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TMI Blog2022 (6) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of SGPS. These cables only transfer the electrical energy generated by the SGPS, to the Inverters where such electrical energy is stored for further use - the SGPS generates electrical energy from sunlight and the impugned cables, as any cables, just carries the generated electricity from the SGPS to the Inverters. Further as per Notes to Section XVI of GST Tariff, in Note 2 referring rules for classification of parts of machines, the parts of the articles of heading 8544 have been excluded. The applicant has not been able to bring clearly out as to how the impugned cables can be considered as parts of the SGPS. In fact, the submissions clearly show that it the impugned cables just carry electricity to the inverters and in our opinion the subject cables cannot be considered as a parts of the SGPS and therefore cannot be covered under Sr. No. 234 mentioned above. Another fact to understand is that the said Sr. No. 234 has been totally omitted from Schedule I of Notification No. 01/2017 dated 28.06.2017, vide Notification No. 08/2021 - CTR dated 30.09.2021. Whether the impugned cables can be covered under Sr. No. 395 of Schedule III of Notification No. 01/2017 dated 28.06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 28 June 2017 liable to CGST at 2.5%? OR b) Entry number 395 of Schedule III of Notification No. 1/2017- Central Tax (Rate) (as amended) dated 28 June 2017 liable to CGST at 9%? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT 2.1 M/s Leoni Cable Solutions India Pvt. Ltd. ('applicant' or 'Company'), a subsidiary of LEONI kabel GmbH (formerly, LEONI Kabel Holding GmbH) ('group Company'), manufactures supplies solar cables commonly known as photo-voltaic DC cables ('PVDC cables') under various brand names. 2.2 The said cables are made from copper conductor with Cross-linked Polyolefin (XLPO) insulation are used between solar modules inverters in a phot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n No 1/2017 CTR dated 28.06.2017 (as amended) i.e. Entry No. 234 (Schedule I) 395 (Schedule III), relevant for classification (8544) of insulated solar cables. 2.7 To get classified under description of clause (c) of Entry number 234, the goods must be covered by Chapter Heading 84, 85 or 94; and secondly, the goods should satisfy the description renewable energy devices parts for their manufacture in the instant case parts for manufacture of SPGS. There is no doubt that the subject cables are covered under Chapter 85 but whether the impugned solar cables can be termed as a part for manufacturing of SPGS/EPC Company setting up a solar power plant. 2.8 The term 'Power' is not defined in the GST Acts/Chapter Section Notes of CTA. Therefore, reliance is placed on The Electricity Act' 2003 which defines the term 'Power system as under: Power System' means all aspects of generation, transmission, distribution and supply of electricity and includes one or more of the following namely:- a) Generating stations; b) Transmission or main transmission lines; c) Sub-stations; d) Tie-lines; e) Load dispatch activities; f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial component on which whole functioning of system relies. In the instant case cables are absolute necessary part in the initial setting up manufacturing of SPGS. Thus, cables are an essential component in SPGS. Further, the said cables are exclusively used as an input in SPGS/EPC Company setting up a solar power plant. Hence, it is can be said that PV DC cables are used for connecting transferring energy between solar panels/ array inverters. It is pertinent to note that if cables are not connected within the system then there would be no flow/ transfer of power from one point to another. Thus, these cables construe as an integral part of system without which the whole system cannot function and operate. 2.15 It is submitted that the word 'cables' should be understood in the same sense as it is understood by Common man which is used to connect modules inverter without which the whole system would be inactive. Therefore, considering cables as an integral part of SPGS, the second condition for classifying under Entry number 234 is also satisfied. 2.16 Therefore, the term 'Solar Power Generating System' would subsume all devices and parts used in its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing Advance Rulings which are relevant to facts of the present case,- a) Karnataka Appellate Authority for Advance Ruling ('AAAR') in case of Triveni Turbine Limited (2019) b) Maharashtra Authority for Advance Ruling ('AAR') in case of Mukand Limited c) Advance Ruling pronounced by Uttarakhand AAR, In case of Eapro Global Limited d) Advance Ruling pronounced by Haryana AAR, in case of M/s. Boldrocchi India Pvt. Ltd. e) Andhra Pradesh AAR, in case of M/s. Enexio Power Cooling Solutions India Pvt. 2.23 Judicial Precedent Reliance is also placed on judgement of Madhya Pradesh - High Court in the case of Belectric Photovoltaic India P. Ltd (2018) which pertains to VAT exemption under erstwhile Madhya Pradesh VAT Regulations. The concerned VAT exemption entry is similar to entry number 234 mentioned in the GST tariff. 2.24 Applicant further submits that it is settled principle that in case of two independent tariff entries, assessee can adopt beneficial interpretation unless proved otherwise. In this regard, reliance is placed on the judgment in case of CCE v. Minwool Rock Fibres (2012 (278) E.L. T. 581 (S.C.)] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered by Entry No. 234 of Schedule I of the CGST Act, 2017, liable to CGST at 2.5% SGST at 2.5%. 5.4 However, the applicant also submits that there are two competing entries in GST Tariff, relevant for present classification (8544) of insulated solar cables. Both relevant entries as per Notification No 1/2017 CTR dated 28 June 2017 (as amended) are Entry No. 234 and 395. The first relevant Entry is Entry No 234 to Schedule I of the said Notification and the second relevant Entry is Entry No. 39 of Schedule III to the said Notification. Thus, the specific question has been raised by the applicant. 5.5 The applicant has submitted that the impugned cables fall under Chapter Heading 85.44 of the Tariff and we are in agreement with the applicant's submissions on this aspect. Further as per Explanatory Notes to CTH 85.44, provided they are insulated, the heading 85.44 covers electric wire, cable and other conductors used as conductors in electrical machinery, apparatus or installations. We now take up the applicability of Sr. Nos 234 or 395 of the Notification No 1/2017 CTR dated 28 June 2017 (as amended). 5.6 Sr. No. 234 (Schedule - I taxable @ 5% CGST) of the above me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in SPGS. Further, it has been submitted that if cables are not connected within the system then there would be no flow/ transfer of power from one point to another and therefore the impugned cables construe as an integral part of solar power generating system without which the whole system cannot function and operate. Finally, the applicant has submitted that the word 'cables' should be understood in the same sense as it is understood by any Common man. 5.6.4 Sr. No. 234 mentioned above covers Solar Power Generating Systems (SPGS). The SPGS also termed as Photo Voltaic Systems are used to generate electricity from sunlight which can be further used as electrical energy. The submissions made by the applicant clearly show that the impugned cables are connected between the SGPS and Inverters. In other words, the applicant is clearly stating that the impugned cables are not a part of the SGPS i.e. the actual System which generates electricity from Sunlight. The impugned cables as per the application have no part to play in the generation of Solar Power which is the function of SGPS. These cables only transfer the electrical energy generated by the SGPS, to the Inverters whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted with connectors. 5.7.1 The applicant, in its submissions, at para no. B 5 has stated that The most relevant tariff entry as mentioned in the Customs Tariff Act for said cables is: Entry no 85.44 states that Insulated (including enamelled or anodised) wire, cable (including co axial cable) and other insulated electric conductors, whether or not fitted with connectors; optical cables, made up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors 5.7.2 From para no. 5.7 above we see that the description of goods at Sr. No. 395 of Notification No. 01/2017 CTR dated 28.06.2017 is Insulated (including enamelled or anodised) wire, cable (including co-axial cable) and other insulated electric conductors, whether or not fitted with connectors; optical fibre cables, made up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors. 5.7.3 From a reading of para nos 5.7, 5.7.1 and 5.7.2 we observe that the description of goods in Sr. No. 395 exactly tallies with the Tariff Entry 85.44 which goes to show the intention of the government to classify ..... 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