No Service Tax on Fabrication of Windmill Parts Covered Under Excise Exemption: CESTAT [Read Order]
Rejecting the Department’s plea for remand, the tribunal concluded that since the goods were exempt from excise duty, they could not attract service tax.
![No Service Tax on Fabrication of Windmill Parts Covered Under Excise Exemption: CESTAT [Read Order]](https://images.taxscan.in/h-upload/2025/06/24/2053664-cestat-ahmadabad-no-service-tax-windmill-excise-exemption-taxscan.webp "No Service Tax on Fabrication of Windmill Parts Covered Under Excise Exemption: CESTAT [Read Order]")
The Ahmedabad Bench of Customs,Excise and Service Tax Appellate Tribunal ( CESTAT ) rules that fabrication of windmill parts, being exempt excisable goods under Notification No. 12/2012-CX, is not liable to service tax.
R & S Fabrication Works,appellant-assessee,carried out fabrication work from 2014-15 to 30th June 2017, making large windmill parts that were sold to M/s. Fedders Lloyds Corporation Ltd. The charges received were only for fabrication, as materials were supplied by the buyer.
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The assessee argued that the items were excisable goods and exempt from service tax under Notification No. 12/2012-CX, which covered components and parts of wind-operated electricity generators, including towers, rotors, and turbine controllers.
To support this, the assessee relied on a CESTAT Chennai ruling in RRB Energy Ltd., which held similar items as exempt, and on a Larger Bench decision in Rakhok Enterprises, which confirmed that parts like anchor rings and load spreading plates were also exempt as components of windmill towers.
The Department, however, sought a remand, stating that the Commissioner (Appeals) had only looked into whether the activity was a service and had not examined the applicability of the exemption or whether the items were covered parts of wind-operated generators.
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The two member bench comprising Somesh Arora (Judicial Member) and R.Bhagya Devi (Technical Member) examined the arguments from both sides and concluded that the fabricated goods were, at the relevant time, excisable in nature but were treated as exempt under Notification No. 12/2012-CX. Since they qualified as exempt excisable goods, the tribunal held that they could not be taxed under service tax. As a result, the appeals were allowed.
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