2007 (10) TMI 165 - AT - Central Excise

Solar Inverter Charger for solar lantern Ex. Not. 5/99-C.E - Dy. General Manager certified that the inverter merger constitutes solar power generating system as it performs the function of generating the required high frequency AC power from in-light with, the help of SPV module and supplying it to the compact fluorescent lamp of a solar lantern - In view of this expert opinion, we hold that impugned item can be considered as solar power generating system for exemption under Not. 5/99

Summary

Issues:
- Interpretation of exemption Notification 5/99-C.E., dated 28-2-99 regarding the classification of 'Solar Inverter Charger for solar lantern' under the C.E. Tariff Act.
- Whether the inverter charger qualifies for the benefit of the said notification.
- Imposition of Central Excise duty and penalty under Section 11A of the Central Excise Act and Rule 173Q of the C.E. Rules, 1944.

Analysis:
1. The appeal was filed against the Order-in-Appeal (OIA) No. 193/04 (H-IV) dated 30-11-04 passed by the Commissioner of Customs and Central Excise (Appeals), Hyderabad. The main contention was the classification of the 'Solar Inverter Charger for solar lantern' under Heading No. 80.03 of the C.E. Tariff Act as a component of a solar power generating system or solar lantern under exemption Notification 5/99-C.E., dated 28-2-99. The lower authority held that since the exemption notification exempts the total system and not parts of the system, the inverter charger for solar lantern is not entitled to the benefit of the said notification. Central Excise duty of Rs. 8,07,840/- was demanded for the period from 1-10-99 to 28-2-2001, and a penalty of Rs. 1,50,000/- was imposed under Rule 173Q of the C.E. Rules, 1944. The Commissioner (Appeals) upheld the lower authority's order.

2. During the hearing, the appellants' advocates contended that the inverter charger card is technically known as a solar power generating system and cited expert opinions certifying the same. The appellants argued that the inverter charger card is one of the constituents in the solar lantern assembly, which includes SPV Module, Maintenance free lead acid battery, and Compact fluorescent lamp. They also referenced case laws to support their argument that expert opinions should not be ignored without adequate grounds.

3. The Tribunal carefully considered the issue and found that the exemption notification exempts items like Solar voltaic module, Solar power generating system, and Solar lantern from Central Excise duty. The appellants claimed exemption for the inverter charger card as a solar power generating system since it helped convert solar energy to electricity for the SPV lantern. Expert opinions confirmed that the inverter charger constituted a solar power generating system by generating high frequency AC power from solar energy and supplying it to the compact fluorescent lamp of a solar lantern. Based on this expert opinion, the Tribunal held that the inverter charger qualifies as a solar power generating system and is entitled to the benefit of the exemption Notification. Consequently, the appeal was allowed with consequential relief.