By TIOL News Service

MUMBAI, MAY 16, 2013: THE appellants are engaged in the manufacture of current transformers, voltage transformers, windmill door, electrical boxes, etc. During the period June 2001 to May 2005 they claimed the benefit of notification No. 3/2001-CE & 6/2002-CE in respect of windmill doors.

Notification No.3/2001-CE dated 01/03/2001, Sl. No.254 reads as -‘Non-conventional energy devices/systems specified in the List 5” and Sl. No. 13 of the list 5 reads as - “Wind operated electricity generator, its component and part thereof”.

So also, Notification No.6/2002-CE dated 01/03/2002, Sl. No. 237 covers all the goods used in non-conventional energy devices/systems specified in list 9 and the said product is placed at item No. 13 in the list No.9 which reads as - “ Wind operated electricity generator, its components and parts thereof including rotor and wind turbine controller”.

The CCE, Nashik denied the benefit of the notification and confirmed the demands of Rs. 1,32,75,126/- and Rs.55,85,513/- respectively along with imposition of interest and a penalty of Rs. 2 lakhs.

Before the CESTAT, the appellant submits that the doors are used with the tower on which the wind operated electricity generators are installed; that the Revenue is not denying the benefit of notification in respect of tower, hence the doors which are a part of tower cannot be denied the benefit of above mentioned notifications. The applicant also relied upon the order passed by the CCE, Raipur & that passed by the CCE(A), Raipur whereby the benefit of Notification no. 6/2002-CE & 6/2000-CE was allowed in respect of the tower of the wind operated electricity generators. Reliance is placed on the decisions in Hyundai Unitech Electrical Transmission Ltd., vs. CCE, = (2005-TIOL-1060-CESTAT-MUM) Pushpam Forging Vs. CCE, = (2005-TIOL-667-CESTAT-MUM) in support of their claim.

The Revenue representative relied on the decision in the case of Nicco Corporation Ltd., vs. CCE, Calcutta = (2006-TIOL-163-SC-CX) wherein the apex court had denied the benefit of Notification No.205/88-CE dated 25/05/1998 in respect of wires and cables. Inasmuch as it was held that the wind mill is complete in itself without electric cables, although wind mill may not be able to function without these cables and as such, the benefit of exemption notification No.205/88-CE would not be available in respect of wires and cables as part of wind mill.

The Bench observed -

“12. The Revenue relied upon the decision of the Hon'ble Supreme Court in Nicco Corporation Ltd. case (cited supra) whereby the Hon'ble Supreme Court denied the benefit of Notification No. 205/88-CE dated 25/05/1988 in respect of wires and cables. We find that the Notification No.205/88-CE at Sl. No.12 provides exemption from payment of Central Excise duty in respect of wind mill and specifically devices which run on the wind mill. In these situation, the Hon'ble Supreme Court held that wires and cables are not entitled for the benefit of notification. The wordings of the notifications which are under consideration before us are different. The notification No.3/2001-CE & No.6/2002-CE provides exemption from payment of Central Excise duty in respect of wind operated electricity generators and its components and parts thereof. As the benefit of notification is available to the components and parts thereof, which not in the case before the Hon'ble Supreme Court in the case of Nicco Corporation Ltd. (supra). Therefore, ratio of the above decision is not applicable in the facts of the present case.

13. The Revenue is not denied the benefit of notification in respect of the tower of the wind operated electricity generators as held by the Commissioner of Central Excise, Raipur, vide order dated 28/02/2005 and the Commissioner (Appeals) vide order dated 10/02/2003 allowed the benefit of notification in question in respect of towers of wind operated electricity generators. The Revenue has not produced any evidence to show these orders are challenged by the Revenue. As the benefit of notification No. 6/2002-CE is allowed to the tower of wind operated electricity generators. Therefore, the door which is part of tower is also entitled for the benefit of notification which provides exemption from payment of Excise duty to wind operated electricity generators and its components and parts thereof.”

In fine, the order of the CCE, Nashik was set aside and the appeal was allowed.

(See 2013-TIOL-738-CESTAT-MUM)