Custom, Excise & Service Tax Tribunal
M/S. Nicco Corporation Ltd vs Commr. Of Central Excise, Kolkata Iii on 20 March, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, EAST REGIONAL BENCH : KOLKATA
S. P. No. 279/07
&
Ex. Appeal No .320/07
(Arising out of Order-in-Original No. 35-40/COMMR./CE/KOL-III/2006-07 dated 28.02.2007 passed by the Commissioner of Central Excise, Kolkata III).
M/s. NICCO Corporation Ltd., APPELLANT
VERSUS
Commr. of Central Excise, Kolkata III RESPONDENT
APPEARANCE SHRI A.D. RAY, ADVOCATE, for the Appellant SHRI Y. S. LONI, JDR, for the respondent CORAM:
SHRI P. KARTHIKEYAN, HONBLE TECHNICAL MEMBER SHRI D. N. PANDA, HONBLE JUDICIAL MEMBER DATE OF HEARING & DECISION : 20. 03. 2008 ORDER NO/2008 Per Shri P. Karthikeyan:
The applicant M/s. Nicco Corporation Ltd., (Nicco) manufactured and cleared cables for use in wind mills during the period June, 2004 to March, 2006. The appellant had cleared the cables availing exemption extended to inputs under Sl.No. 237, List 9, Sl. No. 13 of Notification No. 6/2002-CE dated 01.03.2002. The said entry covered window operated electricity generator, its components and parts thereof. After due process of law, the Commissioner, Central Excise held that the impugned product was only cable and not a part of wind mill, eligible for the exemption. She confirmed a total amount of Rs. 81,16,987/- being the duty due including Education Cess demanded, interest thereon and imposed equal amount of penalty on Nicco.
2. Before us the Ld. Counsel for the applicant submits that the item cleared is a specific part of wind mill without which the wind mill cannot operate. The item is energy connector used to connect rectifier and inverter which together form Turbine Controller the main component of the wind mill. The energy connector being the part of turbine controller and also part of wind mill, the item was therefore eligible for the exemption under Notification No. 6/02. He also invites our attention to the relevant entry which reads as window operated electricity generator, its component and parts thereof including rotor and wind turbine controller. It is explained that the expression including rotor and wind turbine controller was specifically included by an amendment of the notification and the impugned product being a part of wind turbine controller qualified for exemption as part of wind operated electricity generator. The Ld. Counsel also pleads financial hardship and submits the latest balance sheet for the period ending 31.3.07 which shows an accumulated loss of Rs. 42.32. crores.
3. The Ld. Departmental Representative submits that a similar case was considered by this Bench earlier and vide Stay Order No. S-65/KOL/08 dated 16.01.08 had directed the appellants to make a predeposit of Rs. 10 lakhs where the demand was Rs. 25.88 lakhs. The item considered was a similar cable and the issue considered was its eligibility to the same exemption. He prays that similar predeposit may be ordered. He also submits that the impugned order was passed following the ratio of a decision of the Apex Court in the assessees own case in Nicco Corporation Ltd. Vs. CCE, Calcutta reported in 2006 (203) ELT 362 (S.C.), wherein the order of the Apex Court had held that insulated wires and cables were not parts of wind mill which was complete without electric cables though wind mill may not function without those cables.
4. We have carefully considered the submissions made by both sides. We find from the records that the customers had placed orders on the appellants for purchase of cables. As rightly observed by the Commissioner the impugned item is squarely covered by the tariff description for cables. This product cannot be identified as being unique and for exclusive application in the wind mill. It is nobodys case that a major part of the wind mill or the wind mill itself can function without the subject cables. But then similar was the role and application of the cables considered by the Apex Court in the case law relied on by the Commissioner. The notification considered by the Apex Court had also decided eligibility of the item impugned therein to identical benefit as part of wind mill. From the facts of the case we find that the appellant has not made out a prima facie case against the demand and penalty. However, considering the financial position of the appellant, in a lenient approach, we direct that the appellant shall make a predeposit of Rs. 10 lakhs (Rupees Ten lakhs only) in terms of Section 35 F of the Central Excise Act within six weeks from today and report compliance on 13.05.08. On reporting such compliance, there shall be waiver of predeposit and stay of recovery of the remaining dues as per the impugned order.
(Operative part of the Order was pronounced in the open Court on 20.3.08)
( D. N. PANDA ) ( P. KARTHIKEYAN )
JUDICIAL MEMBER TECHNICAL MEMBER
k.b.
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