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2015 (1) TMI 763 - AT - Central ExciseExemption towards wind operator electricity generators (WOEG) and their components and parts - 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 - 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. The issue to be considered by Larger Bench is framed as follows Whether a manufacturer is entitled to claim the benefit and exemption from Central Excise duty on wind mill doors under Notification No. 6/2006 dt. 1.3.2006 which grants exemption to wind operated electricity generator, its components and parts thereof including rotor wind turbine controller . Matter referred to larger bench.
Issues Involved:
1. Denial of exemption under Notification No. 06/2006 and 12/2012 for Anchor Rings and Load Spreading Plates (LSP) manufactured by Rakhoh Enterprises. 2. Denial of exemption under Notification No. 06/2006 for wind mill doors manufactured by Gemini Instratech Pvt. Ltd. 3. Applicability of extended period for demand and imposition of penalties under Section 11AC of the Central Excise Act, 1944. Issue-wise Detailed Analysis: 1. Denial of Exemption for Anchor Rings and Load Spreading Plates (LSP) by Rakhoh Enterprises: The primary contention was whether the Anchor Rings and LSP, used in the foundation of wind mill towers, qualify for exemption under Notification No. 06/2006 and 12/2012. The Tribunal examined the notifications, which exempt "wind operated electricity generator, its components and parts thereof including rotor and wind turbine controller." It was concluded that the exemption was limited to the WOEG and its components directly related to electricity generation. The Tribunal held that the Anchor Rings and LSP, being parts of the foundation, do not qualify as components of WOEG. The foundation and its parts are not involved in the actual process of generating electricity and thus cannot be considered as part of the WOEG. 2. Denial of Exemption for Wind Mill Doors by Gemini Instratech Pvt. Ltd.: The issue was whether wind mill doors, fixed at the base of the tower, qualify for exemption under Notification No. 06/2006. The Tribunal referred to the Supreme Court decision in United Cable Industries and Nicco Corporation Ltd., which held that parts not directly involved in the generation of electricity do not qualify for exemption. The Tribunal agreed with the Commissioner (Appeals) that wind mill doors do not take part in electricity generation and are used for security and convenience. Therefore, they cannot be considered as components of WOEG. The Tribunal also noted that the wind mill doors were classified under CSTH 73083000 as part of a structure, further supporting the denial of exemption. 3. Applicability of Extended Period for Demand and Imposition of Penalties: The Tribunal addressed whether the extended period for demand and penalties under Section 11AC of the Central Excise Act, 1944, was applicable. For Rakhoh Enterprises, the Tribunal noted that the E.R. 1 returns did not specifically mention the items for which exemption was claimed, indicating suppression of facts. Therefore, the extended period was invoked, and the demand was upheld. However, the penalty was set aside as the Tribunal did not find sufficient grounds for imposing it. In the case of Gemini Instratech Pvt. Ltd., the demand was within the normal time period, and no penalty was imposed. Conclusion: The Tribunal upheld the duty demands along with interest for both Rakhoh Enterprises and Gemini Instratech Pvt. Ltd. but set aside the penalties. The matter of exemption for wind mill doors was referred to a Larger Bench due to conflicting views in previous decisions. The Tribunal emphasized that the language of the notification must be strictly construed, and only components directly involved in electricity generation qualify for exemption.
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