2016 (11) TMI 1211 - AT - Central Excise

Entitlement to the exemption of excise duty in terms of N/N. 6/2002-CE dt. 1.3.2002 in terms of List 9 appended to Sl.No.237 of the said Notification - steam boilers and thermic fluid heaters manufactured by it are fit to produce energy using input from the non-conventional sources i.e. from agro waste - Held that - As per notification, the goods manufactured by the appellant should be capable of using agricultural waste to produce non-conventional energy. It may be stated that use of agricultural waste by the goods manufactured by the appellant was not ruled out by Revenue making any allegation in the SCN. Record shows that a communication dt. 18.5.2006 of the Asst. Commissioner of Central Excise, Chennai-V Division sent to the Joint Commissioner of Central Excise, R&T Section, Chennai-II made clear that the devices manufactured by the appellant are non-conventional energy producing devices. So also enquiry by the reporting officer revealed that certain customers were using appellant s goods for use of the agricultural waste to produce non-conventional energy. We are conscious that the grant of notification should not be loosely interpreted and public grant should not be abused. But the spirit of the notification in question appears to be beneficial in nature. Revenue failed to demonstrate that the device is not capable of using agricultural waste. That suffices to hold that the goods of the appellant are eligible to the notification benefit - Appeal allowed - decided in favor of assessee.

Summary

Issues:
1. Interpretation of Notification No.6/2002-CE regarding excise duty exemption for non-conventional energy devices.
2. Determination of whether steam boilers and thermic fluid heaters manufactured by the appellant are eligible for the exemption based on their capability to use agricultural waste for energy production.

Analysis:
1. The appellant contended that their steam boilers and thermic fluid heaters are fit to produce energy using agro waste, seeking exemption under Notification No.6/2002-CE. Revenue filed an appeal against the benefit granted by the Commissioner (Appeals) to the appellant, disputing the eligibility for the exemption.
2. The appellant argued that the goods manufactured by them can utilize non-conventional resources, including agro waste, for energy production. The adjudicating authority acknowledged this capability and observed the use of agro waste in the devices. The appellant highlighted that the show cause notice did not allege any incapability of their devices to use agro waste for energy production.
3. The Tribunal examined the notification's objective, emphasizing that non-conventional energy devices falling under List-9 are entitled to duty exemption. The notification specifies devices capable of using agro waste for energy production. The Tribunal noted the absence of evidence from Revenue to refute the appellant's claim of using agro waste.
4. The Tribunal considered various documents, including a communication confirming the appellant's devices as non-conventional energy producers. Additionally, RTI replies from different Commissionerates supported the appellant's position, indicating an inconsistent approach by authorities. The Tribunal emphasized the notification's beneficial nature and the failure of Revenue to prove the appellant's devices incapable of using agro waste.
5. In the appeal by Revenue (E/263/2012), the Tribunal upheld the decision in favor of the appellant, consistent with the ruling in appeal E/95/2008. The Tribunal dismissed Revenue's appeal, affirming the eligibility of the appellant for the notification benefit. The appeals of both parties were disposed of accordingly.