ORDER
Archana Wadhwa, Member (J)
1. Vide his impugned order, the Commissioner of Central Excise has confirmed duty of Rs. 1,03,31,791/- (Rupees one crore three lakh thirty one thousand seven hundred ninety one only) in respect of the parts of Tower and Lattice Mast cleared by the appellants during the period 1-3-2000 to 31-8-2000 by availing the benefit of Notification No. 6/2000. He has however allowed the appellants to adjust the amount of Rs. 51,65,567/- (Fifty one lakh sixty five thousand five hundred sixty seven only) paid by the appellants @ 8% of the value of the goods in terms of the provisions of Rule 57AD. In addition, personal penalty of identical amount has been imposed on M/s. Hyundai Unilech Electrical Transmission Ltd., in terms of the provisions of Section 11 AC of the Central Excise Act, 1944 read with Rule 173Q and personal penalty of Rs. 2 lakhs, on the Chief Manager (Works), Shri Utpal Kumar Das in terms of Rule 209A of the erstwhile Central Excise Rules, 1944 read with Section 38A of the Central Excise Act, 1944.
2. As per the facts on records, the appellants were manufacturing Tower and Lattice Masts of Iron & Steel and other structures and parts of Iron and Steel falling under Chapter 73 of CETA. They were placed with an order for supply of these goods by M/s. Suzlon Energy Ltd., Daman, for supply of tower materials, which were the part of Wind Mills and will be used for Wind Mills only. A certificate was given by the buyer to the effect that the said Wind Mill parts were exempted from payment of duty in terms of Notification No. 5/98-C.E., dated 2-6-98. Accordingly, appellants filed two classification lists effective from 10-12-99 and 2-3-2000 claiming the benefit of the Notification No. 5/99-C.E., dated 28-2-99 and 6/2000, dated 1-3-2000 respectively. The Revenue however entertained a view that there was no provision for exemption in respect of the parts of Wind Mill in the subsequent Notification No. 6/2000, which granted exemption only to wind operated electricity generators, their components and parts thereof. Inasmuch as the goods manufactured by the appellants were not the parts of the wind operated electricity generator, they were not entitled to exemption. In support of the above view, Revenue compared two notifications i.e. Notification No. 5/99, which was substituted by 6/2000 and held that Serial No. 13 of the List No. 4 of appendix to Notification No. 5/99 granted exemption to Wind Mill parts and Serial No. 14 appended to the said notification granted exemption to any special devices including electric generator running on wind energy, whereas Notification No. 6/2000, Serial No. 13 of List No. 5 exempted only wind operated electricity generators, their components and parts thereof. As such, Wind Mill and parts thereof, which were appearing at serial No. 13 of earlier Notification No. 5/99 was not appearing in Notification No. 6/2000. Accordingly, show cause notice was issued to the appellants on 2-9-2003 raising demand of duty in respect of the clearances affected during 1-3-2000 to 30-8-2000 by denying them the benefit of Notification in question. Personal penalty was also proposed along with confiscation of the seized goods.
3. The appellants challenged the above proposal on merits as also on the point of limitation. However, the appellant’s submissions were not found favour with by the adjudicating authority, who confirmed the demand as also imposed penalty. Hence the present appeal.
4. We have heard Shri Vishwanathan, Id. Advocate appearing for the appellants and Shri Ajay Saxena, Id. SDR for the Revenue.
5. We have considered the submissions made by both sides. The main issue required to be decided is as to whether the parts of Tower and Lattice Masts with accessories stubs and cleats are entitled to exemption under the provisions of Notification 6/2000. Admittedly, Serial No. 265 of Notification No. 5/99, dated 28-2-99 read with Serial No. 13 of List No. 4 appended to the said Notification granted exemption to Wind Mill and parts thereof. Serial No. 251 of subsequent Notification No. 6/2000, dated 1-3-2000 read with Serial No. 13 of List No. 5 appended to the said Notification granted exemption to wind operated electricity generators, their components and parts thereof. The question required to be decided is as to whether the tower material manufactured by the appellants can be considered to be a part of wind operated electricity generator. We note that while considering the said issue, the Commissioner has taken into account, the definition of electric generator as appearing in various technical books and has held that the tower materials cannot be a part of electric generator. However, he seems to have mixed up that it is not simplicitor electric generator, which are specified in the notification but are “wind operated electricity generator, their components and parts thereof”. Admittedly, the tower material is required for full operation of the wind operated electricity generators. The Tribunal in the case of Bharat Heavy Electricals Ltd. v. Collector of Customs, Chennai, reported in 1999 (108) E.L.T. 448 (Tribunal) has considered the technical details of wind operated electricity generator and has held that the same consists of various parts including tower and foundation. As such, it was held that the goods imported without tower cannot be regarded as complete wind operated electricity generators. The distinction made by the Commissioner to hold that the said decision, is not applicable does not appeal to us. He has observed that in the case of Bharat Heavy Electricals Ltd., the Tribunal was considering a situation for import of wind operated electricity generator in CKD/SKD condition and was not considering the fact of clearances of individual items at the time of clearance from the factory. When the exemption in respect of the excise duty is granted to the parts of the wind operated electricity generator at the time of clearance from their factory and the Tribunal having held that the tower is a part of wind operated electricity generator, ratio of the above decision of the Tribunal squarely applies to the facts of the present case. Undisputedly, the goods manufactured by the appellants and cleared by them were meant for wind operated electricity generator, being tower material and, as such, were entitled to the benefit of Notification 6/2000.
6. We also do not see much force in the adjudicating authority’s contention that earlier Notification No. 5/99, dated 28-2-99 extended separate exemption to Wind Mill and parts and to wind energy operated electric generators, thus, indicating that these two items are considered to be two separate goods for the purposes of exemption, inasmuch as Wind Mill and parts have been eliminated in the subsequent notification, the tower materials, which were primarily meant for Wind Mill cannot be allowed exemption. Apart from the facts that Serial No. 13 and 14 of the earlier Notification No. 5/99 specified that Wind Mills and wind operated electricity generators separately, so as to effectively clarify the items for the exemption, which was available to all non-conventional energy device/system, we find that in any case the tower materials being a part of wind operated electricity generator as appearing in subsequent Notification No. 6/2000 would earn exemption as the same is also a part of the wind operated electricity generators. In view of the foregoing, we hold that the exemption was rightly claimed by the appellants.
7. In any view of the matter, we note that the demand is hit by bar of limitation having been raised after the normal period. Admittedly, the appellant had filed two classification lists claiming the benefit of the notification in question and giving full and complete description of the product. The Commissioner has invoked the longer period on the ground that the said classification list was not approved by the departmental officer and the officers had not visited the factory for verification of the said declaration. We note that proviso to Section 11A invoking longer period of limitation is applicable only when an assessee misstates or suppresses any fact from the department with an intention to evade payment of duty. Having placed all the facts before the Revenue by way of filing a classification list, it cannot be said that any material was suppressed by the appellants, so as to justifiably invoke longer period of limitation. It is well settled that claiming of exemption notification by itself cannot amount to any misstatement or suppression. Surprisingly all the relevant information on the basis of which the show cause notice has been issued in the year 2003 has been gathered by the Revenue from the appellant’s own documents and records. What they could do in 2003, could have been done by them within the period of limitation also. If the department was of the view that the notification is not applicable, they could have raised the demand within the normal period instead of waiting for three years to do the needful. We also note that the reference to Larger Bench’s decision in the case of M/s. Nizam Sugar Factory v. Commissioner of Central Excise, reported in 1999 (114) E.L.T. 429 (Tri. – LB) by the adjudicating authority is not relevant, inasmuch as the issue before the Larger Bench in that case was entirely different. The larger Bench was considering the question of invocation of longer period, where during the relevant period there was admittedly suppression, which came to the notice of the Revenue subsequently and as to whether in such situation, subsequent knowledge on the part of the Revenue would curtail down the longer period of five years otherwise available to the department. As such, we find that the reliance on the said decision is not appropriate.
8. In view of the foregoing, appellants succeed on merits as also on limitation. Accordingly, we set aside the confirmation of demand of duty as also imposition of personal penalties upon both the appellants. In a nutshell, both the appeals are allowed with consequential relief to the appellants.
(Pronounced in Court on 12-7-2005)