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TMI Blog2022 (8) TMI 1214X X X X Extracts X X X X X X X X Extracts X X X X ..... Wind Operated Electricity Generators and filed three bills of entry through their Customs Broker, by availing Basic Customs Duty [BCD] concession under Sl.No.362(3) of the Customs Notification No.12/2012-Cus., dated 17.03.2012 (read with Condition No.45) and exemption from additional duty of customs under Sl.No. 14-C of the Customs Notification No.21/2012-Cus, dated 17.03.2012, as amended (read with condition No.46 of the Customs Notification No.12/2012- Cus, dated 17.03.2012). The sale of Rotor Blades does not bar the importer to avail credit benefits, who sells it to his customer. The importer still have the contractual responsibility of manufacturing (assembly, erection and installation) of the Windmill at the customer's site, as they are the manufactures of Wind Turbines. As per the contract terms, the full value of the invoices paid only on successful commissioning of Windmills, not by invoice wise. It is an admitted fact that the petitioner used the Rotor Blades only in the manufacturing of Wind Operated Electricity Generators and further, Rotor Blades is not used for any other purpose. The only objection is that, clause (b) of Condition No.45 of Notification No.12/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough Tuticorin Port, for manufacture, erection and installation of the Wind Operated Electricity Generators in the specified site of the customers. While some of the parts are manufactured by the petitioner in the factory, certain other parts such as Rotor Blades, Tower and Transformer are imported and sent to the site directly where the Windmills are to be installed. Thereafter, the final product namely, Windmill would come into existence at the site. 4.During the year 2016, one Sun Photo Voltaic Energy Private Limited, Bangalore, placed a Turnkey contract on the petitioner, whereby the petitioner was required to set up 26 Windmills in Bannur Wind Project in Karnataka. The contract involved supply, erection, installation and commissioning of Wind Turbines at the site. The said Sun Photo Voltaic Energy Private Limited awarded two contracts to the petitioner, one for supply of all equipments and the second one for erection, installation and commissioning services. 5.The petitioner imported 78 Nos. of Rotor Blades from China for manufacture and installation of 26 Windmills. The said imported Rotor Blades were directly moved from the Tuticorin Port to the site in Karnataka, wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;. The petitioner submitted necessary certificate from the Ministry of Non-Conventional Energy, Government of India, and gave an undertaking that they would use the imported goods for the ''specified purpose''. Thereafter, the petitioner availed concession/exemption by giving an undertaking that the Rotor Blades imported would be used for manufacture of the Windmill. This being so, the Special Intelligence and Investigation Branch of the Customs Department at Tuticorin, conducted investigation into import of Rotor Blades made by the petitioner during May, 2018. The petitioner produced the required documents such as, copies of bills of entry, import invoice, bill of lading, purchase order, letter of credit, contract copies and end-user certificate. Further, the petitioner explained that they are the manufacturer of Windmill and as such, they install, erect and commission the Windmills for the customers at the respective site under an agreement and that they are eligible for availing the exemption available. 9.Based on the investigation, the respondent issued a show cause notice dated 17.09.2018, to the petitioner alleging that suppression of facts have been made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istence. Further, the contract work i.e ., erection, installation and commissioning of the Windmill is a turnkey project, only on completion of all these process, it could be said that the contract is complete and Windmill is commissioned. Further, these activities need expertise, knowledge and know how, not anyone and everyone can collect the materials, erect and install a Windmill. From the stage of drawing, placing orders, transportation, erection and commissioning all done by petitioner. 12.Rotor Blades is one of the main parts of the Windmill as per the Board's Circular No.1008/15/2015-CX, dated 20.10.2015, wherein it is stated that Wind Turbine is not complete without Rotor Blades and Rotor Blades cannot be used for any other purpose. A condition was stipulated in the Notification for its use in the manufacture of Windmill and to prevent it for export. The point of sale of the Rotor Blade is not relevant for the purpose of availing concessional rate of duty and it is not contemplated indirectly in the Exemption Notification No.12/2012-Cus, dated 17.03.2012. 13.In support of their contentions, the petitioner relied on a decision in the case of Rajasthan Tube Mfg. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be an intention on the part of the assessee to evade the duty. 20.In Granite India Limited vs. Collector Central Excise, Coimbatore [92 ELT 84 (Tri.-Mad.)], the Tribunal held that to constitute a willful suppression, there must be a material to show that the noticee who knowing fully well that he was required to furnish a particular fact to the Department, failed to furnish the same with an intention to evade payment of duty. 21.The respondent/adjudicating authority failed to consider the submissions and the materials supplied by the petitioner. In violation of the rulings of the Hon'ble Supreme Court and High Court, the respondent had given a finding, referring to Chapter 84(3) of Notification No.12/2012-Cus. dated 17.03.2012, wherein it is stated that the standard rate of blades for rotor wind operated electricity generators for the manufacture or the maintenance of wind operated electricity generators is 5%. The petitioner violated Condition No.45 of the Notification. In condition No.45(b)(ii) of the notification, it is stated that the importer at the time of importation, in case of other goods specified at (2) to (5), shall use them for a specified purpose. 22. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the petitioner after sale. In the absence of any material, the petitioner cannot claim exemption. The petitioner is not eligible for exemption. The citations relied on by the learned counsel for the petitioner do not involve the element of sale. The admitted case of the petitioner is that they sold the imported goods to Sun Photo Voltaic Energy Private Limited, without any condition and without retaining their right. The terms of notification are to be complied in strict sense. The specific condition as per the notification is that concession has to be availed by the actual users after sale without any lien, and the petitioner cannot be termed as actual user. Further, the purchaser of the Rotor Blades is not arrayed as a party in the case. It is only the actual user/buyer can make a claim. The finding of the Officer may not be correct, but that by itself cannot give any right to the petitioner to approach this Court, however, in the case of taxation remedy, straightaway to approach concerned authorities. Further, in his counter affidavit, the respondent has stated as follows:- ''5.It is submitted that the petitioner has imported the goods under the exemption notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture' and 'ownership' for the calculation of Central Excise Duty, which is not clearly specific or relevant in the instant case of consideration of availment of Customs duty exemption notification. 9. I submit that the Hon'ble Supreme Court vide order dated 30.07.2018 in the case M/s.Dilip Kumar Company reported in 2018 (361) ELT 577 (SC) has held that (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. In the present case, the petitioner/importer could not prove that their case comes within the parameters of exemption notification and therefore, the Imported goods are not eligible for duty exemption. 10. I submit that their claim of submission of certificate from the Ministry of Non-Conventional Energy, was issued only on condition that the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, Chennai and another reported in 2021-VIL-154-MAD, wherein a Division Bench of this Court had given broad parameters, within which, the Court has to exercise its jurisdiction under Article 226 of the Constitution of India, which read as under:- ''(i) if there is unfairness in the action of the statutory authority; (ii) if there is unreasonableness in the auction of the statutory authority; (iii) if perversity writs large in the action taken by the authority; (iv) if the authority lacks jurisdiction to decide the issue; and (v) if there is violation of principles of natural justice, the Court will step in and exercise its jurisdiction under Article 226 of the Constitution of India.'' Thus, from the above, it is seen that in all the above cited situations, the question of alternate remedy need not be necessarily invoked. 28.Considering the rival submissions and on perusal of the materials produced by both the petitioner and respondent, it is seen that in the impugned order, the respondent admits that the petitioner is engaged in the business of manufacture and installation of Wind Operated Electricity Generators, for which, they have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and straightaway taken to the petitioner's client, who used the imported Rotor Blades in the manufacture of the Windmill. 30.It is an admitted fact that the petitioner used the Rotor Blades only in the manufacturing of Wind Operated Electricity Generators and further, Rotor Blades is not used for any other purpose. The only objection is that, clause (b) of Condition No.45 of Notification No.12/2012-Cus, dated 17.03.2012, is not followed for the reason that the petitioner/importer, shall not use them for specific purpose. In this case, it has been used for the specific purpose in the Windmill. It is only the word ''he'' is stressed against the petitioner. This cannot be looked into in isolation and it has to be considered as a whole. The petitioner had been awarded Turnkey project and there were two contracts and one of the contracts is for erection, installation and commission. This needs expertise. The petitioner having expertise applied with the Ministry of New and Renewable Energy, got approval, and then imported Rotor Blades and thereafter, transported the same, erected and commissioned the same at the customer's site. It is a known fact that the Wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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