TaxTMI 
TaxTMI 
TaxTMI 
2023 (4) TMI 1128
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....Sunshine Power Products Ltd. and M/s Sun Power Technologies Ltd. (Buyers), who were engaged in the business of manufacturing solar photovoltaic power generating systems and devices. The Appellant cleared the said batteries without payment of duty excise duty in terms of Sl. No. 237 (Read with List 9) of Notification No. 6/2002-CE dated 01.03.2002 and Sl. No. 84 (read with List 5) of Notification No. 6/2006-CE dated 01.03.2006, which exempted non-conventional energy devices/ systems specified in List 9 and 5, respectively. The Entry 10 of each of the said lists pertained to solar power generating systems and Entry 21 of each of the said lists pertained to 'parts' of the goods specified in the preceding entries of the lists. 3. Since the Appellant's products were to be used in the solar cell module only and the intent of the government was to exempt nonrenewable energy devices, the Appellant cleared their goods by claiming exemption under the S. No. 10 (and also 21) of the Lists 9/5 of the respective notifications. Since the entire turnover of Appellant was wholly exempt in terms of the above said Exemption Notifications, the Appellant did not obtain registration under CEA 1944 and ....
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....ced reliance on the case of CCE, Delhi-IV V. Rachitech Engineers Pvt. Ltd., 2015 (326) E.L.T. 377 (ri.-Del.), wherein the identical entry of the exemption notification was under consideration. The assessee supplied chimney of M/s ISGEC John Thompson who were manufacturing and supplying the complete boiler system to the end user, which system qualified for exemption under the S. No. 16 of the List 9 of the Notification No. 6/2002-CE, viz. "Agricultural, forestry, agro-industrial, industrial, municipal and urban waste conversion device producing energy". The department contended that chimney, being a part of the boiler system and not an energy producing device per se, is not eligible for exemption. However, the Hon'ble Tribunal held that chimney, being integral part of nonconventional energy devices/systems, is eligible for the exemption. 9. The said judgment has been followed in the case of Shree Venkateswara Engg. Corporation Vs. CCE, Coimbatore, 2016 (335) E.L.T. 62 Tri.-Chennai), Wherein the benefit of exemption was held to be available to the devices cleared in knocked down condition as parts. Similar proposition was upheld in the case of Walchandnagar Industries Ltd., Vs. CCE,....
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....me Court, reported at 2009 (235) E.L.T. 214 (S.C.). 13. Further, interpreting the identically worded entry [at S. No. 20 of the List 5 of the exemption notification No. 6/2000-CE], the Hon'ble CESTAT, Mumbai, in the case of Pushpam Forgings Vs. CCE-2006 (193) ELT 334 allowed the benefit of exemption on MS flanges, which is a part of a windmill even if they were not consumed within the factory of manufacture and cleared to the site for use in erection of towers which are a part of windmill. The Hon'ble Tribunal opined that by no stretch of imagination it would be possible to assemble a huge structure like a windmill in the factory. 14. Relying on the above said decisions, the Appellant submitted that the benefit of exemption under S. No. 21 of List 9/5 of the relevant exemption notifications is rightly admissible to them since the batteries were used in the factory by the buyers for manufacturing PV devices. 15. Regarding invoking of extended period in the Notice, the Appellant contended that they were under a bonafide belief that the exemption under the relevant exemption notifications was rightly claimed by them, in view of the various decisions cited above. They have not suppre....
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....ntral Excise Act, 1944 provides that the price actually paid for excisable goods to an assesse shall be deemed to be cum-duty price which shall be deemed to include duty payable on such excisable goods. 21. In this regard, they placed reliance on the judgment of the Hon'ble Tribunal in the case of Lubrizol Advanced Materials India Pvt. Ltd., Vs. CCE,. Vadodara -2013 (290) ELT 453 (Tri.-Ahmd.) wherein the benefit of cum-duty was allowed to the assessee upon disallowance of the exemption claimed. 22. Based on the aforementioned submissions, they contended that penalty is not imposable on Appellant No 1. They also claimed that personal penalty is not imposable on Appellant No. 2 since the key ingredients to invoke such penalty under Rule 26 of CER, 2002 are not being fulfilled in this case. In support of this argument, they relied upon the decision in the case of Kamdeep Marketing Pvt Ltd., Vs. CCE, Indore-2004 (165) ELT 206 (Tri.-Del.), wherein the Hon'ble Tribunal held that personal penalty imposed on proprietors ought to be set aside where penalty already imposed on firm. 23. The Department Representative contended that the batteries manufacture by the Appellant were compatible ....
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.... wherein it has been held that 'Module Mounting Structures' manufactured elsewhere and supplied to Solar Power Water Pumping Systems are not entitled for the benefit of Entry No 332 of the Notification 12/2012 CE dated 17.03.2012. The relevant portion of the order is reproduced below: "13. The issue that arises for consideration in this appeal is whether 'module mounting structures', which are manufactured by the appellant and which are supplied to suppliers of solar power water pumping systems for irrigating agriculture fields, is exempted from payment of central excise duty in terms of the notification dated 17.03.2012. The 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 'nonconventional 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 powe....
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....ower Generating System and is covered under List No.8 to the Notification No.:12/2012-CE (SI.No.332). 5.6.4 I also find that as per entry at serial number (21) of the List 8, the exemption from Central Excise Duty was available to the parts consumed within the factory of production of such parts for the manufacture of goods specified at S. Nos. 1 to 20 in List 8, which implies that the exemption is available to the parts only if they are consumed actively within the factory for manufacture of goods mentioned at S. Nos. 1 to 20 in List 8 of the 10 E/52480/2019 Notification No. 12/2012-CE dated 17.03.2012. Therefore, the contention of the Noticee is 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. (....
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....ter the said amendment the exemption is also available to parts of goods specified at serial numbers 1 to 20 of List 8 in a situation where it is consumed not only within the factory of production for the manufacture of goods specified in List 8 but also when used elsewhere than in the factory of production, subject of course to the condition that the procedure laid down in the relevant rules has been followed. 18. It is, therefore, not possible to accept the contention of learned counsel for the appellant that the 'module mounting structures' should be granted exemption from payment of excise duty in terms of the notification dated 17.03.2012 and 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 Go....
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.... benefits." 20. The Madhya Pradesh High Court was examining a policy framed by the State Government which was different from what is contained in the notification dated 17.03.2012 under consideration. It is seen that the notification dated 17.03.2012 while describing the excisable goods refers to 'non-conventional energy devices or systems specified in List 8'. Entry 21 of List 8 deals with 'parts consumed within the factory of production of such parts for the manufacture of goods specified at serial numbers 1 to 20'. It is only such parts which are exempted from payment of central excise duty. Such an entry is not contained in the policy of the State Government that was being examined by the Madhya Pradesh High Court. 21. An exemption notification has to be strictly construed, as was observed by the Supreme Court in Commnr. of Customs (import), Mumbai versus M/s. Dilip Kumar and Ors.8 and in Larsen & Toubro Ltd. versus Commissioner of Central Excise, Hyderabad9. 22. The distinction sought to be drawn by the learned counsel for the appellant between 'devices' and 'systems' is not of relevance to the present case because both nonconventional energy devices or systems specif....
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....ant for nonfulfilment of such condition. As can be seen, these two cases dealt with different issues, while considering the exemption under the same notification. 9. It is pertinent to note that in the submissions before us, the ld. Counsel for the appellant categorically asserted that the certificate for exemption issued by the Non-Conventional Energy Development Corporation of Andhra Pradesh Ltd. is for the exemption under Sl. No. 16 of the List 9 of the said notification. No claim for exemption is being made under Sl. No. 21 as "parts". That being the case, we note that there is no dispute to be resolved by the Larger Bench as the appellant is claiming exemption only under Sl. No. 16. Eligibility of the appellant for exemption under Sl. No. 16 has to be examined by the Division Bench considering the scope of the said entry and the nature of the impugned goods for which exemption is claimed." 28. In the present case, Exemption is provided to Solar Power Generating Systems. The Appellant manufactured 'Batteries' and supplied the same to the two manufacturers of Solar Power Generating Systems. The Experts Opinions submitted by the Appellant clearly indicate that they are speci....
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....urts bound to give effect to the said meaning irrespective of consequences - In applying rule of plain meaning any hardship and inconvenience cannot be the basis to alter the meaning to the language employed by the legislation especially in fiscal statutes and penal statutes. [paras 19, 20] Interpretation of taxing statute - Tax liability - Regard must be had to the clear meaning of words and matter should be governed wholly by the language of the notification, equity or intendment having no place in interpretation of a tax statute - If words are ambiguous in a taxing statute (not exemption clause) and open to two interpretations, benefit of interpretation is given to the subject. [paras 25, 26, 28, 43]" 30. From the above decision of the Hon'ble Supreme Court, it is observed that a statute must be construed according to the intention of the Legislature. In the present case, there is no doubt that the Legislature wants to extend the benefit of Exemption to Non-Conventional Power Generating Systems. It is a policy decision of the Government to promote Renewable sources of energy. In many cases the entire system cannot be manufactured within the factory. The fully finished syste....
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....vice, would be eligible under Sr. No. 5 if not under 20 as part of Sr. No. 1 to 19. Coverage is also to be available under Sr. No. 13 of list 5. 2.4 The reliance placed on the decision of Damodar I. Malpani - 2002 (146) E.L.T. 483 (S.C.) & submission of invoices of other manufacturer having been exempted, is well founded. That would induce us to uphold the exempted status to be arrived in this case. 2.5 Classification declarations were filed by the appellant the goods M.S. Forged Flanges (Machined) with the exemption claim under Sr. No. 251 last 5 & Remark column having an Entry 'Wind Mills' spares & parts (for wind operated electricity generators). We find when "the Board has cast an obligation on the department vide Circular No. 124/35/95-CX. dtd. 10-5-95 to scrutinize the declaration, therefore the finding on suppression as arrived by the Ld. Adjudicator is this order, para 10, of deliberate omission of Sr. No. to involve the Proviso clause & lift the bar of limitation cannot be upheld. As the order does not indicate any other objection of the verification if any, done by the officers. Since the appellants belief of the product being covered on different Sr. No. was well f....