TaxTMI 
TaxTMI 
TaxTMI 
2015 (1) TMI 763
X X X X Extracts X X X X
X X X X Extracts X X X X
....lates to M/s. Gemini Instratech Pvt. Ltd. (hereinafter 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 spec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e seen from the notifications that exemtion is given to Non-conventional energy devices/systems specified in the list 5/list 8 of the respective notifications No. 6/2006 and 12/2012. The goods described in list5/list 8 are : "Wind operated electricity generator, its components 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 operator 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 notification 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 foundation 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that the wind mill consists of a foundation embedment which is a foundation on which the tower is fixed. Typically the horizontal axis wind turbines comprise of a foundation, a tower, electrical equipment, nacelle, shaft and rotor and rotor blades. The nacelle is a casing that holds the gear 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 const....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing the amendment of notification NO. 6/2002 by notification 6/2006, by which the parts namely the rotor and wind turbine controller were specifically mentioned for exemption in the notification No. 6/2006, Ld. Counsel stated that this only corroborates their stand that tower and foundation parts will 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-736-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 Centra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e case of the other appellant. 7. Revenue reiterated the findings of the adjudicating authorities. The Ld. A.R during the hearing presented a paper showing the structure and various components of a wind mill and its functioning. The same has already been detailed in paras above, so we may not repeat the facts again. The Ld. A.R. drew our attention to the Supreme Court judgment in the case of Uniflex Cables Vs. Commissioner of Central Excise, Surat reported in 2011 (271) 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 operator electricity ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tower only facilitates entry to the tower for maintenance of the machinery etc. The LSP and anchor rings are only parts of the foundation on which the tower is fixed. It is inconceivable that the foundation and its parts namely anchor rings and LSP are parts of WOEG. It is attempted by the appellant to differentiate 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 sgtructre. The foundation in the present case is no 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 appellant 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 foundati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re wind mill system. Hon'ble High Court stated that: "9) Having heard the learned Counsel for the appellant and the learned Counsel for the respondent-revenue, we are of the view that since none of the decisions relied 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. The Ld. Counsels have notbeen 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of complete wind mills, the Notification 6/2006 presently under consideration exempts only wind operated electricity generator and parts. Tower doors are not part of the wind operated electricity generator. Supreme Court in the case of Nicco Corporation (supra) had held that wires and cables used in wind mills are not entitled for the exemption which 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 mill 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'b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is case was issued on 1 st March 2013. Therefore, the demand from April 2012 onwards is within the time limit under Section 11A (1) of the Central Excise Act as applicable during the relevant time. The demand for the period prior to April 2012 is sustainable under extended time period under Section 11A(4) of the Act. In the case of Gemini, the demand is within normal time period. 17. We do not consider these cases fit for imposition of penalty as Gemini had been declaring the goods namely wind mill doors in their ER-1 returns. Further there have been contrary judgements on the issue as to what may be considered as parts of windmill and WOEG. 18. In our view, benefit of exemption notification 6/2006 should be denied and duty demands along with interest must be upheld and penalties be set aside. 19. In the case of M/s. Rakhoh Enterprises the duty demand along with interest is upheld. However, penalty is set aside. 20. In the case of Gemini Instratech Pvt. Ltd. though we could have decided this case finally on the basis of our findings recorded above, as a matter of judicial discipline the matter may be placed before the Hon'ble President for constitution of a Larger Bench bec....