TaxTMI 
TaxTMI 
2026 (9) TMI 1591
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....der Invoice Nos. 178 to 184 dated 13.05.2013 to M/s GP Green Energy Systems, Kolkata, without payment of duty by claiming exemption under Notification No. 12/2012-CE dated 17.03.2012. The Department viewed the goods as mere parts and accessories not covered by Sl. No. 332 of the notification and, accordingly, issued Show Cause Notice dated 21.11.2016 proposing recovery of duty of Rs.7,08,540/- along with interest and penalty. The demand was confirmed by the adjudicating authority and subsequently upheld by the Commissioner (Appeals), giving rise to the present appeal. 3.1 The Ld. Advocate Shri M.S. Krishnakumar appearing for the appellant submitted that the Department has proceeded on an entirely erroneous understanding of the nature of the goods supplied. It was contended that the goods were not cleared as spare parts or accessories but constituted a complete Dual Fuel Burner System specifically designed and manufactured for integration with a biomass gasification plant established by M/s GP Green Energy Systems for Britannia Industries Ltd., Madurai. It was argued that the purchase order itself described the goods as a "Dual Fuel Burner System" and that the system comprised nu....
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....be upheld and the appeal rejected. 5. Upon careful consideration of the records and rival submissions, the following questions arise for determination: - i. Whether the impugned goods cleared under Invoice Nos. 178 to 184 dated 13.05.2013 are eligible for exemption under Sl. No. 332 of Notification No. 12/2012-CE dated 17.03.2012 as non-conventional energy devices/systems specified in List 8? ii. Whether the demand of duty, interest and penalty is sustainable in law, including on the ground of limitation? Issue No. (i): Eligibility of the Impugned Goods to Exemption under Notification No. 12/2012-CE 6. The dispute in the present appeal centres around whether the goods cleared by the appellant, namely the Dual Fuel Burner System and its associated components supplied for use in a biomass gasification project, are eligible for exemption under Sl. No. 332 of Notification No. 12/2012-CE dated 17.03.2012 as non-conventional energy devices/systems specified in List 8, or whether they are merely parts and accessories not entitled to the benefit of the said notification. 7. The Department proceeds on the assumption that the impugned goods are merely parts of a....
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....ccording to the appellant, the common principle emerging from the aforesaid decisions is that the functional role played by the goods within the non-conventional energy system, and not their individual identity when viewed in isolation, constitutes the relevant test for determining eligibility to exemption. It was therefore argued that the Dual Fuel Burner System supplied by the appellant, being an integral component of a biomass gasification project intended for generation of useful thermal energy, squarely satisfies the said test and is entitled to the benefit of Notification No. 12/2012-CE dated 17.03.2012. 10. We are unable to agree with the reasoning adopted by the lower authorities that the impugned goods should be examined item by item and classified merely as valves, blowers, burners or regulators. Such an approach ignores commercial reality and the manner in which the goods were conceived, manufactured, supplied and installed. The law recognizes that a complete system may comprise several constituent components. Where such components are supplied together as an integrated system designed for a specific non-conventional energy application, the exemption cannot be denied ....
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....gement for the biscuit manufacturing facility. The drawing corroborates the Purchase Order, invoices and the clarification furnished by M/s GP Green Energy Systems and demonstrates that the various items supplied by the appellant were engineered and installed as part of a unified operating arrangement within the biomass gasification project. 14. The Department's attempt to dissect the system into individual components and thereafter deny exemption proceeds on an artificial and myopic appreciation of the transaction and ignores the commercial and functional identity of the goods actually supplied. In our considered view, the functional role performed by the impugned system within the biomass gasification project is the determinative factor and not the fact that the system comprises multiple components. The principles emerging from the decisions relied upon by the appellant also support the view that functional integration with a non-conventional energy system, rather than isolated examination of individual components, constitutes the relevant test for determining eligibility to exemption. Viewed thus, the impugned goods satisfy the description of a non-conventional energy dev....