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TMI Blog2025 (1) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts are enumerated below for ease of reference: * The appellant is engaged in supply of goods required for setting up of power projects enabling generation of power through renewable sources of energy on its own & through its subsidiary companies; * Appellant manufactures Wind Operated Electricity Generators [WOEG] falling under chapter 85023100; parts like Nacelle, Blades & Towers falling under chapter heading 8503; transformers falling under chapter heading 8504. * Transformers for WOEG is installed on the ground adjoining WOEG & is a device to link the electricity generated by the WOEG to the distribution grid and make it usable for distribution/consumption; * The appellant feels that the transformers are specially/specifically designed to be used along with WOEGs & is therefore to be treated as part of WOEG. 4. In view of the foregoing facts, the appellant had sought Advance Ruling on the following questions, viz: The specially designed Transformers for Wind Operated Electricity Generators which are meant to perform dual function of Step Down and Step Up manufactured by Suzlon and supplied to the customers of Suzlon as part of Wind Operated Electricity Generator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not on bill to ship basis. 6. The GAAR, vide the impugned ruling dated 18.10.2021, held as follows RULING 1. Transformers are not part of WOEG and are leviable to CGST @ 9% vide Sr. No. 375 of Schedule-III of Notification No. 1/2017-CT (Rate) dated 28-6-2017. 7. Aggrieved by the aforesaid advance ruling, the appellant is before us, raising the following contentions, viz * impugned order erred in holding that in the case of Enercon India, the matter was remanded back; in-fact in the said case the Hon'ble SC allowed the appeal while holding that transformers are vital parts of a windmill; * the impugned order failed to look at the transformer from the angle of general principles of interpretation; that they should also be understood by their popular meaning/common parlance principle; * that WOEG and Wind Turbine system are used interchangeably; that there is no difference between the two; * the appellant never expected any ruling considering the same as a composite supply; * that had the transformer been placed in the Nacelle or the tower, the benefit of the notification would have been allowed; * that though the transformer placed adjacent to the WOEG, is doing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elating to exemption of parts and components of WOEG not covered in para 3 above may be referred to Board through the Chief Commissioner concerned, if required. 6. Difficulty experienced, if any, in implementing the circular should be brought to the notice of the Board. Hindi version would follow. Subject: Clarification regarding tower and blades constitute an essential component of Wind Orated Electricity Generators (WOEG)-reg. A large number of references have been received from the trade as well as the field formations to clarify whether exemption Notification No. 12/2012-Central Excise, dated 17.03.2012 covers part/components of Wind Operated Electricity Generators (WOEG). References have been received in relation to tower, tower doors, blades and electrical boxes. 2. The matter has been examined. In the aforesaid notification serial no. 332 read with List 8 exempts 'Wind operated electricity generator, its component and parts thereof including rotor and wind turbine controller' from Central Excise duty. In this regard, attention is invited to the judgement of Hon'ble Supreme Court dated 13th August, 2015 in case of M/s Gemini Instratech Vs Commissioner of Central Excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o generation of electricity would not be eligible for exemption. In view of the sponsoring zone, it would be desirable that the list of equipments / parts /components eligible for exemption may be spelt out in the Exemption Notification. Discussion & Decision It was noted in the conference that a clarification has already been issued on 20.10.2015 vide Circular No. 1008/18/2015-CX by the Board wherein details of parts on which exemption is available is specified. Ministry of New and Renewable Energy had clarified to CBEC that tower, nacelle, rotor, turbine controller are parts of wind turbine and accordingly the circular has been issued clarifying that exemption is available to these parts. For details, the above noted circular may be referred. * Notification No.1/2017-Central Tax(Rate), the 28.06.2017 Schedule I-2.5% S.No. Chapter/Heading/Sub-heading/ Tariff item Description of Goods (1) (2) (3) 234. 84 or 85 Following renewable energy devices & parts for their manufacture- (a) Bio-gas plant (b) Solar power based devices (c) Solar power generating system (d) Wind mills. Wind Operated Electricity Generator (WOEG) (e) Waste to energy plants devices (f) So ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vident, transformers have not been included as parts of WOEG by the Ministry of New and Renewable Energy and hence, the contention of the appellant that they are parts of WOEG is not a legally tenable argument. 13. The next averment is that GAAR failed to examine the transformer from the angle of general principles of interpretation & that they should be understood by their popular meaning/common parlance principle. We find that the appellant has not produced any material before us which could lead us to a conclusion that transformer in terms of their popular meaning/common parlance principle, are part of WOEG. Further, when the concerned Ministry itself has not included transformer to be a part of the WOEG, the reliance on popular meaning, etc., is not a plausible argument. 14. The next averment of the appellant is that the GAAR erred in holding that the order in the case of Enercon India Ltd, ibid, is not applicable; that the matter has not been remanded back to the assessing officer but instead the appeal stands allowed by the Hon'ble Apex Court. We have read the order dated 8.3.2016 in CA No. 1954/2006, passed by the Division Bench of the Hon'ble Supreme Court. The matter in- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above, the Assessing Officer himself classified such goods involved in execution of works contract. Once this was the opinion of the Assessing Officer and the part of work viz. foundation or erection work related to works contract, on this ground itself no sales tax could have been charged thereon. We have also pointed out above that even the First Appellate Authority proceeded on the basis that the work like foundation work, electrical work, commissioning etc. was "series of activities and further that it was indivisible". On this finding as well, no further action to levy sales tax was 6 required. [emphasis supplied] The aforementioned order of the Hon'ble Supreme Court is on an entirely different aspect relating to a different law and to an exemption, which incidentally is not a dispute in the present proceeding. The findings of the Hon'ble High Court, as quoted supra and of the Supreme Court are qua the Act and the exemption in question. In view of the foregoing, the appellant's averment relying on the above judgement that the specially designed transformers for WOEG, which perform dual function of step down and step up, should be treated as a part WOEG, is not legally tenabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interpreted strictly. We substantiate this finding, by relying on the judgement of the Constitution Bench of the Hon'ble Supreme Court in the case of Dilip Kumar and Company [2018 (361) ELT 577 (SC)] wherein the Court held as follows viz relevant extracts| 52. To sum up, we answer the reference holding as under- (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. (3) The ratio in Sun Export case (supra) is not correct and all the decisions which took similar view as in Sun Export case (supra) stands overruled. 17. We therefore, hold that the specially designed transformers for WOEG, which perform dual function of step down and step up, supplied by the appellant is not a part of WOEG and hence it would not be eligible for the benefit of Sr. No. 234 and Sr. No. 201A of exemption notification ..... X X X X Extracts X X X X X X X X Extracts X X X X
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