounds of classification and exemption eligibility.

This detailed analysis of the judgment by the Appellate Tribunal, CESTAT, Chennai, provides a comprehensive overview of the classification and exemption issues involved in the case concerning towers for windmills.

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