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TMI Blog2022 (11) TMI 945X X X X Extracts X X X X X X X X Extracts X X X X ..... solar panels would be laid on the ground that is at Zero Degree angle which will give the least output as the sunrays shall be perpendicular to the solar panel only at one point of time during the entire day i.e. at 12 P.M. Since viability of power plant depends upon the power output and the output directly depends on the angle at which the structure holds the panel, hence, these structures are the integral component of the solar power generation plant. The solar mounting structures are covered under Notification No.15/2010 dated 27.02.2010 as amended vide Notification No.26/2012 dated 08.05.2012 - the said Notification is a conditional notification. One of the important condition is that an officer not below the rank of Secretary to the Government of India in the Ministry of New and Renewable Energy recommends the grant of this exemption indicating the quantity, description and specification thereof and certifies that the goods are required for initial setting up of a solar power generation project or the facility. The said Certificate (MNRE Certificate) was provided by the appellant to the Department even prior making the impugned clearances. As per the impugned Notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the period from October, 2016 to June, 2017 to various solar power generating Companies by claiming exemption under Notification No.15/2010 dated 27.02.2010 as amended vide Notification No.26/2012 dated 08.05.2012 alleging that the mounting structures cleared by the appellant do not fall under any of the category mentioned in the Notification dated 27.02.2010 that a show cause notice No.1159 dated 28.09.2018 was served upon the appellant demanding the Central Excise Duty amounting to Rs.1,11,61,424/- not being paid by them due to incorrect availment of the exemption Notification of 27.02.2010. The demand of interest and imposition of penalty was also proposed vide the said Show Cause Notice. The proposal was confirmed vide Order-in-Original bearing No.12/2018 - 19 dated 07.02.2019. The order has been upheld by Commissioner (Appeals) vide Order in Appeal No.278/2019 dated 14.10.2019. Being aggrieved, the appellant is before this Tribunal. 2. We have heard Mr. Mehul Jiwani, Chartered Accountant for the appellant and Mr. Sanjay Kumar Singh, Authorized Representative for the Respondent. 3. Learned Counsel for the appellant submitted that the supplies of module mounting structu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uding prime movers, instruments, apparatus and appliances, control gear and transmission equipment and auxiliary equipment (including those required for testing and quality control) and components, required for initial setting up of a solar power generation project or facility, from the whole of the duty of excise leviable thereon which is specified in the First schedule to the Central Excise Tariff Act, 1985 (5 of 1986), subject to the following conditions, namely :- (1) before the clearance of the goods from the factory, the manufacturer produces to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, a certificate, from an officer not below the rank of a Deputy Secretary to the Government of India in the Ministry of New and Renewable Energy recommending the grant of this exemption and the said officer certifies that the goods are required for initial setting up of a solar power generation project or facility; and (2) the manufacturer of such goods furnishes an undertaking to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, having jurisdiction, to the effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, but from the submissions of the appellants and the data provided about the solar roof top system, it is observed that these structures are meant to hold the power generating solar panels at a particular angle. This angle is important to ensure that for a maximum time in a day the sun rays are perpendicular to these panels. In absence of these structures, the solar panels would be laid on the ground that is at Zero Degree angle which will give the least output as the sunrays shall be perpendicular to the solar panel only at one point of time during the entire day i.e. at 12 P.M. Since viability of power plant depends upon the power output and the output directly depends on the angle at which the structure holds the panel, hence, these structures are the integral component of the solar power generation plant. 7. Ministry of New and Renewable Energy in a letter No.24/40/2012 -13 dated 27.02.2013 as was sent to the Department of Revenue, with reference to the correspondence, has clarified that module mounting structures form such essential part of solar power plant that they were the 'components of the plant and hence were covered in the Notifications issued in this regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... user of the article while the word spare indicates the use to which the article is put and not the nature of the article. 9. In view of above observations about meaning of 'Component , we are of the opinion that the solar mounting structures are covered under Notification No.15/2010 dated 27.02.2010 as amended vide Notification No.26/2012 dated 08.05.2012. 10. We further observe that the said Notification is a conditional notification. One of the important condition is that an officer not below the rank of Secretary to the Government of India in the Ministry of New and Renewable Energy recommends the grant of this exemption indicating the quantity, description and specification thereof and certifies that the goods are required for initial setting up of a solar power generation project or the facility. The said Certificate (MNRE Certificate) was provided by the appellant to the Department even prior making the impugned clearances. We observe that Department has not disputed the competence of the authority issuing the said certificate. Accordingly, it is clear that the condition of the notification for availing exemption from duty also stands complied with by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers and excise duty exemption certificate, without mounting structures supplied by the appellant s solar plant cannot be completed. Thus the mounting structures is an integral part of the entire plant . 13. We observe that the Commissioner (Appeals) has taken note of above mentioned findings of previous departmental order, in the impugned order under challenge, however he has still taken a contrary view relying upon two decisions i.e. M/s. Saraswati Sugar Mills (supra) and decision in the case of M/s. Bharti Airtel Ltd. vs. Commissioner of Central Excise, Pune reported in 2014(35) STR 865 but we are of the opinion that both these decisions are not at all applicable to the facts of the present case. In Saraswati Sugar Mills the goods in question were iron and steel structures which were not an essential requirement for the sugar manufacturing unit and in Bharti Airtel (supra) the goods were the towers fastened to the earth on which the antennas were to be installed, hence were not considered to be an accessory or the integral part of the antenna. 14. Present is altogether a different case of renewable energy production and of the components to be used by such production unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of non-compliance of condition under the Notification, it is the project developer who shall be liable to pay the duty which was not paid on account of exemption at the time of clearance and that too only in case when the project developer fails to use the goods for solar power project. The Commissioner, Hyderabad in the order dated 20.10.2014 in the case of M/s. Pennar Industries in para 25.2 thereof has also observed that: Since as per the condition of Notification, duty shall be payable by the project developer and not by the manufacturer that the demand of duty on the manufacturer is liable to be dropped. 17. In view of these discussions, we hold that Commissioner (Appeals) has wrongly confirmed the duty demand upon appellant as manufacturer, for such goods which are exempted from duty. 18. Coming to the point of imposition of the penalty, we observe that penalty has been confirmed under Section11 AC of Central Excise Act, 1944. Penalty under the said section can be levied if and only if there is an intent to evade the payment of duty. In the present case, it is apparent that appellant had intimated the Assistant Commissioner regarding the clearance of impugned exc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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