Commissioner of Central Excise Vs Pearl Insulations Pvt. Ltd. (CESTAT Bangalore)
The Revenue filed an appeal against Order-in-Original No.15/2015 dated 29/06/2015 passed by the Commissioner of Central Excise, Bengaluru-II Commissionerate, after the adjudicating authority dropped a demand of Rs.28,59,13,906/- relating to pole shoes manufactured and cleared by the respondents during December 2009 to June 2014. The Revenue alleged that the respondents had wrongly claimed exemption under Sl.No.84 of Notification No.6/2006-CE dated 01/03/2006 and Sl.No.332 of Notification No.12/2012-CE dated 17/03/2012.
The principal dispute before the CESTAT Bangalore was whether pole shoes manufactured by the respondents and supplied to M/s. Enercon (India) Ltd. for use in rotor assemblies of wind operated electricity generators (WOEG) qualified for exemption under Sl.No.13 of List 5/List 8, which covered “wind operated electricity generator, its components and parts thereof including rotor and wind turbine controller”.
The Revenue contended that the pole shoes were first used in rotor assemblies and that the relevant rotor assembly was manufactured outside the respondents’ factory. It therefore argued that the exemption under Sl.No.13 was unavailable and that the parts provision under Sl.No.21 was applicable. The Revenue also relied upon Board Circular No.1008/15/2015-CX dated 20/10/2015 and several judicial decisions.
The respondents submitted that the pole shoe was a part of the generator rotor assembly, which in turn was a part of the WOEG. They relied upon technical explanations, the Commissioner’s findings, the meaning of “components” and various judicial precedents concerning parts of wind operated electricity generators. They also raised alternative submissions concerning valuation, quantification, limitation and CENVAT credit.
