TaxTMI 
TaxTMI 
TaxTMI 
2020 (5) TMI 504
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.... M/s Aura Electrochem Batteries Pvt Ltd) Survey No 143, Hissa No 1172, Vadagaon- Dhayari, Pune Sinhagad Road, Pune 411041. 2. I confirm demand of and order recovery of Central Excise duty of Rs. 36,89,995 (Rupees Thirty Six Lakhs Eighty Nine Thousand Nine Hundred and Ninety Five only) from M/s Aura Solar Products Pvt Ltd (formerly known as M/s Aura Electrochem Batteries Pvt Ltd) Survey No 143, Hissa No 1172, Vadagaon- Dhayari, Pune Sinhagad Road, Pune 411041 under proviso to sub section (1) of Section 11A of CEA, 1944. 3. I also order recovery of interest as applicable on delayed payment of Central Excise duty from M/s Aura Solar Products Pvt Ltd (formerly known as M/s Aura Electrochem Batteries Pvt Ltd) Survey No 143, Hissa No 1172, Vadagaon- Dhayari, Pune Sinhagad Road, Pune 411041 under Section 11AB of the CEA, 1944. 4. I impose a penalty of Rs. 36,89,995 (Rupees Thirty Six Lakhs Eighty Nine Thousand Nine Hundred and Ninety Five only) from M/s Aura Solar Products Pvt Ltd (formerly known as M/s Aura Electrochem Batteries Pvt Ltd) Survey No 143, Hissa No 1172, Vadagaon- Dhayari, Pune Sinhagad Road, Pune 411041 under Section 11AC of CEA, 1944. However if M/s Aura Solar Pro....
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....f the lamp/ lantern were drawn and technical opinion on the same was also taken from Prof Shri J K Nayak (in charge [energy Systems Engineering]) IIT Mumbai. 2.3 On the basis of investigations undertaken, it was alleged that "(a) The portable lantern by itself does not have any features to be called as a solar lantern. It was classifiable as "portable electric lamp designed to function with its own source of energy" under heading No 8513.00 (85130000) of CETA, 1985 and was liable to assessment under Section 4A of CEA, 1944. (b) The said lamp, when sold in combination with a PV Module, becomes "Photovoltaic Lighting system" or "Solar Lantern" as per the definition. The said system was classifiable under heading 8513.00 of CETA, 1985 and was referred to as "Solar Lantern" in the notification No 6/2002 and alike. (c) Removal of two lamps with one solar panel did not appeared eligible to be called as a "Solar Lantern" within the meaning of its definition and accordingly, as envisaged in the relevant Central Excise Notification, that wherever as envisaged in the relevant Central Excise Notification, that wherever an extra portable lamp has been supplied in a system as a solar l....
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.... appeal before Commissioner (Appeal), which was dismissed by him as per the impugned order. 2.9 Aggrieved appellants are in appeal before CESTAT. 3.1 We have heard Shri Prasad Paranjape, Advocate for the appellants and Shri Sanjay Hasija, Superintendent, Authorized Representative for the revenue. 3.2 Arguing for the appellants learned advocate submitted that- * It is settled principle of law that goods are to be assessed in the manner in which they are cleared from the factory. In the case in hand appellant clears solar lantern comprising of Solar PV Module with two charging points attached to it capable of charging two lamps simultaneously, along with 2 lamps with rechargeable battery; * At no point of time they have cleared a lamp individually i.e. without corresponding solar PV Module; * Exemption Notification needs to be interpreted as it is without adding or subtracting any words in the same. Notification exempts the goods namely "Solar Lantern" which have been cleared by them. Just because of technical innovation they are having solar PV Module with facility to charge two lamps simultaneously, it does not lose the character of being a solar lantern; * Other entries....
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....o function by its own source of energy i.e. dry batteries, accumulators etc. and depending on the source that powers the battery of the device, the lamp can become a solar lantern. In case the battery is powered through a solar device only then it can be termed as solar lantern or else the same is only an electric lantern; SPV Module which is a device comprising of photovoltaic cell that convert the solar energy to electric energy is the device powering the battery of lantern. Since the battery is basically powered by solar energy the whole system qualifies as a solar lantern; it is quite evident that solar lanterns cannot be there without a corresponding SPV module. Strictly there has to be one to one correlation between the Solar Lanterns cleared and the SPV's cleared. However in the exemption Notification No 6/2002-CE as amended the solar lantern (Solar System) is not defined. 47. The question is therefore whether two lamps connected in parallel to one solar photovoltaic panel should be allowed to full exemption to both or should the exemption be restricted to one lamp only. In interpreting exemption notification the eligibility criteria is always construed strictly. The ....
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....econd lamp in every set to take the benefit of the exemption and the second lamp of the set should be classified as an ordinary lamp and duty be levied on it accordingly. 49. Further the spirit of the exemption notification concerned is to promote the use of non conventional energy based systems. It does not allow the assessees to take benefit to avoid/ evade the Central Excise duty. The clearance of 2 nd or 3 rd lamp connected to one solar photovoltaic panel would lead to the grant of an unintended benefit of the notification contrary to the purpose of the notification. Therefore the second lamp is not eligible for exemption as it defeats the very purpose of notification. The said lamp is actually a simple portable electric lamp. The extra lamp does not have any feature to qualify as a solar system or solar lamp because it doesn't have its own solar panel to convert the solar energy to electric energy. Therefore, the said kit or package which has two lamps as far as the extra lamp is concerned, cannot qualify as a solar system or solar lantern. The noticee have thus misclassified the second lamp to take the benefit of the exemption by manipulating the actual facts." 4.3 F....
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....d in the lantern can be re charged by using solar power, that if solar power is available, then no other power supply is necessary, that if solar power is not available, the battery can be recharged from the regular supply using a suitable adapter. * With reference to question whether the battery contained in the lamp can be re charged by regular power supply and if so, whether any modification(s) in the lamp are required, Prof Nayak clarified that a battery can be charged with regular supply but a battery charger of suitable specifications will be required so that the charging does not affect the life of the battery. No modification in the lamp is however necessary. * With reference to the question whether the lamp/ lantern in the form in which it is sold (i.e. sampled form) by itself qualifies as solar lamp or solar lantern. Prof Nayak clarified that they have no idea as to how the lamp is sold. He further clarified to mean that if a lamp (given for testing) is sold as such, then it cannot be called a solar lamp or lantern." 4.5 From the opinion as reproduced above it's quite evident that it is not in respect of the package in the manner in which it is cleared. From the ....