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2024 (10) TMI 46 - AT - Central Excise100% Export Oriented Unit (EOU) - whether the exemption Notification No.06/2006-CE dated 01.03.2003 and Notification No.21/2012-Cus. dated 17.03.2012 are available on the inputs used in manufacture of Solar Module (Non-conventional Energy Device)? - eligibility for exemption from payment of SAD - exemption from payment of BCD in respect of Solar PV Glass and Edge Tape - demand for the period from 01.04.2009 to 30.04.2011 is barred by limitation - extended period of limitation. HELD THAT - In the present case, the appellant sought exemption on various parts procured locally as well as imported, used in the manufacture of Solar Module (non-conventional energy devices) at Sl. No.11 and 20 of the said List 5 against Sl. No.84 of List 5 of Notification No.6/2006-CE dated 01.03.2006. Sl. No.21 of List 5 allows exemption to parts consumed within the factory of production of such parts for the manufacture of goods specified at Sl. No.1 to 20 of the said List. Thus, it is very clear that the parts which are manufactured within the factory can be allowed when consumed in the manufacture of items mentioned at Sl. No.1 to 20. Also, the Tribunal in the case of M/s. Sova Solar Limited 2020 (7) TMI 485 - CESTAT KOLKATA allowing the exemption for the parts manufactured and used within the factory of production, denied exemption to the parts procured from outside and used in the manufacture of goods specified at Sl. No.1 to 20. This Tribunal in a similar set of facts and circumstances in Raydean Industries case 2022 (4) TMI 1155 - CESTAT NEW DELHI , the claim of the appellant that Module Mounting Structures whether could be considered as part of Solar Power Generating System . Sl. No.332 of the Notification No.12/2012-Cus. dated 17.03.2012 allowed Non-conventional Energy Device specified in List 8. The appellant claimed the parts as Solar Power Generating System where a specific mention about the parts consumed within the factory and production of such parts for manufacture of the goods specified at Sl. No.1 to 20 has been prescribed. The principle laid down by the Hon ble Supreme Court in the case of M/s. Dilip Kumar and Co. 2018 (7) TMI 1826 - SUPREME COURT , the claim of the appellant that benefit of Notification No.6/2006-CE dated 01.03.2006 and No.12/2012-CE dated 17.03.2012 to the parts procured and used in the non-conventional devices or systems specified in List 5/List 8 of the respective Notifications, as the case may be, cannot be allowed and the Commissioner has rightly denied the benefit of the said exemption Notifications - Since the appellants are not entitled to avail benefit of Notification No.6/2006-CE dated 01.03.2006 and Notification No.12/2012-CE dated 17.03.2012, that is additional duty of Customs under Section 3 of Central Excise Tariff Act, 1975 (CVD) being leviable, therefore, the additional duty leviable under subsection 5 of Section 3 of the Customs Tariff Act, 1975 (SAD) cannot be extended to the appellant. The appellant in para 15 of their written submissions made a specific claim about the benefit of exemption Notification No.25/1999-Cus. dated 28.02.1999 and Notification No.24/2005-Cus. dated 01.03.2005 on the goods used in the manufacture of solar cells / modules which are exempted from customs duty and therefore, the duty foregone at the time of import on such goods used in the manufacture of goods cleared by the appellant at Nil rate of duty would any way be Nil . Thus, though there is a claim advanced by the appellant with regard to exemption under Notifications, which the Commissioner has not examined, hence to examine the said issue, the matter needs to be remanded. Extended period of limitation - HELD THAT - The issue relates to interpretation of admissibility of Notification No.6/2006-CE dated 01.03.2006 and Notification No.12/2012-CE dated 17.03.2012 as allowed to be claimed as an alternative plea by the Tribunal in the de novo proceedings, thus, there are no reason to invoke extended period of limitation. The denial of benefit of exemption N/N. 6/2006-CE dated 01.03.2003 and N/N. 12/2012-CE dated 17.03.2012 and denial of benefit of exemption from SAD under N/N. 20/2006-Cus. dated 01.03.2006 and N/N. 21/2012-Cus. dated 17.03.2012 are upheld; differential duty with interest to be calculated for the normal period of limitation; penalty is set aside - Admissibility of exemption from BCD on Solar Photovoltaic Glass under of N/N. 25/1999-Cus. dated 28.02.1999 and No.24/2005-Cus. dated 01.03.2005 to be examined. The matter is remanded to the Commissioner for computation of liability - Appeal disposed off by way of remand.
Issues Involved:
1. Eligibility for exemption under Notification No.06/2006-CE and Notification No.12/2012-Cus. 2. Eligibility for exemption from Special Additional Duty (SAD). 3. Eligibility for exemption from Basic Customs Duty (BCD) on Solar PV Glass and Edge Tape. 4. Applicability of the extended period of limitation. Issue-Wise Detailed Analysis: 1. Eligibility for Exemption under Notification No.06/2006-CE and Notification No.12/2012-Cus.: The appellants, a 100% Export Oriented Unit (EOU), imported parts such as Photovoltaic Glass, Solar Cells, Aluminium Profiles, Solder Flux, and Packing materials without payment of duty. They claimed exemptions under Notification No.6/2006-CE and Notification No.12/2012-Cus. for these parts used in manufacturing Solar Modules. The Tribunal had previously denied these exemptions, remanding the matter to examine alternative notifications. The Commissioner, in de novo proceedings, denied these exemptions again, stating that the notifications apply only to parts manufactured and consumed within the factory. The Tribunal upheld this view, referencing previous cases like M/s. Sova Solar Limited and M/s. Raydean Pvt. Ltd., and Supreme Court rulings in M/s. Dilip Kumar and Co., emphasizing strict interpretation of exemption notifications. 2. Eligibility for Exemption from Special Additional Duty (SAD): The Commissioner confirmed the demand for SAD, asserting that since the appellants were not entitled to BCD and CVD exemptions, they could not claim SAD exemption either. The Tribunal upheld this decision, reiterating that the denial of CVD exemption under Notification No.6/2006-CE and Notification No.12/2012-CE also negates the SAD exemption under Notification No.20/2006-Cus. and Notification No.21/2012-Cus. 3. Eligibility for Exemption from Basic Customs Duty (BCD) on Solar PV Glass and Edge Tape: The Commissioner confirmed the demand for BCD on Solar Photovoltaic Glass and Edge Tape, noting that the appellants did not claim exemptions for these items under any alternate notifications. The appellants conceded the demand for Edge Tape but contested the BCD on Solar Photovoltaic Glass, claiming exemptions under Notification No.25/1999-Cus. and Notification No.24/2005-Cus. The Tribunal remanded this issue to the Commissioner for re-examination, as the Commissioner had not considered these exemption claims. 4. Applicability of the Extended Period of Limitation: The Tribunal found that the issue pertained to the interpretation of exemption notifications, which the appellants were allowed to claim as an alternative plea in de novo proceedings. Therefore, the Tribunal ruled that invoking the extended period of limitation was not justified. Consequently, penalties and interest were set aside, and differential duty with interest was to be calculated for the normal period of limitation. Conclusion: The Tribunal upheld the denial of exemptions under Notification No.6/2006-CE and Notification No.12/2012-Cus. and the corresponding SAD exemptions. It remanded the issue of BCD exemption on Solar Photovoltaic Glass for re-examination and ruled out the applicability of the extended period of limitation. The appeals were disposed of accordingly, with specific directions for computation of liability. (Order pronounced in Open Court on 27.09.2024.)
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