M/S. Shree Venkateswara Engg. ... vs Cce, Coimbatore

(Arising out of Order-in-Appeal No. 253/2004-CE dated 11.08.2004 passed by the Commissioner of Central Excise (Appeals) Coimbatore).

M/s. Shree Venkateswara Engg. Corporation : Appellant

Vs.

CCE, Coimbatore : Respondent

Appearance

Shri M. Saravanan, Consultant, for the Appellant Ms. Indira Sisupal, AC (AR) for the Respondent

CORAM

Honble Shri R. Periasami, Technical Member Honble Shri P. K. Choudhary, Judicial Member

Date of Hearing: 09.10.2015 Date of Pronouncement: 07.01.2016

FINAL ORDER No. 40048 / 2016

Per P. K. Choudhary

This appeal is filed by the Shri Venkateswara Engineering Corporation, Coimbatore against the order of the Commissioner (Appeals) dated 11.08.2004.

2. The brief facts of the case are that the Show Cause Notice was issued on 05.08.2003 to the appellants asking them to show cause why the benefits of the notification 6/2002 dated 01.03.2002 (Sl No. 237 of the notification) should not be denied on the ground that the goods cleared by the appellants were only in parts of non conventional energy devices/systems and not the complete device itself. Sl No. 16 of the list 9 to the said notification covered during the relevant period a complete device and not parts. Parts are allowed for exemption only when they were consumed within the factory of consumption for such manufacturing of such device. The appellant replied to the said Show Cause Notice clearly stating that they had cleared the complete device in Knocked Down Condition. It is a well known fact that huge machineries and devices cannot be cleared in one lot and they can be cleared only in Knocked Down Condition. It is also contended by the appellant that the device/system supplied were fit only for generation of energy and the term device does not cover a particular machine but a group of machines comprising the whole system/device. The original authority did not accept the above grounds and denied the exemption on the grounds stated in the Show Cause Notice.

3. On appeal before the Commissioner (Appeals), the appellant explained the grounds in details emphasizing the point that the entire device as such could not be transported in one lot and the lower adjudicating authority did not appreciate the technical details and methodology followed by the appellants affecting the clearances. The Commissioner (Appeals) rejected the appeal on the very same grounds on which the original order was passed. Hence, this appeal.

4. The Ld. Counsel appearing on behalf of the appellant, Shri M. Saravanan, Consultant reiterated the grounds of appeal and submitted that the impugned order is untenable as the Ld. Commissioner (Appeals) has not appreciated the facts that the items under reference formed part of the non-conventional energy device/system and that the appellants are rightly eligible for exemption under Sl.No. 237 of Notification No. 6/2002-CE dated 01.03.2002. He further submitted that it is erroneously presumed that the items supplied by the appellants are parts of boiler or agro waste fried steam generator which is factually not correct. The items supplied are the machineries formed part of the non-conventional energy device/system. The Ld. Consultant further submitted that the Notification No. 6/2002 exempts non-conventional energy device/system as specified in the list-9 from whole of excise duty leviable thereon. He relied on the following decisions:-

1. CCE, Trichy Vs. BHEL 2009 (247) ELT 263

2. CCE, Coimbatore Vs. Servall Engineering Industries 2004 (168) ELT 125 (Tri.-Chen.)

3. Bharat Heavy Electricals Ltd. Vs. CCE, Hyderabad 2009 (243) ELT 92 (Tri.- Bang.)

4. CCE, Delhi-IV Vs. Rachitech Engineers Pvt. Ltd.

2015-TIOL-1169-CESTAT-DEL

5. The LD. AR Ms. Indira Sisupal, AC, appearing on behalf of the Revenue reiterated para 3.1 of the OIA.

6. After hearing both sides and on perusal of the submissions made by the appellant and on going through the records, we find that, the following facts are relevant. It is seen from the copy of the Purchase Order received by the appellants from M/s Fashion Syncrotex Pvt Ltd, that the order is for Agro based fired Steam Generator. It is pertinent to note here that the said exemption notification admittedly does not refer to any particular description of the device. Sl No. 16 of the list 9 of the said notification which is relevant to the issue in question describes the goods as follows:

LIST 9 (Sl. No. 237 of the Table) (1) Flat plate solar Collector (2) Black continuously plated solar selecting sheets (in cut length or in coil) and fins and tubes (3) Concentrated 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 and desalination system (9) Solar pump based on solar thermal and solar voltaic conversion (10) Solar power generating system (11) Solar photo module and panel for water pumping and other applications (12) Solar drier and system (13) Wind operated electricity generator, its components and parts thereof (14) Water pumping wind mill, wind aero-generator and battery charger (15) Bio-gas plant and bio-gas engine (16) Agricultural, forestry, industrial, municipal and urban waste conversion device producing energy (17) Equipment for utilising ocean waves energy (18) Solarlan (19) Ocean thermal energy conversion system (20) Solar Photovoltaic cell parts consumed within the factory of production of such parts for the manufacture of goods specified at S.Nos. 1 to 20 above.

5. On comparison of these descriptions with other descriptions given in the same list, it is clear that while other descriptions specifically refer to a particular device/machine, the description against Sl No 16, is so wide and comprehensive so as to cover all types of conversion devices which are required for conversion of the waste for producing energy. While the appellants have been ordered to supply specific devices which have been supplied in Knocked Down condition, it is difficult to presume that the goods cleared by them in such a condition cannot be brought under the broad description shown in Sl No 16 of list 9 of the notification. It is not the case of the Revenue that the goods supplied by the appellants even in knocked down condition do not contribute for the conversion of the waste into energy. The appellants had produced the diagram to substantiate that all the individual items supplied in knocked down condition would contribute to the ultimate product namely a boiler/generator which could not be supplied in one lot. As it has already been observed above, the description in list 9 to the said notification being very wide cannot be given a restricted meaning that it could not cover each individual item which is cleared in knocked down condition as the description covers all devices meant for the ultimate purpose.

While giving a finding as above we have taken into consideration the broad description of the device as shown in Sl No 16 of list 9 of the said notification and we have not taken into consideration the individual identity which may or may not be there of the goods cleared. When a description is very wide without excluding any specific category of items it would not be permissible to deny the benefit of exemption based on individual description which is not mentioned in the notification. In the case of Hemraj Gordhandas Vs. CC - 1978 (2) E.L.T. J 350 (S.C.), Wherein it was held that, it is well established that in a taxing statute there is no room for any intendment but regard must be had to the clear meaning of the words. The entire matter is governed wholly by the language of the notification. If the tax-payer is within the plain terms of the exemption it cannot be denied its benefit by calling in aid any supposed intention of the exempting authority. If such intention can be gathered from the construction of the words of the notification or by necessary implication therefrom, the matter is different.

We notice from the findings of the lower authorities that the goods cleared by the appellants have reached finality in the sense that they have become identifiable goods though according to the lower authorities they are only parts. We find that this conclusion has not been arrived at based upon the description of the items in the said notification with reference to the exemption claim as we have already mentioned that the description would cover all devices without reference to the nature of the device or description of the devices. If the items cleared have attained individual identity and finality it cannot be said it is not a device. Therefore, taking into consideration the specific description under which the exemption is allowed, we have no hesitation in allowing the exemption as the items in question are only devices for the purpose of conversion of the waste material into non conventional energy for which purpose the exemption is granted. We are also persuaded by a decision taken by the Honble Tribunal in CCE Del v/s Rachitech Engineers Pvt Ltd (supra), where at para 5 which is relevant is reproduced as under:-

5. We have considered the submissions from both the sides and perused the records. Sl.No.237 of the table to the Notification 6/2002-CE covers "non-conventional energy devices / systems specified in list 9." Sl.No.16 of the list 9 covers "agricultural, forestry, agro industrial, industrial, municipal and urban waste conversion devise producing energy". There is no dispute that the chimneys manufactured by the appellant are meant for biomass burning boilers being manufactured by M/s. ISGEC John Thompson who in turn, supply such broilers to the end-users for production of energy from waste. The Commissioner (Appeals)'s view is that since what is covered by Sl.No.237 of Notification No.6/2002-CE is the non-conventional energy devices/ systems and since there is very thin distinction between part and device, as the device is thing made for a particular purpose and since chimney being an integral part of the biomass fired broiler can be treated as a device for non-conventional energy devices/systems, the exemption under this Notification would be available to the chimneys. We agree with the view of the Commissioner (Appeals), as rightly observed by the Commissioner (Appeals), the device is a thing made for a particular purpose and as such the chimney meant for biomass fired boiler has to be treated as non-conventional energy device. The Tribunal has come to a similar conclusion under similar circumstances under the very same notification. Relying on the above reasons, we allow the appeal with consequential relief. Miscellaneous applications disposed.

(Pronounced in open court on 07.01.2016)

(P.K. CHOUDHARY) (R. PERIASAMI) Judicial Member Tehnical Member

BB

1