TaxTMI 
TaxTMI 
2015 (1) TMI 763
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....Section 11AB/11AA. 2.2. The second appeal relates 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 n....
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....sp; Sr. 13 : Wind operated electricity generator, its components and parts thereof including rotor and wind turbine controller. 3.1 It may be 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 Comm....
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....nd the functioning of the wind mill and the wind operated electricity generator (WOEG) with the help of detailed drawings and pictures. From the drawings it was shown 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 t....
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....r use in wind operated electricity generator". According to them this indicates that the WOEG and wind turbine are interchangeably used in common trade parlance. 5.3 Reading 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 (10....
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....detailed arguments made by him backed by judicial pronouncements. However, no purpose would be served by repeating the arguments because they have already been mentioned above in the 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 cove....
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.... mentioned above. In the present case, the parts in question namely Anchor rings, LSP and tower doors have nothing to do with the electricity generating system. The door at the base of the 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 t....
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....servations of the Hon'ble High Court in this very case of Rakhoh in the stay matter. The High Court in its order dt. 25th February 2014 observed that prima facie the exemption is not to an entire 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 ter....
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....ables are not entitled for exemption. We respectfully disagree with the view of Ld. Brothers because the wording in the present notification is even more restrictive whereas Notification 205/88 exempted parts 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. T....
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....tification No. 6/2006. In some returns the appellants have not claimed benefit of 'Notification No. 6/2006 or 12/2012. As regards the return for the month of April 2012 we note that the show cause notice in this 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. th....