Solgen Energy Pvt. Ltd Vs Commissioner of Customs (Kerala High Court)
Kerala High Court has affirmed a decision by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruling that inverter units imported without accompanying photo-voltaic cells are not eligible for customs duty exemption under Notification No. 12/2012 CE dated March 17, 2012. The judgment, delivered in the appeals filed by Solgen Energy Pvt. Ltd., reinforces the requirement that the imported goods must constitute a complete “Solar Power Generating System” to qualify for the exemption.
Solgen Energy Pvt. Ltd. had imported “Grid Tied Solar Inverters” and claimed exemption from additional customs duty under the aforementioned notification. The original customs authority, however, rejected this claim, contending that the imported goods did not qualify as a Solar Power Generating System.
Upon appeal to the First Appellate Authority, Solgen Energy Pvt. Ltd. found success. The First Appellate Authority concluded that the revenue had not presented evidence demonstrating multiple uses of the solar inverter. Furthermore, it held that exemption notifications should be construed liberally in favor of the assessee, thereby granting the benefit of the exemption to the imported inverters.
The Customs Department subsequently challenged this decision before the CESTAT, Bangalore. The Appellate Tribunal, in its impugned orders dated February 16, 2024, and July 11, 2024, reversed the First Appellate Authority’s findings. CESTAT determined that since Solgen Energy Pvt. Ltd. had imported only the inverter component of the Solar Power Generating System and not the essential photo-voltaic cell necessary for solar energy capture, the import did not constitute a “solar power generating system” as defined for the purpose of the notification. Consequently, the Tribunal found the appellant ineligible for the exemption and allowed the Customs Department’s appeal.
