Tubular Plate Lead Acid Batteries are an Integral Part of a Solar Power Generating System, eligible for Excise Duty Exemption: CESTAT [Read Order]

In a recent decision the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that tubular plate lead acid batteries are an integral part of solar power generating system and hence is eligible for excise duty exemption.

The appellant M/s Racily Udyog, is engaged in the business of manufacturing Tubular Plate Lead Acid Batteries falling under Tariff Heading 85072000 of the First Schedule to the Central Excise Tariff Act 1985, since April 2005. The appellant claimed that these batteries are specifically designed for use in solar photovoltaic modules/ systems, to store the electricity generated by solar cells and are an integral part of the photovoltaic module.

The appellant cleared the said batteries without payment of excise duty in terms of Sl. No. 237 (Read with List 9) of Notification No. 6/2002-CE dated 01.03.2002 and Sl. No. 84 (read with List 5) of Notification No. 6/2006-CE dated 01.03.2006, which exempted non-conventional energy systems specified in Lists 9 and 5 respectively.

The appellant submitted that such batteries qualify as integral/ essential component of the solar photovoltaic devices (PV devices). The Appellant further submitted that inasmuch as these batteries are essential components of the Solar Power Generating System, they would quality as ‘non-renewable energy device’ per se which is eligible for exemption.

In the present case, Exemption is provided to Solar Power Generating Systems. The appellant manufactured ‘Batteries’ and supplied the same to the two manufacturers of Solar Power Generating Systems. The expert opinions submitted by the appellant clearly indicate that they are specially made Batteries to store electricity generated by solar cells and an integral part of the solar Photovoltaic Module.

The Bench of P. K. Choudhary, Member (Judicial) and K. Anpazhakan, Member (Technical) observed that “The ‘Batteries’ manufactured by the appellant, which are an integral part of the Solar Power Generating System, are eligible for the benefit of exemption Notification 6/2002 dated 01/03/2002 as amended. Hence, the demand confirmed in the order is not sustainable. We hold that the ‘Batteries’ manufactured by the Appellant are eligible for the benefit of exemption Notification 6/2002 dated 01/03/2002 as amended.”

To Read the full text of the Order CLICK HERE

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