Custom, Excise & Service Tax Tribunal
Gammon India Limited vs Commissioner Of Central Tax, Bengaluru ... on 9 January, 2026
Central Excise Appeal No. E/20222/2018
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
BANGALORE
REGIONAL BENCH - COURT NO. 2
Excise Appeal No. 20222 of 2018
(Arising out of Order-in-Appeal No. 473-474/2017 CT dated 27.11.2017 passed by the
Commissioner of Central Tax (Appeals-II), Bangalore)
Gammon India Limited
Gamon House, Veer Savarkar Marg., P.O., Box.
No. 9129, Prabhadevi, Mumbai,
Maharashtra - 40002 ........Appellant
VERSUS
Commissioner of Central Tax,
Bangalore North west
2nd Floor, South Wing, BMTC Complex,
Shivaji Nagar, Bengaluru,
Karnataka - 560051 ............Respondent
Appearance:
Mr. Prakash Shah, Senior Advocate & Mr. Mihir Mehta, Advocate for the Appellant Mr. Rajashekar. B.N.N, Authorised Representative (AR) for the Revenue Coram:
Hon'ble Mr. P.A. Augustian, Member (Judicial) Hon'ble Mr. Pullela Nageswara Rao, Member (Technical) Final Order No. 20026 /2026 Date of Hearing: 12.09.2025 Date of Decision: 09.01.2026 Per: Pullela Nageswara Rao This appeal was filed against Order-in-Appeal No. 473-474/2017 CT dated 27.11.2017 passed by the Commissioner of Central Tax (Appeals-II), Bangalore.Page 1 of 11
Central Excise Appeal No. E/20222/2018
2. The issue in the present appeal is whether the Appellant can be considered as the manufacturer of the goods, whether the goods are classifiable as 'Ready Mix Concrete (RMC)' and are liable to duty.
3. The brief facts are the Appellant is engaged in construction of commercial, industrial and infrastructure projects. The Appellant was awarded with the following 2(two) road projects by National Highway Authority of India (NHAI) in the State of Karnataka in September 2008.
(a) Western Transport Corridor-NH4 Project Package IV-
Rehabilitation and upgradation of Chitra Durga-Harihar (Km 207 to 284) ("Package IV")
(b) Western Transport Corridor-NH4 Project Package V- Rehabilitation and Upgradation of Harihar-Haveri (Km 284 to 304) ("Package V")
4. The appellant through agreements dated 21.07.2009 and 17.04.2010, sub-contracted the aforesaid Package-IV and Package-V projects to M/s. Deepika Infrastructure Private Ltd., ("DIPL") on back- to-back basis.
5. M/s. Deepika Infrastructure Private Ltd. ("DIPL") for the execution of the project installed 2(two) batching plants at a fixed place located on the stretch of the two construction sites i.e. Near Kundawada, Davangere (264 km stone) and Hanumanmatti, Asundi village (311km stone) to manufacture 'concrete mix' falling under Chapter 38 of the First Schedule to Central Excise Tariff Act, 1985 within the vicinity of the road construction under the aforesaid 2(two) packages.
6. The Department alleging that the Appellant had manufactured 'Ready Mix Concrete (RMC)' falling under Chapter Heading (CETH) 38245010 of first schedule of the Central Tariff Act, 1985 with effect from 01.03.2011 without payment of excise duty, proceedings were initiated and show cause notice was issued on 03.03.2014 for the period from March 2011 to January 2014 and Adjudication authority as per the Page 2 of 11 Central Excise Appeal No. E/20222/2018 Order-in-Original dated 15.03.2016 confirmed the demand of excise duty with interest and also imposed penalties on the Appellant as well as Project Manager of the Appellant. Aggrieved by said order, appeals were filed before the Commissioner (Appeals) and Commissioner (Appeals) upheld the finding of the Adjudication authority against the Appellant herein and dropped the proceedings against the Project Manager. Aggrieved by said order, the present appeal was filed.
7. The Sr. Learned Counsel for the Appellant during the hearing submits that the goods manufactured in the said plant is not 'Ready mix concrete (RMC)', but it is 'concrete mix' falling under Chapter 38 of the first schedule to the Central Excise Tariff Act, 1985 (CETA, 1985). Appellant had made detailed submission and draws our attention to Circular No. 368/1/98 dated 06.09.98, wherein it is clarified that for manufacturing 'Ready mix concrete (RMC)', integrated and automated plant is required whereas the batching plant installed in the premises is mechanically and manually operated concrete plant. The Sr. Learned Counsel further submits that in the concrete plant; cement, aggregates and sand are fed manually in the mechanical concrete mixer, water is added from nearby water tank and mixing is controlled through a panel board. Sr. Learned Counsel further submits that the Commissioner (Appeals) has failed to consider the above submissions and has proceeded under the assumption that the goods manufactured by the Appellant is 'Ready Mix Concrete (RMC)'. Sr. Learned Counsel further submits that though the Appellate authority relied on the judgment of the Hon'ble Supreme Court in the case of Larsen & Toubro Ltd. Vs. Commissioner of Central Excise, Hyderabad, [2015 (324) ELT 646 (S.C.)], the said judgment has no application in the facts of the present case. The issue in the said case was whether the 'Ready mix concrete (RMC)' manufactured at the site of construction was exempt under Notification No. 12/2012-CE dated 17.02.2012. However, in the present case, it is the specific submission of the Appellant that the goods manufactured are not 'Ready Mix Concrete (RMC)'. Further as regards the demand confirmed on the Appellant, Sr. Learned Counsel submits that Appellant is not the manufacturer of the goods and even if Page 3 of 11 Central Excise Appeal No. E/20222/2018 the goods produced in the plant is 'Ready Mix Concrete (RMC)' which attracts excise duty as alleged, the duty can be demanded only from the M/s. DIPL, since the Appellant had sub-contracted the entire work including mixing of concrete to M/s. DIPL.
8. Sr. Learned Counsel also draws our attention to the statement of the Project Manager Shri. S.S.N Murthy, where he specifically stated that Appellant is not manufacturing the goods and also draws our attention to sub-contract agreement which has clearly made M/s. DIPL responsible for all plant and machinery at the site for construction of the road and DIPL was responsible for the entire construction work as per main contract and sub-contract agreements. In this regard Sr. Learned Counsel draws our attention to the decision of the Tribunal in the matter of M/s. Voltas Ltd. Vs. CCE, Guntur-[2002 (139) ELT 223-Tri-Chennai] and CCE, Patna Vs. Som Datta Builders Pvt. Ltd.-[2025 (8) TMI 1137]. The Sr. Learned Counsel further submits that even if it is held that the Appellant is the manufacturer of the goods and goods are classifiable under 'Ready Mix Concrete (RMC), such goods are exempted from payment of excise duty under Notification No. 12/2012- CE dated 17.03.2012. In this regard, Sr. Learned Counsel draws our attention to the Notification and submits that admittedly both batching plants were within the visibility of the construction site from where the 'concrete mix' was transported to the site where the actual construction work was going on. However, the Adjudicating authority/Appellate authority erred in holding that the 'concrete mix' was not manufactured at 'site' as in the present case the entire stretch of road under construction has to be considered as 'site'.
9. The Sr. Learned Counsel further submits that the demand is also unsustainable by invoking the extended period of limitation, since the ingredients to invoke Section 11A(4) of the Central Excise Act, 1944 are not available in the show cause notice (SCN) and the impugned order. Further submits that the issue regarding classification and excise duty liability on 'Ready Mix Concrete (RMC) was subject of dispute at the relevant time and the issue attained finality as per the judgment of Page 4 of 11 Central Excise Appeal No. E/20222/2018 Hon'ble Supreme Court in the matter of M/s. Larsen and Toubro Ltd., (supra). Further there is no allegation or admissible evidence to allege any positive act or suppression on the part of the Appellant with an intent to evade payment of duty. Thus, it is settled law that extended period cannot be invoked mainly because there is nonpayment of duty and especially in the case where the issue is with regard to interpretation of Notification which is purely legal in nature and when during the period of dispute there were decisions in favour of the Appellant. In this regard, Sr. Learned Counsel relied on the following decisions;
i. Continental Foundation Joint Venture Vs. Commissioner of Central Excise, Chandigarh-[2007 (216) E.L.T. 0177 (SC)] ii. M/s Shapoorji Pallonji & Company Pvt. Ltd. Vs. Commissioner of GST & Central Excise, Madurai-[2023 (6) TMI 695 - CESTAT CHENNAI] iii. M/s Gaursons Promoters Pvt. Ltd. Vs. Commissioner, Central Excise, Noida-II,-[2019 (2) TMI 1026 CESTAT ALLAHABAD].
10. The Learned Authorised Representative (AR) reiterated the finding in the impugned order and submits that as per the impugned order and as per the statement recorded from the Project Manager on 19.02.2013, the 'concrete mix' is not manufactured at the site of construction for use in construction work but the same was manufactured at their plants located far away from construction site and then transported by transit mixer to such site. Further submits that Central Board of Excise & Customs (CBEC) vide Circular No.368/1/98- CX dated 06.01.1998 has clarified that 'concrete mix' implies the conventional method of concrete production conforming to the ISI Standard IS Standard 456-1978 (old Indian Standard code for "Plain Reinforced Concrete') which was produced and used at the site of construction and that it is this 'concrete mix', manufactured at the site Page 5 of 11 Central Excise Appeal No. E/20222/2018 of construction which is fully exempt vide Notification No. 04/1997-CE dated 01.03.1997. Further, it is clarified that ready mix concrete or pre- mixed concrete, by its very nature, cannot be manufactured at the site of construction and is brought from the factory of manufacturer for use in construction. 'Ready mix concrete (RMC)' is an excisable product classifiable under Central Excise Tariff Heading (CETH) 3824.20 chargeable to duty at the appropriate rate whereas "Concrete Mix"
manufactured at the site of construction for use in construction at such site, is fully exempt vide Notification No.04/97-CE dated 01.03.1997.
11. Heard both sides and perused the records.
12. As regards the first issue whether the goods manufactured by the Appellant amounts to manufacture of 'Ready Mix Concrete (RMC)', we find that issue was considered by this Tribunal in the matter of BG Shirke Construction Technology Pvt Ltd. Vs. CCT, Bangalore West - [2019 (1) TMI 498 CESTAT, BANGALORE], wherein it is held that;
"5. After considering the submissions of both the parties and perusal of the material on record, we find that as per the mahazar dated 05.03.2014 prepared on the spot in the presence of witnesses, it is clearly mentioned that the production of concrete mixing activity was in progress at the site of the project. Further we find that the original authority after considering the material on record and the statement of T.R. Umaprasad wherein he has fairly stated that the concrete was produced at their batching plant at the Kengeri site and used for construction of the said project. Further we find that the show-cause notice which has proposed to classify the impugned goods as RMC is without any evidence and basis. Further we find that as per the Board's Circular 237/71/96-CX dated 12.08.2016 wherein the Board has clarified about the classification of RMC and its excisability has observed that RMC plant consists of stone crushers, conveyors, vibrator screen and a sand mill and further a central batching plant is also installed in which aggregates are weighed, batched Page 6 of 11 Central Excise Appeal No. E/20222/2018 by electrical controls and limit switches and thereafter water is fed through flow meters after subjecting such water to chemical analysis and all the components are mixed to form RMC. Further we find that in the show-cause notice there is no allegation that process adopted by the appellant to manufacture the impugned goods is similar to the process required for manufacturing RMC and the Department has never disputed or challenged or considered the manufacturing process adopted by the appellant. Further we find that the Hon'ble Apex Court in the case of Larsen & Toubro cited supra has held that it is only the process of preparing the concrete mix which would determine as to whether the product could be termed as concrete mix or it would be treated as RMC. Whereas in the present case the show-cause notice never considered the process of preparing concrete mix to allege that the impugned goods is RMC and the Commissioner (Appeals) has completely ignored the allegation in the show-cause notice and has proceeded on a completely different tangent. Further we find that vide Notification No. 12/2016-CE dated 01.03.2016, Sl. No. 144 of Notification No. 12/2012-CE dated 17.03.2012 has been substituted to extend the benefit of exemption to "Ready mix concrete as well and it is well settled that when any substitute is made by way of amendment it is applicable, retrospectively. In support of this we may refer to the case of Government of India Vs. Indian Tobacco Association - 2005 (187) E.L.T. 162 (SC) wherein while dealing with the exemption Notification which was issued by way of substitution the Apex Court has held as under:
"15. The word 'substitute' ordinarily would mean 'to put (one) in place of another', or 'to replace'. In Black's Law Dictionary, Fifty Edition, at page 1281, the word 'substitute' has been defined to mean 'To put in the place of another person or thing' or 'to exchange'. In Collins English Dictionary, the word 'substitute' has been defined to mean 'to serve or cause to serve in place of another person or Page 7 of 11 Central Excise Appeal No. E/20222/2018 thing; 'to replace (an atom or group in a molecule) with (another atom or group); or 'a person or thing that serves in place of another, such as a player in a game who takes the place of an injured colleague'.
16. By reason of the aforementioned amendment no substantive right has been taken away nor any penal consequence has been imposed. Only an obvious mistake was sought to be removed thereby.
17. There cannot furthermore be any doubt whatsoever that when a person is held to be eligible to obtain the benefits of an exemption notification, the same should be liberally construed"
13. Further, we find that Circular No. 368/1/98-CX dated 06.01.1998, clarified that;
"6. The matter has been examined, and concrete mix implies the conventional method of concrete production conforming to the ISI Standard 456-1978, which is produced and used at the site of construction. It is this concrete mixture, manufactured at the site of construction which is fully exempt vide Notification No. 4/97- C.E., dated 1-3-1997 (Sl. No. 51). It is thus clarified that ready mix concrete or pre-mixed concrete, by its very nature, cannot be manufactured at the site of construction and is brought from the factory of manufacturer for use in construction."
14. Thus in the present appeal, we find that inspite of giving clear clarification vide Circular No.368/1/98-CX dated 06.01.1998, no attempt was made to verify the process of preparing 'concrete mix' to allege that the impugned goods are 'Ready Mix Concrete (RMC)' and the Commissioner (Appeals) has completely ignored the submissions made by the appellant and has proceeded on a completely unrelated discussion and consequent findings .
Page 8 of 11Central Excise Appeal No. E/20222/2018
15. In this regard we find that to decide whether the goods manufactured by the sub-contractor of the appellant is 'concrete mix' or 'ready mix concrete (RMC)' we need to understand the difference between both these products. The relevant comparison is as follows;
A. IS 456-1978 is an Indian Standard code of practice for plain and reinforced concrete. It provides guidelines for the design, construction, and testing of concrete structures. The code covers various aspects, including materials, mix design, reinforcement, and structural design.
B. IS 4926:2003 is an ISI standard for Ready Mix Concrete (RMC) in India. This standard outlines the requirements for production, transportation, and quality control of RMC.
The key features of IS 4926:2003 are;
- Scope: Defines the requirements for production and supply of RMC, excluding placement, compaction, curing, or protection of concrete after delivery.
- Materials: Specifies the requirements for cement, aggregates, water, and admixtures used in RMC.
- Quality Control: Outlines the procedures for testing and inspection of materials, concrete production, and transportation.
- Testing Frequencies: Defines the minimum testing frequencies for aggregates, cement, and concrete.
- Production and Delivery: Specifies the requirements for batching, mixing, and transporting RMC.
Important Requirements;
- Cement Content: Minimum cement content should be specified, and it should be in accordance with the contract or design requirements.
Page 9 of 11Central Excise Appeal No. E/20222/2018
- Water-Cement Ratio: The water-cement ratio should be controlled to ensure the desired workability and strength.
- Aggregates: Aggregates should conform to IS 383, and their testing frequencies should be as specified in Annex B of IS 4926:2003.
- Quality Control Tests: Regular quality control tests should be conducted on fresh and hardened concrete, including slump tests, compressive strength tests, and density tests.
Certification and Compliance;
- ISI Certification: RMC plants can obtain ISI certification by complying with the requirements of IS 4926:2003 and undergoing regular inspections and testing.
- Compliance with Standards: RMC producers should ensure compliance with all relevant Indian Standards, including IS 456 and IS 10262.
16. Further we find that vide Notification No. 12/2016-CE dated 01.03.2016, Sl. No. 144 of Notification No. 12/2012-CE dated 17.03.2012 has been substituted to extend the benefit of exemption to 'Ready mix concrete' as well. Further no attempt was made by the respondent to verify the contracts entered by Appellant with National Highway Authority of India (NHAI) in September 2008 to execute the 2(two) projects and the sub-contract agreement dated 21.07.2009 and 17.04.2010 by Appellant with sub-contractor M/s. Deepika Infratech Pvt Ltd (DIPL) to confirm that the contracts are for manufacture of 'Ready Mix Concrete (RMC)' as per ISI standard, IS 4926:2003 or 'Concrete Mix' as per ISI standard, IS 456-1978 for the projects. Thus, in the absence of any admissible evidence, duty cannot be confirmed by presuming that the Appellant had manufactured 'Ready mix concrete (RMC)' and not 'concrete mix'. Therefore, in the absence of any evidence to the effect that the sub-contractor has manufactured 'Ready Mix Concrete (RMC) as per the detailed features, requirements, Page 10 of 11 Central Excise Appeal No. E/20222/2018 compliances discussed at Para 15, supra, the impugned order confirming that the impugned product / goods as 'Ready mix concrete (RMC) cannot be sustained.
17. In view of the above discussion, the impugned order is unsustainable and liable to be set aside.
17. Accordingly, impugned order is set aside, and Appeal is allowed with consequential relief, if any, in accordance with law.
(Order pronounced in Open Court on 09.01.2026) (P.A Augustian) Member (Judicial) (Pullela Nageswara Rao) Member (Technical) Sasi Page 11 of 11