TaxTMI 
TaxTMI 
2022 (4) TMI 1155
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....and Central Governments under subsidy schemes of the Ministry of New and Renewable Energy, Government of India. According to the appellant, the water pumping systems have three critical components namely: (i) solar photo voltaic module or solar panel, (ii) AC or DC solar water pump with controller and (iii) module mounting structure with manual tracking facility. The appellant supplied the third component to the successful bidders and the material was sent to the location where the solar panels or solar water pumps were installed. The appellant further claims that the solar panels are fixed on these module mounting structures, which have the facility to track the movement of the sun from east to west so that solar energy is produced for maximum time period. 3. According to the appellant, module mounting structure are parts of the solar generating system, which system is exempted from payment of central excise duty at serial no. 332 of the notification dated 17.03.2012. The appellant, therefore, claimed exemption from payment of central excise duty on module mounting structures and cleared the goods against 'Nil' payment of central excise duty. 4. The relevant portion of the notif....
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....wed. 8. The department took a view that the appellant was not eligible for exemption under the notification and, accordingly, a show cause notice dated 04.01.2019 was issued demanding central excise duty of Rs. 7,71,30,460/- for the period December 2013 to June 2017. Interest was also demanded and penal provisions were invoked under section 11AC of the Excise Act as well as rule 27 of the Central Excise Rules, 2002 [the 2002 Rules]. 9. The appellant filed a reply to the show cause notice, but the Principal Commissioner, by order dated 18.07.2019, confirmed the demand of Rs. 6,85,64,844/- after accounting for cum-duty benefit. 10. Shri A.K. Prasad learned counsel appearing for the appellant made the following submissions: (i) Serial Number 332 of the notification dated 17.03.2012 prescribed 'nil' rate of duty to 'non-conventional energy devices or systems specified in List 8'. In other words the notification itself distinguishes a 'device' from a 'system' and this is also borne out by the various 'systems' included in List 8; (ii) An exemption under central excise law pre-supposes excisability of the product. In other words, exemption can only be provided to 'excisable goods....
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.... goods) comprising various 'systems', including the solar power generating system. In other words, each of the three components of the solar power generating system referred to above would be eligible for exemption under the said exemption notification. In this connection, reliance has been placed on the decision of the Madhya Pradesh High Court in Belectric Photovoltaic Tax vs. Commr. of Commercial Tax [2019 (21) G.S.T.L. 319 (M.P.)]; (vii) Since the items manufactured by the appellant are covered under serial No. 10 of List 8 of the above notification under the category of 'Solar Power Generating System', there is no need to take recourse to serial No. 21 of List 8 which refers to 'parts' consumed within the factory of production of such parts for the manufacture of goods specified at serial No. 1 to 20. On the basis of the interpretation given to the word 'system', serial No. 21 of List 8 will, in any case, not apply to 'systems' as it refers only to parts of 'goods' and not to parts of 'systems'; and (viii) If the interpretation adopted by the department is taken to be correct, it would defeat the very purpose of issuing the notification to encourage use of non-conventional....
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....he appellant claims that such exemption would be available at serial no. 332 of the said notification. The description of excisable goods at serial no. 332 is 'non-conventional energy devices or systems' specified in List 8 and the appellant has placed reliance upon serial number (10) of the List 8, which is 'solar power generating system'. The contention of the appellant is that the notification would not exempt the 'systems' mentioned in List 8, but various component comprising the system and since 'module mounting structures' is a component of the 'solar power generating system', it would be exempted from payment of central excise duty under this notification. 14. It is not possible to accept this contention of the learned counsel of the appellant. What has been exempted from payment of central excise duty under serial no. 332 of the notification dated 17.03.2012 is 'non-conventional energy devices or systems' specified in List 8. At serial number (10) of List 8, 'solar power generating system' is mentioned. Serial number (21) of List 8 mentions 'parts consumed within the factory of production of such parts for the manufacture of goods specified at serial numbers 1 to 20'. Onl....
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.... clearly devoid of merits. 5.6.5 I further find that the subject Notification No.:12/2012-CE dated 17.03.2012 was amended by Notification No.:12/2014-CE dated 11.07.2014 by omitting item no. (21) from the said List 8 and inserting a new Serial number 332A and entries relating thereto in the said Table after Serial No.332, ****** 5.6.6 The effect of the said amendment was that the Parts consumed within the factory of production of such parts for the manufacture of goods specified at S. Nos. 1 to 20 of List 8 were removed from Serial No. (21) of the List 8 and were separately included against the newly inserted Serial No. 332A in the Table to the said Notification on fulfillment of Condition No.2 specified in the Annexure to the Table of the said Notification. Prior to the amendment dated 11.07.2014, the Notification No.: 12/2012-CE dated 17.03.2012 exempted the parts of goods specified at S. Nos. 1 to 20 of the List 8 subject to the condition of their consumption within the factory of production of such parts for the manufacture of goods specified at S. Nos. 1 to 20. After the said amendment in the Notification No.:12/2012-CE dated 17.03.2012 vide Notification No.: 12/2014-CE d....
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.... not the 'solar power generating system'. 19. Learned counsel for the appellant placed strong reliance upon the judgment of the Madhya Pradesh High Court in Belectric Photovoltaic Tax. This judgment would not help the appellant. A writ petition was filed in the Madhya Pradesh High Court to assail the order passed by the Commissioner of Commercial Tax rejecting the application filed by the petitioner therein contending that the articles used for installing 'solar power generating system' are exempted from Value Added Tax. The State Government had framed a policy providing incentives to a developer, including exemption from Value Added Tax and at serial number 10 'solar power generating system' was mentioned. The contention of the appellant was that the existence of a sub-station was an essential practical requirement of 'solar power plant' and, therefore, this was also covered under the exemption. It is in this context that the Madhya Pradesh High Court observed as follows: "18. Even by taking into account the aforesaid judgment, this Court is of the opinion that power generating system includes all components even the grid/goods related to sub-station, without which, the system....