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2014 (10) TMI 808 - AT - Central ExciseDenial of the benefit of Notification No. 06/2006 dt. 1.3.2006 amended by Notification No. 12/2012 dt. 17.3.2012 - whether the LSP and anchor rings, and tower doors can be considered to be covered under wind operated electricity generator, its components and parts which are exempted under Notification No. 6/2006 - Held that - in case the intention of Govt. was to exempt towers and foundation and its parts, then the notification would have specifically exempted non-conventional energy systems/devices as a whole. Rather, the notification exempts only those non-conventional energy devices/systems which are specified in List-5. And list-5 mentions only wind operated electricity generator, its components and parts. A notification has to be construed by the language its uses. And the language of the present notification is clear. It does not require an extrapolated interpretation. Assessee not been able to satisfy us that the terms wind mill (which includes tower and foundation) and wind operator electricity generator are synonymous or used interchangeably. The guidelines and the forms filed as per requirement of Ministry of New and Renewable Energy nowhere equate the two terms; in fact the Application form at Serial No. 1 (f) of the Ministry s format referred to by Ld. Counsel only refers to Forged Steel Rings for manufacture of special bearings for use in wind operated electricity generators . It does not refer to tower doors or foundation rings which are completely different items. It is our considered view that the doors, anchor rings and LSP do not fall under the phrase wind operated electricity generator . The appellants have relied on the judgement of Pushpam Forging 2005 (7) TMI 242 - CESTAT, MUMBAI which allowed exemption to flanges used in towers and against which order the civil appeal filed by the Department was dismissed by Hon ble Supreme Court on 20.1.2006. But this decision was not on merits. On the other hand, we find that in the case of Uniflex Cables Ltd. vs. Commissioner 2011 (8) TMI 63 - SUPREME COURT OF INDIA which is a later decision pronounced in 2011, the Supreme Court referring to the case of Nicco Corporation 2006 (3) TMI 48 - SUPREME COURT OF INDIA held that the electric cables cannot be considered as parts of wind mills or any specifically designed devices. Though we could have decided this case finally on the basis of our findings recorded above, as a matter of judicial discipline the matter may be placed before the Hon ble President for constitution of a Larger Bench because our view is contrary to the view taken by a Co-ordinate Bench in the matter of the same assessee for a different period. - Matter referred to larger bench.
Issues Involved:
1. Denial of benefit of Notification No. 6/2006 amended by Notification No. 12/2012. 2. Classification of goods as components of Wind Operated Electricity Generators (WOEG). 3. Application of extended period of limitation. 4. Imposition of penalties under relevant sections of Central Excise Act, 1944. Issue-wise Detailed Analysis: 1. Denial of Benefit of Notification No. 6/2006 Amended by Notification No. 12/2012: The core issue in all appeals was the denial of the exemption benefit under Notification No. 6/2006 and its amendment Notification No. 12/2012. The appellants argued that their products, namely Anchor Rings, Load Spreading Plates (LSP), and wind mill doors, should be considered as parts of WOEG and thus eligible for exemption. The tribunal analyzed various notifications, including No. 205/1988, 5/2005, 6/2006, and 12/2012, which exempted specific goods related to non-conventional energy devices. The tribunal concluded that the exemption was intended only for components directly related to the electricity generation process, such as rotors and wind turbine controllers. It was held that the tower and foundation parts, such as anchor rings and LSP, are not directly involved in generating electricity and thus do not qualify for the exemption. 2. Classification of Goods as Components of WOEG: The appellants contended that the components like anchor rings, LSP, and wind mill doors are integral parts of WOEG. The tribunal, however, differentiated between components directly involved in generating electricity and those providing structural support. It was held that the term 'generator' refers specifically to the part of the nacelle that converts wind energy into electrical energy. The tribunal concluded that the tower and foundation parts, including anchor rings and LSP, are not components of WOEG but rather structural elements. Similarly, wind mill doors, which do not participate in electricity generation, were not considered parts of WOEG. 3. Application of Extended Period of Limitation: The tribunal examined whether the extended period of limitation under Section 11A of the Central Excise Act, 1944, was applicable. The adjudicating authority had held that the appellants did not disclose the specific items for which they claimed exemption in their ER-1 returns, constituting suppression of facts. The tribunal agreed with this view, noting that the returns did not specifically mention anchor rings and LSP, thus justifying the invocation of the extended period. However, for the period from April 2012 onwards, the demand was within the normal time limit. 4. Imposition of Penalties: The tribunal considered the imposition of penalties under Section 11AC of the Central Excise Act, 1944. It was noted that Gemini had been declaring the goods in their ER-1 returns, and there were contrary judgments on what constitutes parts of WOEG. Therefore, the tribunal decided to set aside the penalties, emphasizing that the conduct of the appellants did not warrant penal action. Separate Judgments: In the case of M/s. Rakhoh Enterprises, the duty demand along with interest was upheld, but the penalty was set aside. For Gemini Instratech Pvt. Ltd., the tribunal, acknowledging a contrary decision by a Co-ordinate Bench, referred the matter to the Hon'ble President for constitution of a Larger Bench to decide on the eligibility of wind mill doors for exemption under Notification No. 6/2006. Conclusion: The tribunal concluded that the benefit of the exemption notification should be denied, duty demands with interest should be upheld, and penalties should be set aside. The matter regarding wind mill doors was referred to a Larger Bench for a final decision.
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