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TMI Blog2024 (4) TMI 625X X X X Extracts X X X X X X X X Extracts X X X X ..... alleged that during the period December, 2009 to June 2014, they had manufactured "Pole Shoe" and cleared the same without payment of duty by wrongly claiming the benefit of exemption under Sl.No.84 of Notification No.6/2006-CE dt. 01/03/2006 (for the period December 2009 to 15/03/2012) and under Sl.No.332 of Notification No.12/2012-CE dt. 17/03/2012. Show-cause notice was issued to them on 05/01/2015 for recovery of duty of Rs.28,59,13,906/- with interest and penalty. On adjudication, the demand was dropped by the learned Commissioner. Aggrieved by the said order, the Revenue is in appeal. 3.1 Reiterating the grounds of appeal, the learned AR has submitted that since the Pole Shoe cleared to their customer M/s. Enercon (India) Ltd to assemble rotor assembly which in turn is a part of the Wind Operated Electricity Generator(WOEG for short) is not covered under Sl.No.13 of List 5 / 8 of the Notification. But, as per Sl.No.21 of the said List 5 /8 of the relevant notifications, exemption is available to parts consumed within the factory of production of such parts for manufacture of WOEG since it is not consumed in the factory of the respondent but cleared to customers to be used ul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... WOEG and the same may be considered as the parts used in the manufacture of generator and not the WOEG set up. In the present case, the respondent has manufactured pole shoe specifically for use within the generator part of WOEG by using raw materials supplied free of cost by their clients and the pole shoe are assemble to the generator assembly at the site of installation of windmill. It has no separate identity once attached to the generator unit of WOEG and hence treated to be internal part of the WOEG 3.4. He has further submitted that the exemption under Sl.No.13 is not available to the said pole shoe, however the sr. no.21 of list 5 /8 of respective Notification may be applicable to such sub-parts provided the said parts are consumed within the factory of production of such parts for the manufacture of goods specified at Sl.No.13. Further it is submitted by the learned AR that the entry at item Sl.No.21 has been omitted w.e.f. 11/07/2014; instead of a new exemption No.332A was inserted within condition at Sl.No.2 stating that in the event the parts are used elsewhere in the factory of product, the procedure laid down in the Central Excise (Removal of Goods at Concessional ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the generator rotor assembly is placed inside the generator stator assembly; the generator assembly is made to rotate by the shaft which is connected to the rotor which in turn is rotated by the rotor blades through rotor hub; the windmill coils/pole shoes are part of generator rotor assembly and the generator rotor assembly is the main part of the windmill and the generator rotor assembly along with the stator assembly and pole shoes together as a component help to generate the electricity. It is his contention that the rotors referred by the Department is different from rotor assembly manufactured by respondent which is inside the generator along with generator-stator assembly for generation of electricity. 4.4. He has further submitted that windmill coils/pole shoes manufactured by respondent is eligible for exemption from duty for the period December 2009 to 16/03/2012 under Sl.No.84, which reads as "any chapter for non-conventional energy devices / systems specified in List 5 and List 5, Sl.No.13 - Wind operated electricity generator, its components and parts thereof including rotor and wind turbine controller and for the period 17/03/2012 to June 2014 under Sl.No.332 read w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation No.12/2012-CE is prospective in nature and therefore the above procedure is not applicable to their case. 4.7. On the issue of valuation, it is submitted on behalf of the appellant that once the windmill coils / pole shoe manufactured by the appellant is exempted, then the question of valuation does not arise. Alternatively, it is submitted that since they were carrying out the manufacturing of pole shoe on job work basis using the copper supplied by the customer as one of the raw materials and the manufactured pole shoe transferred to the principal manufacturer; therefore valuation under Rule 4 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 not applicable, but Rule 10A would be applicable under which the principal manufacturer is liable to pay duty on the final products. 4.8. Further they have raised the issue of quantification of the demand by pointing out that various discrepancies in the computation of the demand which need to be considered. Further they have submitted that if demand is sustainable, the appellant would be entitled to claim cenvat credit on the inputs used in the manufacture of pole shoes. 4.9. On the issue of limita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : - Notification No.6/2006-CE Sl. No. Chapter or heading or sub-heading or tariff item of the First Schedule Description of excisable goods Rate Condition No. 84 Any Chapter Non-conventional energy devices / systems specified in List 5 Nil - List 5 (See S.No.84 of the Table) (1) Flat plate solar Collector (2) Black continuously plated solar selective coating sheets (in cut length or in coil) and fins and tubes (3) Concentrating and pipe type solar collector (4) Solar cooker (5) Solar water heater and system (6) Solar air heating system (7) Solar low pressure steam system (8) Solar stills and desalination system (9) Solar pump based on solar the rmal and solar photovoltaic conversion (10) Solar power generating system (11) Solar photovoltaic module and panel for water pumping and other applications (12) Solar crop drier and system (13) Wind operated electricity generator, its components and parts thereof including rotor and wind turbine controller (14) Water pumping wind mill, wind aero-generator and battery charger (15) Bio-gas plant and bio-gas engine (16) Agricultural, forestry, agro-industrial, industrial, municipal and urban waste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocess of manufacture of 'rotor' and WOEG being outside the factory premises; hence not admissible under sr. No.13 of the said exemption Notification. 11. The learned Commissioner disagreeing with the Department's view taking note of the report of the jurisdictional Range Officer and the method of manufacture of 'pole shoe' and the certificate by the consulting engineer came to the conclusion that the windmill coils/pole shoe is an essential part of wind turbine generator as they are used as coil attached to the generator rotor assembly so as to rotate within the generator stator assembly within generator in the wind turbine generator. He has further observed that the generator rotor assembly is totally different from the rotor which is located outside the generator of wind turbine generator; hence he concluded that pole shoe manufactured is a part of the generator rotor assembly which in turn part of the wind turbine generator and not a part of the rotor assembly as alleged in the show-cause notice. 12. The relevant portion of the findings of the learned Commissioner is reproduced as below:- 26. In the above background, the primary issue to be determined is whether the 'Pole sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coils/Pole shoe' is an essential part of Wind Turbine Generator since they are used as coils attached to the 'Generator rotor assembly' within the 'Generator' in the Wind Turbine Generator. The stator assembly' within the 'Generator' in the Wind Turbine Generator. The 'Generator rotor assembly' is totally different from the 'ROTOR' which is located outside the Generator of Wind Turbine Generator. The Rotor is the rotating part of the Turbine to which rotating blades are fixed and also has a 'controller'. The Pole shoe on the other hand is used in 'Generator rotor assembly' which is located inside the Wind Turbine Generator. The 'Generator rotor assembly' is made to rotate by the shaft which is connected to the 'Rotor' which in turn is rotated by the 'rotor blades' through 'rotor hub'. Even though the main 'Rotor', 'rotor hub' and 'rotor blades' have the similar name as that of 'Generator rotor assembly', they are functionally different as the main 'Rotor' along with the rotor blades is that part of the wind mill which generates mechanical energy using wind power, whereas, 'Generator rotor assembly' is used inside the generator along with 'Generator stator assembly' for generation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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