TaxTMI 
TaxTMI 
2014 (10) TMI 808
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....nin Instratech Pvt. Ltd. (herein after referred to Gemini), who were denied benefit of exemption under notification No. 6/2006 dt. 1.3.2006 on the goods namely, wind mill doors, manufactured by them and cleared during the period April 2008-Sept-2008. The Commissioner (Appeals) upheld the order of Additional Commissioner in which demand of Rs. 10,84,298/- was confirmed along with penalty of Rs. 50,000/- under Rule 25 of the Central Excise Rules and appropriate interest was ordered to be paid. In the second order-in-appeal the Commissioner (Appeals) upheld the orders of lower authority confirming demands of Rs. 47,59,163/- with penalty of Rs. 2 lakhs under Rule 25 for the period October 2006 to March 2007 and demand of Rs. 45,23,649/- with penalty of Rs. 2 lakhs for the period April 2007 to March 2008 and interest at appropriate rate under Section 11AB. 3. The facts of the case are mentioned below. The notifications which are relevant in this case during different periods may be seen. The notifications No. 205/1988, No. 5/2005, No. 6/2006 and notification No. 12/2012 exempted certain goods specified in the table attached to the notifications. The relevant abstract of the table to t....
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....s and parts thereof including rotor and wind turbine controller". 3.2 In the case of Rakhoh it was held by the Commissioner that the exemption was limited to wind operated electricity generators (WOEG) and their components and parts. Although some components namely rotor and wind turbine controller were specifically included in the scope of the notifications from 1.3.2006, even applying the basic principles of interpretation ejusdem generis, the scope of the entry can by no stretch of imagination include the whole WOEG system/windmill including the tower and foundations parts thereof. As the anchor ring and load spreading plates are used in the foundation of wind mill tower, they cannot be said to be components of WOEG. According to the Commissioner, WOEG is not the entire wind mill system but is only one of the parts of the Wind Mill system. On the issue of limitation, the Commissioner held that the monthly E.R. 1 returns submitted by Rakhoh do not reveal the exact type and nature of goods manufactured and cleared for availing the exemption. In most of the returns the description of goods is mentioned as "Other Articles of Iron & Steel". In some returns, the benefit of Notificati....
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....box, generator, electronic control unit, yaw controller and brakes. The functioning of the wind mill works in the following manner: the rotor blades capture the wind energy and convert it to rotational energy of shaft to which the rotor blades are fixed. The shaft transfers the rotational energy into the generator. Then the role of the casing that holds the gear box, generator and electronic control unit comes into play. The gear box increases the speed of the shaft between the rotor hub and generator. The generator uses rotational energy of the shaft to generate electricity using electromagnetism principle. 5.1 It will not be necessary here to go into further details of the functioning of the system. It would suffice to know that the nacelle on which the rotor blades are fixed and which also contains the shafts etc. rests on the tower which may be as high as 40 to 80 mtrs. For the tower construction, generally a tubular construction of concrete or steel is used. The tower carries the weight of the nacelle and the rotor blades and the loads caused by the power of wind. It was further explained by the Ld. Counsel that the components of foundation embedment comprise of anchor rings,....
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....ill also get exempted as part of WOEG because without a tower the WOEG cannot function. There is a difference in the foundation for WOEG and the foundation for other machinery for stability purpose, he stated. They relied on the case of Hiten Fastners Pvt. Ltd. in Order issued by Additional Commissioner, Mysore, which held that nuts and bolts used in WOEG are eligible for exemption and decision of Commissioner of Central Excise Raipur dt. 28.2.2005 referred by a Bench of the Tribunal in the case of Gemini Instratech Pvt. Ltd. - 2013-TIOL-738-CESTAT-MUM. which allowed exemption to doors fitted in the tower. He further referred to case of Bharat Heavy Electricals Ltd. Vs. Collector of Customs Chennai reported in 1999 (108) ELT 448 (Tri.) and Hyundai Unitech Transmission Ltd. Vs. CCE, Nagpur reported in 2005 (187) ELT 312 (Tri.-Mum.) And the case of Pushpam Forgings Vs. Commissioner of Central Excise Raigad 2006 (193) ELT 334 (Tri.-Mum.) wherein the Tribunal held that once the tower is held to be part of WOEG and exempted, MS flanges which are part of tower will also be entitled for exemption. 5.4 The Ld. Counsel referred to the clarification of Board vide F.No. 524/2/97-Cus (TU) dt.....
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.... repeat the facts again. The Ld. A.R. drew our attention to the Supreme Court judgement in the case of Uniflex Cables Vs. Commissioner of Central Excise, Surat reported in 2011 (27) ELT 161 (S.C) in which the Hon'ble Court held that insulated electrical wires and cables designed for use in wind mills are not eligible for exemption under No. 205/88 as parts of wind mills or any specially designed devices. He referred to the Advance Ruling Authority's decision dt 18/3/2011 in the case of Enercon India in support of his stand. 8. We have carefully considered the submissions of both sides. 9. The short point to be decided is whether the LSP and anchor rings, and tower doors can be considered to be covered under 'wind operated electricity generator, its components and parts' which are exempted under Notification No. 6/2006 We may refer to the term 'wind operated electricity generator' as WOEG. The notifications No. 6/2006 and 12/2012 exempt non-conventional energy devices/systems specified in List-5/8 of the notfs. respectively. The corresponding goods specified in List-5/8 are "wind operated electricity generator, its components and parts thereof including rotor and w....
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....ferentiate between this foundation and the foundation of other machineries. We do not agree with this differentiation. All foundations of machinery provide strength stability and prevent vibration in the structure. The foundation in the present case is not different, even though it may be specially suited for a wind mill tower. 11. It was stated by the Ld. Counsel that various judicial pronouncements have allowed exemption to towers and their parts. No judicial pronouncement regarding exemption to foundation parts namely anchor rings and LSP has been shown to us. And here we would like to distinguish one fact which has not been appreciated by the appellants Rakhoh. Even if tower is considered to be part of the WOEG, which we don't agree with, we fail to understand how a foundation can be considered as part of the wind operated electricity generator. This is because the foundation includes steel items in concrete embedded in the ground. If appellants' view is accepted, then every foundation e.g. foundation made for a D.G. Set would also be considered as part of the D.G. Set, which is not so. Or, for that matter, if we consider the electricity generating machinery in a therm....
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....upon by the appellant is directly on the items which are the subject matter of the present appeal, the same would have to be examined at the final hearing of the appeal. The notification granting benefit has also undergone changes from time to time. Moreover, prima facie the exemption is to one of the items of windmill system i.e. wind operated electricity generator and its components and parts and not an entire windmill system.... The Tribunal shall make an endeavour to hear and decide the appeal within 3 months from the date the appellant makes pre-deposit of aggregate 25% of the total duty amount...................................." 13. Ld. Counsels have not been able to satisfy us that the terms wind mill (which includes tower and foundation) and wind operator electricity generator are synonymous or used interchangeably. The guidelines and the forms filed as per requirement of Ministry of New and Renewable Energy nowhere equate the two terms; in fact the Application form at Serial No. 1 (f) of the Ministry's format referred to by Ld. Counsel only refers to 'Forged Steel Rings for manufacture of special bearings for use in wind operated electricity gener....
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....hich was given to wind mills and devices. And therefore towers and their doors can by no stretch of imagination be considered as part of generator i.e. WOEG, which is only a part of a Wind Mill. Rather we find that Supreme Court agreed with the Tribunal's view that insulated cables are not parts of wind mills even though wind mill may not be able to function without these cables. The same rationale may be applied in the case of doors. In fact in the present case it could even be said that technically the generator can run without the tower door. This would hold even if doors are specifically designed for wind mill towers. 15.2 The appellants have relied on the judgement of Pushpam Forging (Supra) which allowed exemption to flanges used in towers and against which order the civil appeal filed by the Department was dismissed by Hon'ble Supreme Court on 20.1.2006. But this decision was not on merits. On the other hand, we find that in the case of Uniflex Cables Ltd. vs. Commissioner (supra) which is a later decision pronounced in 2011, the Supreme Court referring to the case of Nicco Corporation (supra) held that the electric cables cannot be considered as parts of wind mills....