2013 (11) TMI 1044 - AT - Customs

Import of Tubular Towers of different seizes - Benefit of duty exemption under Notification No.6/06-CE dt. 1.3.2006 (Sl.No.84) - Classification of goods under Customs Tariff Heading 85030010 or 73082019 - Held that - 7308 will cover those towers which are not parts of any machine as per C.B.E. & C. Telex/Circular No. 924/2/97-Cus. (TU), dated 9-8-1997. This Circular has clearly opined in the conference of the Commissioners of the Customs on Tariff and Allied matters that WOEG tower parts constitute essential components of WOEG and that in the absence of tower parts imported for the manufacture of WOEG, WOEG cannot be said to be presented in an unassembled/disassembled condition. It was also clarified that these parts will be classifiable as components and will be liable to duty as applicable to the components - Prima facie case in favour of assessee - Following decision of Vestas Wind Technology India Pvt. Ltd. 2013 (11) TMI 1015 - CESTAT AHMEDABAD - Stay granted.

Summary

Issues: Classification of imported towers for wind power generation under Customs Tariff Heading 85030010 or 73082019 and eligibility for duty exemption under Notification No.6/06-CE dt. 1.3.2006.

Analysis:
1. Classification Issue: The applicants imported Tubular Towers for manufacturing Wind Operated Electricity Generator (WOEG) and claimed duty exemption under Notification No.6/06-CE. The adjudicating authority classified the goods under 73082019 instead of 85030010, denying the exemption. The advocates for the applicants argued that WOEG falls under Customs Heading 8502, and tubular towers are integral parts covered under heading 8503. They cited relevant case law and CBEC telex to support their claim.

2. Revenue's Contention: The Revenue argued that towers fall under 7308, a specific heading, and should be classified accordingly. They emphasized the general rules of interpretation favoring specific headings. They relied on tribunal decisions and the Supreme Court ruling regarding the classification of parts for duty exemption eligibility. They contended that towers are not integral parts of WOEG and, therefore, not eligible for exemption.

3. Tribunal Decision: After considering both sides, the tribunal analyzed whether the towers imported by the applicants should be classified under 8503 as parts of WOEG or under 7308. The tribunal referred to relevant section notes and chapter notes for classification. Citing previous tribunal decisions and CBEC circulars, the tribunal found in favor of the applicants, stating that towers are essential components of WOEG. The tribunal waived the pre-deposit of duties and penalties, staying their recovery during the appeal process based on the legal position established.

4. Conclusion: The tribunal found the present case aligned with previous decisions and CBEC circulars, granting a waiver of pre-deposit and staying the recovery of duties and penalties. The decision relied upon by the Revenue was deemed applicable to different facts, to be examined during the appeal hearing. The tribunal's ruling was based on the classification rules and the essential nature of towers for WOEG, ensuring a fair outcome for the applicants during the appeal process.