TaxTMI 
TaxTMI 
2025 (1) TMI 581
X X X X Extracts X X X X
X X X X Extracts X X X X
....) against the Advance Ruling No. GUJ/GAAR/R/2022/16 dated 12.4.2022. 3. Briefly, the facts are enumerated below for ease of reference: • The appellant is engaged in supply of goods required for setting up of power projects enabling generation of power through renewable sources of energy on its own & through its subsidiary companies; • Appellant manufactures Wind Operated Electricity Generators [WOEG] falling under chapter 85023100; parts like Nacelle, Blades & Towers falling under chapter heading 8503; transformers falling under chapter heading 8504. • Transformers for WOEG is installed on the ground adjoining WOEG & is a device to link the electricity generated by the WOEG to the distribution grid and make it usable for distribution/consumption; • The appellant feels that the transformers are specially/specifically designed to be used along with WOEGs & is therefore to be treated as part of WOEG. 4. In view of the foregoing facts, the appellant had sought Advance Ruling on the following questions, viz: The specially designed Transformers for Wind Operated Electricity Generators which are meant to perform dual funct....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aced in nacelle nor tower but are placed on the ground beside the WOEG; • that WOEG per se is capable of generating electricity with wind; • that the appellant is supplying transformers directly to the recipients on principal to principal basis and not on bill to ship basis. 6. The GAAR, vide the impugned ruling dated 18.10.2021, held as follows RULING 1. Transformers are not part of WOEG and are leviable to CGST @ 9% vide Sr. No. 375 of Schedule-III of Notification No. 1/2017-CT (Rate) dated 28-6-2017. 7. Aggrieved by the aforesaid advance ruling, the appellant is before us, raising the following contentions, viz • impugned order erred in holding that in the case of Enercon India, the matter was remanded back; in-fact in the said case the Hon'ble SC allowed the appeal while holding that transformers are vital parts of a windmill; • the impugned order failed to look at the transformer from the angle of general principles of interpretation; that they should also be understood by their popular meaning/common parlance principle; • that WOEG and Wind Turbine system are used interchangeably; that there is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ry, parts/components referred in Para 3 above may be treated as parts and components of wind operated electricity generators eligible for exemption under serial no. 332 of Notification No. 12/2012-Central Excise, dated 17.03.2012. 5. For any clarification regarding parts and component of WOEG, not covered in para 3 above, opinion of Ministry of New and Renewable Energy would be sought by the Board, if required. Issues relating to exemption of parts and components of WOEG not covered in para 3 above may be referred to Board through the Chief Commissioner concerned, if required. 6. Difficulty experienced, if any, in implementing the circular should be brought to the notice of the Board. Hindi version would follow. Subject: Clarification regarding tower and blades constitute an essential component of Wind Orated Electricity Generators (WOEG)-reg. A large number of references have been received from the trade as well as the field formations to clarify whether exemption Notification No. 12/2012-Central Excise, dated 17.03.2012 covers part/components of Wind Operated Electricity Generators (WOEG). References have been received in relation to tower, tow....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd mill may not be able to function without these cables, hence the benefit of exemption is not available to Cables and wires. Further, in case of M/s. Enercon (India) Ltd., Authority of Advance Ruling had ruled that entry "Wind Operated Electricity Generator" covers the generator per-se and it is not intended to include equipments which are deployed with the generator for production of electricity. The sponsoring zone was of the view that the towers and others parts, which are not directly related to generation of electricity would not be eligible for exemption. In view of the sponsoring zone, it would be desirable that the list of equipments / parts /components eligible for exemption may be spelt out in the Exemption Notification. Discussion & Decision It was noted in the conference that a clarification has already been issued on 20.10.2015 vide Circular No. 1008/18/2015-CX by the Board wherein details of parts on which exemption is available is specified. Ministry of New and Renewable Energy had clarified to CBEC that tower, nacelle, rotor, turbine controller are parts of wind turbine and accordingly the circular has been issued clarifying that exemption is ava....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt. of the gross consideration charged shall be deemed as value of the said taxable service."; 12. The first averment which needs to be addressed is whether specially designed transformers for WOEG, which perform the dual function of step down and step up, supplied by the appellant along with WOEG, should be treated as a part WOEG or otherwise. GAAR has relied on circular No. 1008/15/2015-CX dated 20.10.2015, issued by CBIC consequent to seeking clarification from Ministry of New and Renewable Energy, on the items which would constitute parts of WOEG. The GAAR has also relied on the Minutes of the Tariff Conference, held consequent to the issue of the aforementioned clarification, wherein the same was reiterated. As is evident, transformers have not been included as parts of WOEG by the Ministry of New and Renewable Energy and hence, the contention of the appellant that they are parts of WOEG is not a legally tenable argument. 13. The next averment is that GAAR failed to examine the transformer from the angle of general principles of interpretation & that they should be understood by their popular meaning/common parlance principle. We find that the appellant has not produced ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t has come to the conclusion that insofar as foundation work etc. is concerned that would not be exempted as it does not fall within the meaning of wind mill. It is the validity of this part of the order which calls for our attention. After hearing the learned counsel for the parties, we are of the opinion that a fundamental mistake which is committed by the authorities below is that foundation work or installation work, which is even considered as part of works contract by the Assessing Officer himself, cannot be treated as "goods". Even if we proceed on the basis that such work does not fall within the expression "Wind Mill", still it could not be treated as goods which could be exigible to sales tax under the Act. As pointed out above, the Assessing Officer himself classified such goods involved in execution of works contract. Once this was the opinion of the Assessing Officer and the part of work viz. foundation or erection work related to works contract, on this ground itself no sales tax could have been charged thereon. We have also pointed out above that even the First Appellate Authority proceeded on the basis that the work like foundation work, electrical work, co....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the whole law, but are governed and qualified by the particular facts of the case in which such expressions are to be found. The other is that a case is only an authority for what it actually decides. I entirely deny that it can be quoted for a proposition that may seem to follow logically from it. Such a mode of reasoning assumes that the law is necessarily a logical Code, whereas every lawyer must acknowledge that the law is not always logical at all." We entirely agree with the above observations. 16. We concur with the findings of the GAAR in para 38.3 of the impugned ruling, so far as it states that WOEG as used in the notification no. 1/2017-CT (Rate), ibid, would not include the specially designed transformer. Even otherwise, it's a trite law that exemption notifications are to be interpreted strictly. We substantiate this finding, by relying on the judgement of the Constitution Bench of the Hon'ble Supreme Court in the case of Dilip Kumar and Company [2018 (361) ELT 577 (SC)] wherein the Court held as follows viz relevant extracts| 52. To sum up, we answer the reference holding as under- (1) Exemption notification should be interpreted strictl....