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TMI Blog2019 (2) TMI 1389X X X X Extracts X X X X X X X X Extracts X X X X ..... tem. If one ingredient is missing, the solar power generating system will not function - thus solar power generating system would necessarily include a substation for evacuation and upliftment of power generated by solar power plants. The Hon'ble Supreme Court in the case of CCE v/s Hewlett Packard India Sales Pvt. Ltd. [2007 (8) TMI 347 - SUPREME COURT OF INDIA] has explained the meaning of word 'System' with reference to operating system of the computer and it has been held that the pre-loaded operating system recorded in the hard drive of the computer is an integral part of the computer, without which, the computer cannot open and work and has been classified as operating system under entry relating to computer itself. Even by taking into account the aforesaid judgment, this Court is of the opinion that power generating system includes all components even the grid/goods related to substation, without which, the system cannot work - Once an exemption has been granted in the matter of Value Added Tax/Entry Tax for setting up solar power based projects, the exemption has to be given in respect of a complete project, as all the equipment used in the project are integral part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng solar energy and the policy framed on the subject is known as Policy for Implementation of Solar Based Power Project in Madhya Pradesh \, 2012 . The policy provides various incentives to the developer of the project including exemption from value added tax/entry tax. The policy of exemption has been incorporated in Schedule-1 of the Madhya Pradesh Value Added Tax, 2002 as entry No.71. The entry No.71 reads as under:- ( 1) Flat plate solar collectors. ( 2) Concentrating and pipe type solar. ( 3) Solar cookers. ( 4) Solar water heaters. ( 5) Solar crop driers and systems. ( 6) Solar air/gas/fluid heating system. ( 7) Solar refrigeration, cold storages and air conditioning system. ( 8) Solar stills and desalination system. ( 9) Solar pumps based on solar thermal and solar photovolatic conversion. ( 10) Solar power generating system. ( 11) Solar photo-voltaic modules and panels for water pumping and other applications. ( 12) Windmills and any specially designed devices which run on windmills. 13. Any special devices including electricity generators and pumps running on wind energy. 14. Bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02. It is well known that the Government of MP has recently announced its solar policy for encouraging establishment of solar power generation systems in MP and various projects have been approved by government. One such project relates to M/s Focal Energy Group who has entered into contracts in question with the applicant company for construction and installation of th solar power plants at site on EPC basis. The said Focal Energy Group how has won the Govt. bid for sale of solar power, as a part of requirement of bid, formed separate project companies as special purpose vehicles (SPVs) and has entered into a separate contracts with the applicant company through the SPVs. As per the technical requirements in case of solar plants, separate plants of smaller capacities are required to be set up and the power generated from such plants in required to be transmitted to one common sub station. The applicant company submits that as stated above, the applicant company has been awarded a contact for installation of one such solar plant as also for installation of the common grid on EPC basis and accordingly the applicant company has entered into two separate contracts with Three SPV ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. ---------------, 12.---------------, Contention of the applicant As stated above since the existence of a substation is an essential technical requirement of a solar power plant without which the solar energy generated by such plant cannot be put to consumer use and since in the present case as per the contract between the applicant and the client Focal Energy Solar India One (P) Ltd and Globus Steel and Power Pvt. Ltd. construction of substation, its connection of solar plant and successful transmission of power from plant to substation is an essential condition of contract. Thus in the instant case, supply of substation equipment being a part of contract for construction / installation of solar power generation plant, such equipments are also convered by exemption under item No.10 of Entry No.71 of Schedule I of the MP VAT Act, 2002. Renewable Energy Devices or Equipments, including their parts, that is to say - ( 1) Flat plate solar collectors. ( 2) Concentrating and pipe type solar. ( 3) Solar cookers. ( 4) Solar water heaters. ( 5) Solar crop driers and systems. ( 6) Solar air/gas/fluid heating sys ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has made an attempt to include non-exemption article in the exemption category, which is not permissible, in light of the statutory provision as contained under the Madhya Pradesh Value Added Tax Act, 2002 and the exemption is only available in respect of the articles mentioned in entry No.71 of Schedule-1 of VAT Notification, 2002 and Entry Tax Notification, 1976. 11. The respondents have placed reliance upon a judgment delivered by Division Bench of Bombay High Court in the case of Commissioner of Sales Tax v/s Jayanand Khira Co. Pvt. Ltd reported in (1975) 36 STC 242 Bombay and their contention is that in light of the aforesaid judgment, the present writ petition deserves to be dismissed. 12. Heard learned counsel for the parties at length and perused the record. 13. Undisputedly, the State Government has framed a policy to promote establishment of solar power generating system and the policy provides for exemption in the matter of payment of VAT and entry tax. The policy is known as Solar Power Based Project in Madhya Pradesh, 2012. The policy framed by the State of Madhya Pradesh has been incorporated under the Madhay Pradesh Value Added Tax Act, 2002 as en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd which comprise at least a central processing unit, one input unit (for example, a keyboard or a scanner), and one output unit (for example, a visual display unit or a printer).[Customs Tariff Act (51 of 1975), I Sch, Import Tariff S. XVI, Chap. 84, Note 8, Sub-heading] Keeping in view the aforesaid, it can safely be concluded that solar power generating system would necessarily include a substation for evacuation and upliftment of power generated by solar power plants. 16. The Hon'ble Supreme Court in the case of CCE v/s Hewlett Packard India Sales Pvt. Ltd. reported in (2007) 11 STJ 625 has explained the meaning of word 'System' with reference to operating system of the computer and it has been held that the pre-loaded operating system recorded in the hard drive of the computer is an integral part of the computer, without which, the computer cannot open and work and has been classified as operating system under entry relating to computer itself. 17. The respondents have certainly placed reliance upon a judgment delivered in the case Commissioner of Sales Tax (supra) and the Bombay High in the aforesaid case has held as under:- that in or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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