2015 (12) TMI 532 - AT - Customs

Denial of exemption claim - imported parts for manufacture of hydraulic systems which are used in the windmills - Notification No. 12/12-CE dated 17/03/12 - Held that - It is noticed that respondent being a manufacturer of hydraulic systems used in windmill, parts of the hydraulic systems used in wind mill was to generate non-conventional energy devices or systems. The goods characterized as non-conventional energy devices or systems specified under list 8 appended to the notification is exempt from ACD on import. Therefore moot question that comes up is whether the parts used in the hydraulic systems meant for manufacture of non-conventional energy device or system shall enjoy or eligible to exemption of ACD. When the entry under sl.no. 13 under list 8 of the notification is read minutely that throws light that non-conventional energy devices itself is exempt from ACD. So also systems specified under list 8 appended to that notification is exempt from levy of ACD. What is called systems is elaborated in sl.no.13 under list 8 to the notification. The systems are wind operated electricity generator with its components and parts thereof including rotor and wind turbine controller. This clearly throws light that not only a complete system is exempt but also the components and parts thereof are equally entitled to exempt from ACD. - Decided against Revenue.

Summary

Issues:
Interpretation of Notification No. 12/12-CE dated 17/03/12 regarding Additional Customs Duty (ACD) exemption for imported parts used in hydraulic systems for windmills.

Analysis:
The Revenue appealed against the Ld. Commissioner (Appeals) order granting relief to the appellants from ACD on imported parts used in hydraulic systems for windmills. The Revenue argued that imported parts are not exempt from ACD, unlike parts manufactured in the factory. The respondent, a manufacturer of hydraulic systems for windmills, contended that the imported parts were used only in systems meant for windmills and fell under sl.no. 13 of the notification. The Tribunal noted that there was no evidence to suggest the imported goods were used elsewhere and that the respondent's case aligned with the exemption criteria under sl.no. 13 for wind-operated electricity generators and their components.

The Tribunal observed that the respondent, as a manufacturer of hydraulic systems for windmills, was involved in generating non-conventional energy. The notification exempted non-conventional energy devices and systems from ACD on import. The Tribunal clarified that parts used in systems meant for non-conventional energy devices were eligible for ACD exemption. Specifically, sl.no. 13 under list 8 of the notification detailed wind-operated electricity generators and their components as exempt from ACD. Therefore, both complete systems and their parts were entitled to ACD exemption under the notification.

Based on the analysis, the Tribunal concluded that the respondent fell under the basic items of sl. No. 13 under list 8 of the notification, qualifying for ACD exemption. Consequently, the Tribunal dismissed the Revenue's appeals and modified the Ld. Commissioner (Appeals) order by removing the need to consider relief under sl.no. 21, as the primary condition under sl.no. 13 was met by the respondent. The Tribunal upheld the ACD exemption for the imported parts used in hydraulic systems for windmills, in line with the notification's provisions.

In conclusion, the Tribunal dismissed both Revenue appeals, affirming the ACD exemption for imported parts used in hydraulic systems for windmills under the relevant notification.