TaxTMI 
TaxTMI 
2026 (5) TMI 1225
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....ioner are subjected to GST at the rate of 5% c) To issue order(s) or directions in the nature of Mandamus holding that the goods supplied by the Petitioner does not constitute mixed supply of goods and services attracting GST at the rate of 18%; d) To issue order(s) or directions in the nature of Mandamus holding that ITC cannot be denied to the Petitioner for the fault of the supplier; e) To issue order(s), directions, writ(s) or any other relief as this Hon'ble Court deems it fit and proper in the facts and circumstances of the case in the interest of justice." In W.P. No. 11788/2025, petitioner seeks for the following reliefs:- "a) To issue order(s), directions, writ(s), in the nature of Certiorari quashing the impugned Order-in-Appeal No. GST/AP. No. 184/2024-25 dated: 28.02.2025 enclosed as Annexure-A, passed by Respondent No. 1; b) To issue order(s) or directions in the nature of Mandamus holding that the solar inverters and other goods under consideration supplied by the petitioner are subjected to GST at the rate of 5%; c) To issue order(s) or directions in the nature of Mandamus holding that the petitioner is eligibl....
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....ght of Notification issued under Section 168A of the CGST/KGST Act is without jurisdiction; i. To issue order(s) or directions in the nature of Mandamus to set aside the interest and penalty confirmed in the impugned order by Respondent No. 1; j. To issue order(s), directions, writ(s) or any other relief as this Hon'ble Court deems it fit and proper in the facts and circumstance of the case in the interest of justice." 2. The petitioners and respondents in all the three petitions are the same and since common questions of law and fact arise for consideration in all the three petitions, they are taken up together and disposed of by this common order. 3. The Petitioner is engaged in the manufacture and sale of switchgear, Industrial Electronic Controllers, Drives, electrical goods and related parts and accessories. During the relevant period, the Petitioner has undertaken the sale/ supply of the solar inverters classifiable under Chapter 85 of the Harmonized System Nomenclature (HSN). The Petitioner undertakes supply of solar inverters which are predominantly used for solar power projects, industries and/or large residential complexes where solar power grid sy....
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....17-March 2018 April 2018 - March 2019 April 2019-March 2020 2. Impugned Order-in-appeal No. and date GST/AP. No. 11/2024-25 dated 29.01.2025 Order-in-appeal No. 184/2024-25 dated 28.0.2025 GST/AP. No. 640/2024-25 dated 27.03.2025 3. Tax Demanded on supply of Solar Inverters and other accessories Rs. 36,87,16,706/- Rs. 58,39,30,336/- Rs. 24,67,36, 294/- 4. Total Tax Demanded Rs. 37,10,20,536/- Rs. 61,37,04,338/- Rs. 25,77,96,388/- 6. The respondents have filed their statement of objections and contested the petition, in pursuance of which, the petitioner has filed a rejoinder reiterating its contentions and disputing and denying the various allegations and claim made by the respondents. 7. Heard learned Senior counsel for the petitioner and learned HCGP for the respondents and perused the material on record. 8. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned Senior counsel for the petitioner submits that the subject solar invertors supplied by the petitioner were covered by Entry No.234 of Schedule-I of the Notification dated 28.06.2017 which prescrib....
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....erter supplied by the Petitioner has sole functionality of being used as part of the solar power grid system. The presence of solar panels, battery, controller is integral for the working of the inverters as it cannot be used for normal household usage like a regular electrical converter. In the present case, for the solar inverter to be working the input must be in the form of solar energy which is absorbed by the solar panels. 12. In this context, it is an undisputed fact as borne out from the material on record that the petitioner in W.P. No. 9686/2025 has supplied solar invertors to M/s. Palace Solar Energy Pvt. Ltd., for the purpose of manufacture of solar power based devices and solar power generating system as can be seen from the purchase orders, invoices etc., produced by the petitioner; similarly, in W.P. No. 11788/2025, petitioner has supplied solar invertors to M/s. Mahindra Susteen Pvt., Ltd., for the purpose of manufacture of solar power based devices and solar power generating system as can be seen from the purchase orders, invoices etc., produced by the petitioner; so also, the petitioner in W.P. No. 16708/2025, has supplied solar invertors to M/s. Oryx Solar Ene....
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....pter Heading 8504, a device which converts AC into DC is an electric inverter and therefore, the Petitioner under Chapter Heading 8504 has been supplying solar inverters to its purchasers. It is therefore clear that a perusal of the Exemption Notification, the benefit of the concessional rate of GST is available for renewable energy devices and parts for their manufacture. 16. It is also relevant to state that on a perusal of the aforesaid rate entry, it is clear that solar power generating system as a whole is covered under the said entry; the phrase 'system' indicates that it would consist of various individual machines which would function together to provide the desired output result. The word 'system' has been defined under the Fourth Edition of Black's Law Dictionary as follows- "SYSTEM- Orderly combination or arrangement, as of particulars, parts, or elements into a whole; especially such combination according to some rational principle; any methodic arrangement of parts." 17. In the case of CCE vs. Hewlett Packard India Sales Pvt. Ltd., - 2007 (215) Ε.Ε.Τ. 484 (S.C.), the Apex Court that the meaning of the word 'System' was explained with ....
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....00 rpm; therefore, much more data can be stored and accessed much more quickly than on a floppy disk. Most hard disks contain from two to eight platters. See the illustration. Also called: hard disk drive. Hard disk drive n. See hard disk Platter. One of the individual metal data storage disks within a hard disk drive. Most hard disks have from two to eight platters. See the illustration. See also hard disk Software. Computer programs; instructions that make hardware work. Two main types of software are system software (operating systems), which controls the workings of the computer, and applications, such as word processing programs, spreadsheets, and databases, which perform the tasks for which people use computers. Two additional categories, which are neither system nor application software but contain elements of both, are network software, which enables groups of computers to communicate, and language software, which provides programmers with the tools they need to write programs. In addition to these task-based categories, several types of software are described based on their method of distribution. These include packaged software (canned programs), sold primarily through re....
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....notebook computer is a laptop. It is a machine. A CD or a floppy disk is a peripheral. 10. Applying the above tests to the facts of the present case, we are of the view that preloaded operating system recorded in HDD in the laptop (which is the item of import) forms an integral part of the laptop. What was imported in the present case was a laptop as a stand alone item (unit). Present dispute relates to the transaction value of the unit. An importer who buys a laptop containing an operating system pays for the laptop as a unit. As stated above, without the operating system, like Windows, the laptop cannot work. The computer cannot open without operating system. In the present case, the respondent has not only imported laptops, it has also imported HDDs on which the operating system was recorded (packaged software) which has been classified by the Department under CTH 85.24. However, when a laptop is imported with in-built preloaded operating system recorded on HDD the said item forms an integral part of the laptop (computer system) and in which case the Department is right in treating the laptop as one single unit imported by the respondent. The Department has rightly clas....
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....r manufacture and that the benefit is not restricted only to people who are supplying the entire solar power generating system on their own accord, but also includes supply of parts, such as the present case. 21. Section 2(72) of the CGST Act, defines the terms 'manufacture' as extracted below: "(72) "manufacture" means processing of raw material or inputs in any manner that results in emergence of a new product having a distinct name, character and use and the term "manufacturer" shall be construed accordingly;" 22. A plain reading of the definition of the expression 'manufacture' means processing or raw materials or inputs in any manner, which results in emergence of a new product having a distinct name, character or use and consequently, I am of the view that the solar inverters supplied by the Petitioner herein are an integral part of the solar power-based devices and solar power generating system. As stated supra, the solar inverters, along with other parts of the device or system, as the case may be, are "assembled" together to form the said solar power-based device or solar power generating system and that manufacture in any manner, as given in the definition ....
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....eeve shirts which were sold in the domestic market, this Court went on to interpret the term 'required to manufacture' mentioned in the exemption notification and held that the phrase 'required to manufacture' as stated in the exemption notification contemplates possible or intended use and not actual use and thus, the material need not be directly used in the manufacture of resultant product and proof of actual use is not a condition attached to the exemption Notification and the intention of the Notification is to ensure that such inputs should not be sold or transferred in the market. "6. We have considered the submissions made by learned counsel for the parties and have perused the record. Before proceeding further, we deem it appropriate to refer to clause (vii) and relevant extract of clause (viii) of Notification No. 30/1997-Cus dated 01.04.1997 and clarification issued vide Circular dated 30.06.1997-Cusdated16.09.1997, which reads as under: (vii) Exempt materials shall not be disposed of or utilized in any manner except for utilization in discharge of export obligation or for replenishment of such materials and the materials so replenished shall not be sol....
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....in Part-I-C of DEEC Book. The satisfaction of Assistant Commissioner at the stage of logging is not doubt with regard to the conditions specified in Exemption Notification, but it must be exercised without asking for information which goes beyond the ingredients specified in the Exemption Notification and in the format of DEEC Book appended to the Notification. 7. Now we may advert to the first issue whether the respondent has violated the actual use condition as envisaged under Section Notification 30/1997. It is pertinent to note that none of the terms and conditions of Notification No.30/1997 envisage physical incorporation of imported material in the goods that are exported towards fulfillment of export obligations. The aforesaid Notification grants exemption from the whole of the custom duty and whole of the additional duty to the 'materials' imported against an Advance Licence subject to conditions stipulated therein. The word 'material' has been defined in Explanation II to mean raw materials, components, intermediates, consumables, computer software and parts required for manufacture of resultant product specified in Part E of the said certificate. It is also perti....
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....nce licence for duty free import after due Notification that materials can be used for production of export goods. The respondent fulfilled the export obligations in respect of exporting men's full sleeve shirts of specified value, which was examined by Joint Director of Foreign Trade and Export Obligation Discharge Certificate (EODC) was issued. Thereafter, it is not open for the officers of the customs department to contend that the imported material cannot be used for manufacture of shirts and that respondent has not discharged its export obligation by violating the conditions of the exemption Notification. In this connection, reference may be made to decision of the Supreme Court in TITAN MEDICAL SYSTEMS supra. 10. The tribunal on the basis of meticulous appreciation of evidence on record has held that the respondent has not violated the conditions of exemption Notification No.30/97-Cus and has discharged its export obligations. It has further been held that there has been no violation of actual user condition. The findings recorded by the tribunal have been recorded after appreciation of evidence on record, by which no stretch of imagination can be said to be perverse....
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....or use by it in the generation or distribution of such energy" (emphasis supplied by us). On a plain reading of the relevant clause it is clear that the expression "for use" must mean "intended for use". If the intention of the legislature was to limit the exemption only to such goods sold as were actually used by the undertaking in the generation and distribution of electrical energy, the phraseology used in the exemption clause would have been different as, for example, "goods actually used" or "goods used.". 10. Mr. Bana, in support of his submission, drew our attention to the decision of the High Court of Madhya Pradesh in Associated Cement Co. Ltd., Kymore, M.P. v. Assistant Commissioner of Sales Tax, Jabalpur Region, Jabalpur and Anr. [1971] 28 S.T.C. 629. In that case the exemption provision was in pari materia with the exemption provision before us. It was held by the Madhya Pradesh High Court that everything sold to the Electricity Board for its use did not fall within the exemption under Section 2(j)(a)(iii) of the Act. It was only when there was direct use of the goods in the generation or distribution of electrical energy that the goods sold to the Board could ....