Import of WTG Engineering Drawings Not Taxable as Design Services

Centax Editorial Board

May 22, 2026

• 3 min. read

Case Details: Suzlon Energy Ltd. vs. Commissioner of Custom, Excise and Service Tax, Pune-III (2026) 38 Centax 343 (Tri.-Bom)

Judiciary and Counsel Details

- S/Shri S.K. Mohanty, Member (J) & M.M. Parthiban, Member (T)
- S/Shri V. Sridharan, Sr. Advocate a/w Vinay Jain & Aniket Barve, Advocates, for the Appellant.
- Shri Manish Mohan, (Commissioner), Authorized Representative, for the Respondent.

Facts of the Case

The assessee imported engineering design and drawings of various models from its sister companies for use in the manufacture of wind turbine generator (WTG) in India. The agreements entered into between the assessee and the foreign group companies provided that the products in question would be sold by the foreign entity to the assessee in India. The department treated the transaction as taxable under the category of ‘design services’ under Section 65(36b) read with Section 65(105)(zzzzd) of the Finance Act, 1994. The assessee contended that the transaction represented a transfer of rights in engineering drawings and designs for use in Indian territory and that the relationship between the parties was that of seller and buyer and not service provider and service recipient. The matter was accordingly placed before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

CESTAT Held

The CESTAT held that the Engineering Design and Drawings imported from the sister companies were to be used exclusively for the manufacture of Wind Turbine Generator (WTG) in India. It was observed that the agreements clearly established a seller-buyer relationship between the foreign entities and the assessee and not a service provider-service recipient relationship. Further, the ownership of the engineering drawings and designs continued to vest with the group companies and only rights for use in Indian territory were transferred to the assessee. Accordingly, the transaction arising from the agreements could not be categorized as taxable service under the head ‘design services’ under Section 65(36b) read with Section 65(105)(zzzzd) of the Finance Act, 1994.

List of Cases Cited

AAK India Pvt. Ltd. v. Commissioner — Final Order No. A/85716/2025, dated 1-4-2025 by Bombay High Court — Referred [Para 2.3]
Aban Loyd Chiles Offshore Ltd. v. Commissioner — 2006 (200) E.L.T. 370 (S.C.) — Relied on [Para 7.3]
Associated Cement Companies Ltd. v. Commissioner — 2001 (128) E.L.T. 21 (S.C.) — Referred [Para 2.3]
Bharat Aluminum Company Ltd. v. Commissioner — 2017-TIOL-1983-CESTAT-DEL — Referred [Para 2.3]
Commissioner v. Bright Brothers Ltd. — 2015 (322) E.L.T. 110 (Bom.) — Referred [Para 2.3]
Commissioner v. Kirloskar Brothers Ltd. — 2016 (46) S.T.R. 702 (Tribunal) — Referred [Para 2.3]
Commissioner v. Larsen & Toubro Ltd. — 2015 (39) S.T.R. 913 (S.C.) — Referred [Para 2.3]
Commissioner v. Microtek Forgins — 2016 (341) E.L.T. 218 (P & H) — Referred [Para 2.3]
Commissioner v. Northern Operating Systems Pvt. Ltd. — 2022 (61) G.S.T.L. 129 (S.C.) — Referred [Para 2.3]
Commissioner v. Quick Heal Technologies Ltd. — 2022 (63) G.S.T.L. 385 (S.C.) — Referred [Para 2.3]
Commissioner v. Reliance Industries Ltd. — 2023 (385) E.L.T. 481 (S.C.) = (2023) 8 Centax 96 (S.C.) — Referred [Para 2.3]
Commissioner v. Suzlon Energy Ltd. — 2023 (73) G.S.T.L. 298 (S.C.) = (2023) 5 Centax 150 (S.C.) — Referred [Paras 1.7, 2, 8.1]
Cosmic Dye Chemical v. Collector — 1995 (75) E.L.T. 721 (S.C.) — Relied on [Para 7.2]
HPL Electric and Power Pvt. Ltd. v. Commissioner — 2018 (10) TMI 961-CESTAT Chandigarh — Referred [Para 2.3]
Mitsui & Co. Ltd. v. Commissioner — 2012 (28) S.T.R. 491 (Tribunal) — Referred [Para 2.3]
Mitsui and Co. Ltd. v. Commissioner — 2010 (18) S.T.R. 632 (Tribunal) — Referred [Para 2.3]
Narinder S. Chadda v. Municipal Corporation of Greater Mumbai — (2014) 15 SCC 689 — Referred [Para 2.3]
Nizam Sugar Factory v. Collector — 2008 (9) S.T.R. 314 (S.C.) = 2008 (9) S.T.R. 314 (S.C.) — Referred [Para 2.3]
Pushpam Pharmaceuticals Company v. Collector — 1995 (78) E.L.T. 401 (S.C.) — Relied on [Para 7.1]
Solitz Corporation v. Commissioner — 2009 (14) S.T.R. 642 (Tribunal) — Referred [Paras 2.3, 8.1]
Star Battery Ltd. v. Commissioner — 2024 (9) TMI 835-CESTAT Kolkata — Referred [Para 2.3]
Suzlon Energy Ltd. v. Commissioner — 2019 (21) G.S.T.L. 160 (Tribunal) — Referred [Paras 1.6, 1.7, 8.1, 8.3]
V.D. M. Rm. M. Rm. Muthiah Chettia v. Commissioner of Income Tax — (1969) 74 ITR 183 (SC) — Referred [Para 2.3]

List of Departmental Clarification Cited

C.B.E. & C. Letter F. No. B2/8/2004-TRU, dated 10-9-2004 [Para 5.7]
C.B.E. & C. Letter D.O.F. No. 334/1/2007-TRU, dated 28-2-2007 (Extracts) [Paras 5.2, 5.4]
C.B.E. & C. Circular No. 96/7/2007-S.T., dated 23-8-2007 [Para 1.5]