2026-VIL-1652-CESTAT-CHE-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Exemption to Dual Fuel Burner System supplied for a biomass gasification project as non-conventional energy device/system under Sl. No. 332 of Notification No. 12/2012-CE dated 17.03.2012 - Appellant cleared Dual Fuel Burner Systems and allied equipment to a project integrator without payment of duty claiming exemption under the said notification - Department viewed the goods as mere parts and accessories not covered by the notification - Whether the impugned goods cleared are eligible for exemption under Sl. No. 332 of Notification No. 12/2012-CE as non-conventional energy devices/systems specified in List 8 - HELD - The purchase order specifically described the supply as a Dual Fuel Burner System comprising numerous integrated components constituting a complete system and not isolated spare parts supplied independently, specially designed to utilise bio-gas generated by a biomass gasification plant and convert the same into usable heat energy - Where components are supplied together as an integrated system designed for a specific non-conventional energy application, the exemption cannot be denied by artificially disaggregating the system into individual parts. The goods should not be examined item by item and classified merely as valves, blowers, burners or regulators, as such an approach ignores commercial reality and the manner in which the goods were conceived, manufactured, supplied and installed - The amendment inserting Sl. No. 332A with effect from 11.07.2014, extending exemption to specified parts, is irrelevant once it is found that the goods supplied constituted a complete burner system and not mere parts - The documentary evidence established that the items formed constituent elements of a single integrated system intended to convert bio-gas into usable thermal energy - The functional role performed by the system within the biomass gasification project, and not the fact that the system comprises multiple components, is the determinative factor for eligibility to exemption - The impugned goods satisfy the description of a non-conventional energy device specified in List 8 and are entitled to exemption - Denial of exemption is unsustainable and set side – The appeal is allowed - Limitation - Invocation of extended - Whether the demand of duty, interest and penalty is sustainable on the ground of limitation - HELD - The clearances covered under the relevant invoices were initially omitted from the ER-1 return, but the appellant, by letter addressed to the jurisdictional Superintendent shortly thereafter and well before initiation of any investigation, voluntarily brought this omission to the notice and requested inclusion of the clearances as exempted clearances under the notification - Such conduct is wholly inconsistent with any allegation of suppression, wilful misstatement or intent to evade duty - The dispute essentially concerns the interpretation and applicability of the exemption notification to the goods in question - The extended period cannot be invoked merely on account of non-payment of duty or a dispute regarding interpretation of law in the absence of deliberate suppression with intent to evade duty. The demand is barred by limitation.
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