Custom, Excise & Service Tax Tribunal
M/S. Aeon S Construction Products Ltd vs Commissioner Of Central on 15 June, 2009
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
E/804 & 805/07/MAS
[Arising out of Order-in-Appeal Nos.39/2007 (M-II) dt.31.8.07 and 40/2007 (M-II) dt.31.8.07 passed by the Commissioner of Central Excise (Appeals), Chennai]
For approval and signature:
Honbe Ms. Jyoti Balasundaram, Vice President
Honble Mr. P. Karthikeyan, Member (Technical)
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? :
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? :
3. Whether the Members wish to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
M/s. Aeons Construction Products Ltd.
Appellants
Versus
Commissioner of Central
Excise, Chennai
Respondent
Appearance:
Sh. N. Viswanathan, Adv.
Sh. V.V. Hariharan, JCDR For the Appellants For the Respondent CORAM:
Ms. Jyoti Balasundaram, Vice President Mr. P. Karthikeyan, Member (Technical) Date of hearing :15.6.2009 Date of decision: 15.6.2009 Final Order No.____________ Per JYOTI BALASUNDARAM Both appeals involved common issues and hence heard together and disposed of by this common order.
2. Brief facts of the case are that the assesses manufactured solid concrete blocks and hollow light weight concrete blocks falling under CETA sub-heading 6807.90 attracting excise duty at the rate of 16% ad valorem. They also availed Cenvat credit on the inputs used in the manufacture of the final product and concessional rate of duty under Notification No.10/03-CE dt. 1.3.03 in terms of Sl. No.23 of the table thereto in respect of clearances of paver/pavement blocks since the solid blocks manufactured by them were pavement blocks used in floors of driveways, petrol pumps, flooring of storing yards etc. The Revenue was of the view that they could not be treated as building blocks eligible to concessional rate of duty of 8%. Since the assesses availed concessional rate of duty by wrongly claiming the benefit of the notification, Show Cause Notices dated 1.4.2004 proposing recovery of differential duty of Rs.21,15,601/- for the period March 2003 to December 2003, on 1.2.2005 proposing recovery of Rs.20,69,906/- for the period June 2004 to October 2004 and 16.11.2005 proposing recovery of Rs.19,97,772/- (excise duty) plus Rs.39,839/- (education cess) covering the period November 2004 to June 2005, were issued. Notices also proposed recovery of interest and imposition of penalty. The first two notices were adjudicated by Order-in-Original No.30/2005 dated 29.7.05, by extending the benefit of the notification vacating the proceedings initiated thereunder. The demand raised in three show cause notices was dropped by Order-in-Appeal No.4/2006 dated 27.2.2006. The Revenue preferred appeals before the Commissioner (Appeals) who by the Order-in-Appeal No.39 & 40/07 dated 31.8.07 upheld the contention of the Revenue that the paver blocks manufactured and cleared by the respondents were not eligible to the benefit of concessional rate of duty under Notification No.10/2003 and confirmed duty demand raised in the Show Cause Notices and also imposed a penalty of Rs.5 lakhs in the orders adjudicating SCN dt.1.4.2004 and 1.2.2005 and penalty of Rs.4,50,000/- in the order adjudicating Show Cause Notice dated 16.11.05. Hence the appeals filed by the assesses.
3. We have heard both sides. We find that the issue in dispute in the appeals namely eligibility to the benefit of concessional rate of duty 8% under Sl.No.23 of the table to the Notification No.10/2003 to paver blocks manufactured and cleared during the periods in dispute stands settled by Tribunals Final Order No.A.129 130/2009/EB/C-II dated 5.3.09 in Appeal No.E/1097 & 1158/07 in the case of CCE, Thane II Vs. Conwood Pre-fab Ltd. & Super Tiles & Marbles Pvt Ltd the relevant extracts from the Tribunals decision are reproduced below:-
7. We have given careful consideration to the submissions including the written submissions filed by both sides. It is not in dispute that the paver blocks manufactured and cleared by the respondents during the material period are classifiable as articles of concrete under heading 6810 in the 8 digit system of classification of excisable goods. The issue to be considered is whether the paver blocks could be classified as building blocks under SH 6810 1190 as claimed by the assesses or they should be classified under the residuary sub-heading 6810 99 90 as claimed by the Revenue. The ld. JCDR has heavily relied on IS specifications in his bid to show that paver blocks which are predominantly used for paving open space such as footpath, road, courtyard of building, etc is different from blocks and bricks which are used for constructing a building as vertical structure. But we are unable to accept any IS specifications, which are meant for ensuring quality control and cannot be used as an aid in classification of goods as held by the apex Court in the case of Indian Aluminium Cables Ltd. (supra). We also observe that the Honble Supreme Court in the case of Wood Craft Products Limited (supra) held that Explanatory Notes to HSN should be preferred to ISI Glossary in the matter of classification of excisable goods under the Central Excise Tariff Act unless different intention was indicated in the Tariff itself. We have not come across any reference to IS specification under heading 6810 or in any Chapter Note or Section Note relating thereto. On the above point, the learned counsel has also usefully cited the decision of the Tribunal in the case of Wipro Limited, Indore Wire Co. Ltd (supra) etc. We have also not come across any end-use having been specified for the goods falling under Chapter 68 of the CETA Schedule, in the said Schedule or in any of the Notifications. In the case of Dunlop (India) Limited & MRF Ltd (supra) it was held by the Supreme Court that, where there was no reference to use of the goods in Tariff entry, its classification under such entry could not be made on the basis of end-use which was absolutely irrelevant. In the case of Perfect Sealing Systems Pvt Ltd cited by JCDR, certain goods sold by the assessee to another company and predominantly used by the latter in stationary type of industrial vehicles were classified under Item 68 on the basis of the predominant use of the goods. In that case, the contention of the Revenue that as the same goods could interchangeably be put to vehicular type of applications they were appropriately classifiable under Tariff Item 34A was rejected. Obvisouly, the classification dispute in that dispute in that case rested on the end-use of the goods unlike in the instant case. Therefore, the reliance placed by the JCDR on Perfect Sealing Systems (supra) does not advance the Revenues case any further. We further observe that the term building used to qualify blocks under SH 6810 11 of the Tariff Schedule has not been defined anywhere in the Central Excise Tariff Act or the Schedule thereto.
8. In the above scenario, one has got to ascertain as to how building blocks are understood in the common parlance. According to the assessees, the common people understand these goods to be blocks used for building activity. On the contrary, it is the argument of the appellant that building blocks are blocks used in a building as vertical structure. This view of the Revenue reverberated in Court by the learned JCDR does not appear to be in keeping with how the common populace understand similar expressions such as building materials, sewing machine, cooking gas, cutting board, drinking water and the like. It cannot be in dispute that a sewing machine is a machine used for sewing, that cooking gas is a gas used for cooking, that cutting board is a board used for cutting, that drinking water is water used for drinking. Building materials (cement, bricks, steel wires etc) are materials used for building structures. These structures, in our view, need not be vertical structures only. They can be multi-dimensional some may be vertical like the buildings visualized by JCDR, some can be horizontal like footpaths, courtyards of buildings etc some can even be subterraneous like water tanks etc. Materials used for constructing all these structures are known as building materials in common parlance. When the common man understands a sewing machine to be a machine used for sewing, cooking gas to be a gas used for cooking, cutting board to be a board used for cutting, it would be rather unconventional to hold that he does not count building blocks/bricks as materials used for building structures.
9. In the above view of the matter, we hold that the paver blocks in question, used for paving roads, footpaths, parking areas and other open spaces like courtyards of buildings, should be classified as building blocks und SH 6810 11 90, which entry is specific enough to cover building blocks. Therefore, there is no question of classifying paver blocks under the residuary entry (SH 6810 99 90) suggested by the Revenue.
10. In view of the above classification, the assessees are entitled to the benefit of concessional rate of duty under the relevant Notifications as rightly held by the lower appellate authority. Both the appeals of the Revenue are dismissed.
4. The goods in question in the present case are identical to those under consideration by the Tribunal Conwood case (supra), and hence the ratio of the Conwood Pre-fab Ltd decision applies squarely to the present case and following the same, we set aside the impugned orders and allow these appeals.
(Dictated and pronounced in open court)
(P. KARTHIKEYAN) (JYOTI BALASUNDARAM)
MEMBER (T) VICE PRESIDENT
Swamy
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