Custom, Excise & Service Tax Tribunal
Mather & Platt Pums Ltd. vs Commissioner,Central Goods And ... on 1 March, 2023
CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, MUMBAI
REGIONAL BENCH
Excise Appeal No. 1050 of 2012
(Arising out of Order-in-Original No. 9/CEX/Commr/KOP/2012 dated
30.03.2012 passed by the Commissioner of Central Excise, Kolhapur)
M/s. Mather & Platt Pumps Ltd. Appellant
E-25, MIDC, Gokul Shirgaon,
Kolhapur
Vs.
Commissioner of CGST, Kolhapur Respondent
Vasant Plaza, Commercial Complex, Rajaram Road, Bagal Chowk, Kolhapur 416 001.
WITH Excise Appeal No. 85853 of 2014 (Arising out of Order-in-Appeal No. PUN-EXCUS-002-APP-132-13-14 dated 10.12.2013 passed by the Commissioner of Central Excise (Appeals), Pune) M/s. Mather & Platt Pumps Ltd. Appellant E-25, MIDC, Gokul Shirgaon, Kolhapur Vs. Commissioner of CGST, Kolhapur Respondent Vasant Plaza, Commercial Complex, Rajaram Road, Bagal Chowk, Kolhapur 416 001.
AND Excise Appeal No. 86152 of 2015 (Arising out of Order-in-Appeal No. PUN-SVTAX-000-APP-0051-14-15 dated 09.03.2015 passed by the Commissioner of Central Excise & Service Tax (Appeals), Pune) M/s. Wilo Mather & Platt Pumps Ltd. Appellant E-25, MIDC, Gokul Shirgaon, Kolhapur Vs. Commissioner of CGST, Kolhapur Respondent Vasant Plaza, Commercial Complex, Rajaram Road, Bagal Chowk, Kolhapur 416 001.
Appearance:
Shri M.H. Patil with Shri Viraj Reshamwala, Advocates, for the Appellant Shri Amrendra Kumar Jha, Deputy Commissioner, Authorised Representative for the Respondent 2 E/1050/2012,85853/2014,86152/2015 CORAM:
HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) HON'BLE DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL) Date of Hearing: 01.03.2023 Date of Decision: 01.03.2023 FINAL ORDER NO. 85811-85813/2023 PER: SANJIV SRIVASTAVA These appeals involve a common issue hence taken up for consideration simultaneously. The details of the appeal as detailed below:
SNo. Appeal No. Impugned Demand Period
Order date (Rs)
1 E/1050/12 30.03.12 68,44,267 Sept.,07 to
Oct..,10
2 E/85853/14 10.12.13 16,88,014 Nov.10 to
Aug, 11
3 E/86152/15 09.03.15 24,62,408 Sept, 11 to
Aug. 12
2.1 The appellants were manufacturing "Pressure Boosting
System" consisting of Power Driven Pumps, Piping, Control Panel, water tank, base plate, cables and switches. The pressure Boosting System consisting of all the above items are assembled on the base plate and the same cleared as a complete unit. The appellants were clearing the said goods at concessional rate of duty after availing benefit of Notification No.10/2006-CE dated 01.03.2006.
2.2 Based on an intelligence that the assessee was wrongly availing the exemption notification No. 10/2006- C.E. dated 1/3/2006 for their products investigation was initiated. During the investigation it was found that the appellant were manufacturing and clearing goods falling under ch.sh 84137010 of the schedule to the C.Ex. Tariff Act, 1985 at concessional rate of duty after availing Notification No.10/2006- C.E. dated 1/3/2006 as amended. The relevant portion of the notification is as below S. Chapter or Description of goods Rate under the No. heading or First Schedule sub- heading or tariff item 3 E/1050/2012,85853/2014,86152/2015 (1) (2) (3) (4)
17. 8413 Power driven pumps primarily designed for 8% upto handling water, namely, centrifugal pumps 6/12/2008 and (horizontal or vertical), deep tube- well 4% from turbine pumps, submersible pumps, axial 7/12/2008 flow and mixed flow vertical pumps Revenue was of the view that benefit of concessional rate of duty is available only to the products described in column no.3 above, and not to the goods cleared by the appellants as Pressure Boosting system.
2.3 A show cause cum demand notice dated 14.01.2011 was issued inter alia demanding duty short paid of Rs. 68,44,267/- on the clearances of the said products during the period from September 2007 to October 2010 along with interest, and proposing imposition of penalty. Periodical show cause notices were issued to the appellant subsequently.
2.4 By the impugned order dated 30.03.2012 the Show Cause Notice dated 14.11.2011 was adjudicated confirming the duty demanded with interest and imposing penalty of equal amount. Hence the appeal at S No 1.
2.5 Show cause notices issued for the subsequent period were confirmed by the original authority and upheld by the Commissioner (Appeal) as per the impugned orders at Sl No 2 and 3. Hence the appeals at Sl No 2 and 3.
3.1 We have heard Shri M H Patil and Shri Viraj Reshamwala, Advocates for the appellant and Shri Amrendra Kumar Jha, Authorized Representative for the revenue.
3.2 Arguing for the appellant learned counsel submits:
The common issue involved in the appeals is as to whether Pressure Booster System (PBS, for short), a combination of Power Driven Pumps (PDPs, for short), is eligible for exemption/concessional rate of duty under Notn. No. 10/2006-CE dated 1.3.2006 (Sr.No.17) and succeeding Notn. No. 12/2012-CE dated 17.03.2012 (Sr.No.235), in a case where:
o PBS is basically a combination of PDPs placed alongside on base frame and interconnected with
4 E/1050/2012,85853/2014,86152/2015 piping, control panel, etc. to boost the requisite pressure and supply of water at constant pressure at all levels in a building;
o PBS is working based on the principle of centrifugal force and specially designed for handling water with specific gravity of 01;
o PBS is for sole and principal use for handling water. When a single Power Driven Pump (under the name PBS) (Model Nos. HMHIL and FMHIL) is cleared and meant for handling water, the Dept. has allowed exemption without questioning. When 2/3/4 Power Driven Pumps (under the name PBS) mounted parallel on base frame interconnected with control panel, etc. (Model Nos. CO-MVI-BC and COR - MHI-CC) are cleared exemption was denied. Depending upon the requirement of the customers, when more than one PDPs are mounted on base frame and interconnected with control panel and G.I. Pipes, the same are categorized as CO, COR, etc. for multi booster pumps when single pressure booster pumps is categorized as HMHIL, FMHIL. The function and the purpose of Pressure Booster System is to achieve twin objectives, i.e. maintaining uniform pressure at various heights (on different floors) and saving energy, which is achieved from the mechanism of automatic trip-off when there is no requirement. In a nutshell, more number of pumps are mounted on base frame with a control panel to maintain uniform pressure on all the floors for supply of water and save energy. The booster pumps are needed to boost the pressure and supply the water at the constant pressure throughout the circuit and therefore, the booster pumps are installed with a pre-designed pressure. The booster pumps are also power driven with the help of electric motors. The functioning of the pumps used in pressure booster systems is based on the principle of centrifugal force. In support of the contention that PBS is centrifugal pump reliance is placed on certificates from independent Chartered Engineers, College of Engineering, Pune, IIT- Bombay, etc. 5 E/1050/2012,85853/2014,86152/2015 M/s.Grundfos Pumps India Pvt. Ltd., manufacturing similar PBS, were clearing their CH-4-40 CH TWIN series of pumps by availing exemption u/n 10/2006-CE (Sr.No.17). When the catalogues of Mather & Platt and Grundfos Pumps are compared, it is clear that both the products are PBS There was no suppression of facts whatsoever and hence, extended period and penalty are not sustainable, which is as substantiated below:
o along with the application for registration, the Appellants have submitted technical literature of the disputed product;
o They have filed periodical ER-1 Returns;
o Dept. granted exemption to their Pune Unit; o They have mentioned Handling Water Pump with T.I.No.8413 70 10 in ER-1 Returns and also in the invoices, which can be correlated with catalogue numbers;
o They have intimated to the Dept., through their letter dated 15.09.2007, about manufacture of Booster Pumps.
They also rely on the various decisions put forth during the course of hearing and the relevant tariff entries, chapter and section notes.
For the subsequent periods, demands confirmed were appealed against before Commissioner (Appeals), who allowed the appeals. Out of four Orders-in-Appeal passed by the Commissioner (Appeals), two Orders-in- Appeal dated 03.11.2015 and 02.03.2016 were not challenged by the Dept. and two Orders-in-Appeal dated 01.06.2017 and 27.02.2017 the Dept. had challenged before CESTAT, which were dismissed on monetary limits.
3.3 Learned authorized representative reiterates the findings recorded in the impugned order 4.1 We have considered the impugned order along with the submissions made in appeal and during the course of arguments.
4.2 Power Driven Pumps primarily designed for handling water, namely, centrifugal pumps (horizontal or vertical), etc. have been fully exempt or chargeable to concessional rate of duty as
6 E/1050/2012,85853/2014,86152/2015 per entry No. 17 of Notn. 10/2006-CE dated 01.03.2006 and succeeding Notn.No.12/2012-CE dated 17.03.2012 (Sr.No.235), which reads as under:
"Power Driven Pumps primarily designed for handling water, namely, centrifugal pumps (horizontal or vertical), deep tube well turbine pumps, submersible pumps, axial flow and mixed flow vertical pumps"
4.3 When a single Power Driven Pump (under the name PBS) (Model Nos. HMHIL and FMHIL) is cleared and meant for handling water, the Dept. has allowed exemption. When 2/3/4 Power Driven Pumps (under the name PBS) mounted parallel on base frame interconnected with control panel, etc. (Model Nos. CO-MVI-BC and COR -MHI-CC) are cleared exemption is denied.
4.4 Depending upon the requirement of the customers, when more than one PDPs are mounted on base frame and interconnected with control panel and G.I. Pipes, the same are categorized as CO, COR, etc. for multi booster pumps when single pressure booster pumps is categorized as HMHIL, FMHIL. The function and the purpose of Pressure Booster System is to achieve twin objectives, i.e. maintaining uniform pressure at various heights (on different floors) and saving energy, which is achieved from the mechanism of automatic trip-off when there is no requirement. In a nutshell, more number of pumps are mounted on base frame with a control panel to maintain uniform pressure on all the floors for supply of water and save energy. Pumps when fitted on a base frame and connected with control panel with manifold, it would be sold as CO, COR. When a single pump, with requisite pressure switch fitted to it is sold, they are called HMHIL and FMHIL. Main function of PBS is what the power driven pumps does and also to maintain constant pressure at all the outlets of water throughout the building;
4.5 In support of the contention that PBS is centrifugal pump appellant had produced the certificate from various agencies which are reproduced below
(a) Chartered Engineer, Shri Vasant Agsar, vide his certificate dated 21.07.2012, inter-alia certifies as under:
"XXXXXXXXX XXXXXXXXX XXXXXXXXX 7 E/1050/2012,85853/2014,86152/2015 I observed that centrifugal pumps manufactured by M/s. Mather and Platt Pumps Ltd. are based on the principle of "centrifugal and specially designed for handling water with specific gravity of 01 (one) XXXXXXXXX XXXXXXXXX XXXXXXXXX In view of the resistance of the pipe & other factors, the water pressure gets reduced after certain intervals. The booster pumps are needed to boost the pressure and supply the water at the constant pressure throughout the circuit and therefore the booster pumps are installed with a predesigned pressure. The booster pumps are also power driven with the help of electric motors.
A copy of catalogue of M/s. Mather and Platt Pumps Ltd. is attached here with as an annexure which clearly indicates that the booster pumps are centrifugal pumps and specifically designed to handle the water for various applications I also observed that M/s. Mather and Platt Pumps Ltd. designs and supplies the complete system wherein the multiple booster pumps (Pressure Boosting System) are stationed at a single point and controlled by the control panel. Pressure reducing valves are installed at various locations to regulate the water pressure at various points.
XXXXXXXXX XXXXXXXXX Pressure boosting systems "XXXXXXXXX XXXXXXXXX XXXXXXXXX"
Application Water supply and pressure boosting in residential, commercial and public buildings, hotels, hospitals, department stores and for industrial systems. For delivering portable water and process water, cooling water, water for fire-fighting or other water mixtures which do not chemically or mechanically attack the materials used and do not contain either abrasive or fibrous matter.
XXXXXXXXX XXXXXXXXX XXXXXXXXX Pumps 8 E/1050/2012,85853/2014,86152/2015 2 to 6 pumps of the MVI 2 to MVI 95, series are used, switched in parallel. All of the components of these pumps that are in contact with the fluid are made of stainless steel 1,4301 or 1,4301/cast iron/cataphoretic- coated. Pumps constructed entirely of stainless steel 1,4301/1,4408 on request. For further information on the pumps, please refer to Catalogue chapter 83 High-pressure multistage centrifugal pumps.
XXXXXXXXX XXXXXXXXX XXXXXXXXX"
(b) College of Engineering, Pune, vide certificate dated 25.08.2012, inter-alia certifies as under:
"XXXXXXXXX XXXXXXXXX XXXXXXXXX the functioning of the pumps used in pressure boosting systems and it is based on the principle of Centrifugal force. Each Centrifugal pump is coupled with the motor as a prime mover. Function of the motor is give rotation so that the impeller of the pump rotates with a desired Revolution to give a specified output.
XXXXXXXXX XXXXXXXXX T XXXXXXXXX ..........Pressure boosting system is nothing but one or more pumps together mounted on a base frame with necessary valves and control panel for smooth operation of the pumps in the circuit.
XXXXXXXXX XXXXXXXXX XXXXXXXXX ... that pumps used in the single pump booster (HMHIL/FMHIL) and Pressure boosting system (E.g. Descriptions are like CO - MVI xxx CC) are power driven pumps based on the principle of centrifugal force and these pumps / systems are specifically designed for handling clear water having specific gravity.
XXXXXXXXX XXXXXXXXX XXXXXXXXX"
(c) Indian Institute of Technology, Bombay vide certificate dated 10.09.2012, inter-alia certifies as under:
"XXXXXXXXX XXXXXXXXX XXXXXXXXX ......Two or more pumps together in parallel constitute a pressure boosting system. Hence we confirm that pumps used in pressure boosting system are power driven centrifugal pumps 9 E/1050/2012,85853/2014,86152/2015 XXXXXXXXX XXXXXXXXX XXXXXXXXX"
4.6 Pumps used in the single pump booster (i.e. HMHIL/FMHIL) and Pumps used in multiple (i.e. CO-MVI xxx CC) are PDPs, working on the principle of centrifugal force and these pumps/systems are specifically designed for handling water. Hence we are of the view that the benefit of exemption could not have been denied to the appellant as whether a single pump or the entire system having more than one pump will continue to be same.
4.7 By invoking note 3 to Section XVI of Schedule to CETA, under which chapter 84 and 85 are covered, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function;
4.8 Likewise, as per Note 7 to Chapter 84, a machine which is used for more than one purpose, is for the purposes of classification, to be treated as if its principal purpose were its sole purpose;
4.9 The issue involved in the present case is no longer res- integra. Tribunal has in the case of Forge & Blower Industries Ltd [2012 (84) ELT 609 (T-Ahmd)] held as follows:
10. On perusal of the records, it is seen that the Show Cause Notices were issued on the ground that the appellant had wrongly availed the benefit of Notification No. 10/2006-C.E., dated 1-3-2006 by clearing the Centrifugal Pumps without attaching prime mover i.e. motor/engine. Demands have been confirmed on the ground that the pumps, though basically designed to lift water from one point to another, there is no energy in form of motor and the benefit of notification can be availed only if the pumps are attached with electric motors. It is undisputed that such Centrifugal Pumps which are manufactured by the appellant are classifiable under Chapter Heading No. 84.13. It is also seen that there is no other classification of pumps was enumerated. It is necessary to read the main Chapter Heading 84.13, which reads as "Pumps for liquids, 10 E/1050/2012,85853/2014,86152/2015 whether or not fitted with a measuring device; liquid elevators", the product manufactured by the assessee falls under Chapter Heading 8413.10 which has description as "Primarily designed to handle water". It can be seen that basically the said tariff heading is for pumps which handles liquid and the product manufactured by the appellant is primarily designed to handle water, is an undisputed position. On perusal of the relevant part of the notification as extracted hereinabove, it can be seen that the description of the goods given in the tariff entry and the description of the goods provided in the notification match inasmuch as they are for Centrifugal Pumps "primarily designed for handling water". Both the entries are related to pumps designed to handle water. One of the reasons given by the lower authorities for denial of exemption notification to the appellant is on the ground that the notification provides exemption only when pumps are power driven i.e. the pumps should have motors attached to them. It is to be noted that once the pump is designed and manufactured "primarily for handling of water", it becomes eligible for exemption, as the heading in notification specifically talks about the Centrifugal Pumps (horizontal or vertical). The said Centrifugal Pumps, as manufactured by the appellant, can be used for some other purpose, is not brought on record by the Revenue, while it is the claim of the appellant that such Centrifugal Pumps manufactured by them can be used only and designed for the purpose of for handling water. It is to be noted that the characteristics of the Centrifugal Pumps always remains the same whether the motor/engine is attached to it or not. The contention of the ld. Counsel that the engine/motor is not a part of the pump, has a strong force as the entry in the exemption notification, though talks about the power driven, does not specify what would power driven pump mean. Be that as it may, the said entry in exemption notification specifically talks about the Centrifugal Pumps which are the goods manufactured and cleared by the appellant.
11. It is seen that C.B.E. & C. vide Circular No. 224/58/96-CX., dated 26-6-1996 had given the following clarification with regard to the classification and excisability of the power driven pumps sets for handling water, is reproduced in toto.
11 E/1050/2012,85853/2014,86152/2015 "Circular No. 224/58/96-CX., dated 26-6-1996 Sub. : CE - Classification and excisability of Power Driven Pump Sets for handling water - Regarding.
I am directed to say that the Confederation of Indian Industry has pointed out about divergence in practice of classification of Power Driven Pump Sets for handling water. A P.D. Pump Set may be a pump having an inbuilt prime mover designed and built as a complete unit, called a mono block pump-set, or a pump and a prime mover being two separable units whether coupled or not put/intended to be put on a common platform. It has been represented that it is classified in some Commissionerates under Chapter Heading 84.13 extending the benefit of Notification No. 56/95, dated 16-3-1995 (previous Notification No. 46/94, dated 1-3-1994) either fully or partially whereas, other Commissionerates are classifying this product under Chapter Heading 84.79 hereby denying the benefit of exemption.
2. The matter has been examined in depth. Board in its F.No. 151/13/92-CX.4 (Pt.) (Circular No. 11/11/94, dated 2-2-1994) has held that electric motors or rotors or stators are components parts of P.D. Pumps. Following the same analogy, the prime mover, i.e. I.C. Engine may be treated as an integral part of P.D. Pump. The Board takes note of Note 3 of Section XVI of Central Excise Tariff which states that composite machines consisting of two or more machines fitted together to form a whole and other machines adapted for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function. As the principal function of a pump set is that of the pump, the pump set is rightly classifiable under Chapter sub-heading 84.13.
3. Hence, the Board is of the view that Power Driven Pump Sets are classifiable under Chapter Heading 84.13 and if such Power Driven Pump Sets are primarily meant for handling water, the benefit of Notification No. 56/95, dated 16-3-1995 will be admissible to the whole pump set."
12 E/1050/2012,85853/2014,86152/2015
12. On reading of the above given clarification, it is to be noted that C.B.E. & C. is also of the view that the power driven pump sets are also classified under Chapter Heading No. 84.13 if such pump sets are primarily meant for handling water.
13. Once the fact that the product manufactured by the appellant with or without motor gets classified under Chapter Heading 84.13 and if it is undisputed that such pumps are primarily for the purpose of handling water, then the denial of exemption notification to the appellant would be incorrect.
14. As regards the interpretation of the exemption notification, is a similar issue in respect of whether concrete mix manufactured at the site of construction for use in the construction work at site would include ready mix concrete or not, was in dispute which was referred to Larger Bench. The Tribunal in the Larger Bench in the case of Chief Engineer Ranjit Sagar Dam - 2006 (198) E.L.T. 503 (Tri.-LB) (wherein I was one of the Member), has specifically held that when the exemption notification exempts concrete mix which includes ready mix concrete, the exemption notification should not be denied. In order to appreciate the correct position, the entire judgment is reproduced.
"This matter is referred to Larger Bench by a division Bench in its referral Order No. 207/05-EX., dated 26-7-2005. At Para No. 2 the referral Bench noted as follows :-
"It is the contention of the revenue that the issue remains covered against the assessee by the decision of this Tribunal in the case of Continental Foundation Joint Venture v. CCE, Chandigarh - 2002 (150) E.L.T. 216. Learned counsel for the assessee also fairly concedes this position, even though he seeks to distinguish that decision on some other grounds like there being no sale or purchase.
We note that the exemption is in regard to "concrete mix manufacturer" at site and used at site. Perusal of the Indian Standard specifications and other materials produced before us would appear to suggest that there is no difference between concrete mix and ready mix concrete. After all, concrete mix for construction is the same irrespective of method of preparation.
13 E/1050/2012,85853/2014,86152/2015 In this view of the matter, we are not able to agree with the decision in the case of Continental Foundation Joint Venture v. CCE, Chandigarh. That decision would appear to require reconsideration by a Larger Bench. Registry is, therefore, directed to place the file before the Hon'ble President for the constitution of a Larger Bench."
2. In this case the appellant was executing a project of construction of a Dam known as "Ranjit Sagar Dam". The appellants in the course of construction of Dam, prepared concrete mix at site and used the same in the Dam construction. The Revenue demanded duty on the said concrete mix on the ground that the said concrete mix would be covered under the Tariff Sub-heading No. 3824.90 of Central Excise Tariff Act, 1985 relying upon Central Board of Excise & Customs Circulars dated 1-2-96, 23-6-97 and 6-1-98 and decision of the Tribunal in the case Continental Foundation Joint Venture v. CCE, Chandigarh - 2002 (150) E.L.T. 216. It is the contention of the appellant that they are eligible for exemption from payment of duty vide Serial No. 51 of Notification No. 4/97. The adjudicating authority relying upon the Board's Circular and the case of Continental Foundation classified the concrete mix under Sub-heading No. 3824.90 and confirmed the demand for the period 1-3-97 to 1- 6-98 and also imposed the penalty and interest was also sought to be recovered from the appellants.
3. The learned Senior Advocate appearing for the appellants contends that the product manufactured by the appellant would not get covered under the Sub-heading as Ready Mix Concrete. It was submitted that the product "Ready Mix Concrete" and the "Concrete Mix" are the same, and reliance was placed on Standards IS 4926 : 2003 and IS 456 : 2000 as issued by Bureau of Indian Standards. It was submitted that the Standards for Concrete Mix are covered under the IS 456 : 2000, which lays down the procedure for "Plain and reinforced concrete - code of practice" in detail, while IS 4926 : 2003 lays down the standard of "Ready Mixed Concrete - Code of practice,"
wherefrom it would be noticed that the selection and quality of ingredients like cement, gravel chemical, etc. are laid down in detail in IS 456 : 2000 and IS 4926 : 2000 relies upon the 14 E/1050/2012,85853/2014,86152/2015 earlier Standards IS 456 : 2000 for quality of ingredients. It was urged that there is no difference between "plain & reinforced concrete" and "Ready Mixed Concrete". It was also contended that the benefit of the exemption Notification No. 4/97 is available to the appellants as the concrete mix is manufactured by the appellants "at the site of construction" of a Dam Intervening.
4. We have considered the submissions made by both sides and perused records.
5. In the case of Continental Foundation Joint Venture case (supra) the Tribunal after noting the process of manufacture of Ready Mix Concrete and Concrete Mix at Para No. 14 came to the following conclusion :-
"Thus, on carefully taking into consideration the manufacturing process adopted by the appellants, the Board's instructions and the expert opinion of the BIS on the subject, we are of the view that the product manufactured by the appellants is RMC falling under sub-heading 3824.20 of the Central Excise Tariff and shall be subject to the corresponding rate of duty. This RMC is not eligible to the exemption under Sl. No. 51 of the Table attached to Notification No. 4/97-C.E. as this notification exempts concrete mix manufactured and used at the site of construction and not the RMC."
Advocate also points out that in writ petition No. 15035 of 1995 in the Hon'ble High Court at Madras, the department has accepted and conceded that Ready Mix Concrete manufactured at site is eligible for exemption and now department cannot take a different stand here. He also submits that in an identical issue in the case of Larsen & Tubro Ltd., the Hon'ble Supreme Court has admitted the civil appeal filed by L & T as reported at 2006 (194) E.L.T. A57.
6. The learned D.R. on the other hand contends that the concrete mix manufactured by the appellant is transported by the appellants to the site of the Dam and there is a transportation of the concrete mix. It was submitted that the concrete mix manufactured with the aid of sophisticated machinery would mean that the same is covered under Heading 15 E/1050/2012,85853/2014,86152/2015 of "Ready Mixed Concrete." It was also urged that benefit of exemption under notification would not be available to the appellants as the said notification exempts only concrete mix and does not exempt "Ready Mix Concrete."
7. The exemption granted under Serial No. 51 of Notification No. 4/97 during the relevant period stood as under :
Sl. Chapter or Description of goods
No. Heading/ Sub- Rate
heading No.
"51. 38 Concrete mix manufactured at Nil
the site of construction for use in
construction work at such site"
8. During the relevant period i.e. from 1-3-97 to 1-6-98 the Chapter Heading Nos. were as under :-
"1996-97 38.22 Prepared binders for foundry moulds or 20% cores; 3823.00 chemical products and preparations of the chemicals or allied industries (including those consisting mixtures of natural products), not elsewhere specified or included; residual products of the chemical or allied industries, not elsewhere specified or included 1997-98 38.24 Prepared binders for foundry moulds or Cores;
chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included; Residual products of the chemical or allied industries, not elsewhere specified or included 3824.10 - Phosphogypsum 13%
- Ready mix concrete 13% 3824.20
- Others 18%"
3824.90
9. It can be seen from the above that the "concrete mix", and "Ready mix concrete" get covered under Chapter No. 38, and it is not in dispute.
10. General exemption Notification No. 4/97-C.E. was issued by the Central Government by the powers conferred by sub-section (1) of Section 5A of the Central Excise Act, 1944. The said Section 5A authorizes the Government to issue exemption from 16 E/1050/2012,85853/2014,86152/2015 payment of duty by issuing a notification. The exemption Notification No. 4/97-C.E. reads as under :
"In exercise of the powers conferred by sub-section (1) of Section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts excisable goods specified in column (3) of the table below...."
It can be seen that the exemption granted vide above notification, by Government to the excisable goods, is in the public interest and that also after being satisfied that it is so. To our mind the exemption granted to "concrete mix" at serial No. 51, "manufactured at the site of construction for use in construction work at such site", should not be given a narrow meaning as to include only "Concrete Mix" and exclude from its ambit Ready Mix Concrete manufactured at site. It was the contention of learned D.R. that in this case also the concrete mix is not manufactured at Dam site, but away from the site and transported hence would not be eligible for exemption as it would become "Ready Mix Concrete". It is a known fact that the sites of dams are at places surrounded by the hills and there may not be any place near the "Dam Site" to erect a concrete mixing plant. The concrete mixing plant, by necessity has to be located at place within the vicinity of the Dam Site, which may depend upon the contours of the area where the Dam is being constructed. This itself would not exclude the concrete mix manufactured at this plant from exemption granted under Serial No. 51 of the Notification No. 4/97-C.E. We find strength in this conclusion from the wording of the entry at serial No. 51. The heading to Table to notification in column No. 2 talks about the "Chapter or heading No. or sub-heading No." that is sought to be exempted by the notification. In the case before us the entry at column No. 2 at serial No. 51 says only "38" i.e. it refers to only Chapter No. The said entry does not refer to any heading No. or Sub-heading No. To our mind the Central Government had every intention to exempt all kinds of "Concrete Mix" from payment of duty, which is very evident from the fact that, the said notification in respect of many items indicates heading No. and sub-heading Nos. specifically. If the law makers did not intend to 17 E/1050/2012,85853/2014,86152/2015 exempt "Ready Mix Concrete" falling under Chapter Sub-heading No. "3824.20/3824.90" they would have categorically said so, by indicating in the serial No. 51 only the specific heading Nos. which are eligible for exemption. Since, the notification intends to cover all the "Concrete Mix manufactured at the site of construction for the use in construction work at such site", it would also cover the "Ready Mix Concrete" in its ambit of exemption.
11. In the case of Larsen & Toubro Ltd., before the Hon'ble High Court of Judicature at Madras the Additional Central Government Standing Counsel conceded the issue. It is recorded by the Hon'ble High Court at Para 6 which reads as under :-
"At the hearing the learned Additional Central Government Standing Counsel specifically took a stand that Ready Mix Concrete is not leviable even if it is manufactured at the site of construction, but it is leviable only if such Ready Mix Concrete, which is manufactured in a place other than the place of construction for the one's own purpose or for its use somewhere else or by sale and by transportation of the same from Ready Mix Plant to such site of third parties or consumers as the case may be."
After recording the views of the Central Government Counsel, the Hon'ble High Court has disposed off the writ petition as under :-
"7. Though there is some inconsistency in Para-4 of the Notification issued by the Board, since the learned Standing Counsel for the respondents had clarified that Ready Mix Concrete is exempted only if it is manufactured at site by the promoter or builder for use as the case may be for its own construction at the site of construction.
8. The learned Additional Central Government Standing Counsel further represented that duty is leviable in respect of Ready Mix Concrete if it is manufactured in a Ready Mix unit installed for the purpose, supplied or transported through containers to sites of construction, which is different from the sites of mixing plant. In the light of the said stand taken by Mr. Veeraraghavan, Additional Central Government Standing Counsel, it is 18 E/1050/2012,85853/2014,86152/2015 unnecessary to examine the contentions set out in the writ petition.
9. In the result, while recording the representation submitted by the learned Additional Central Government Standing Counsel, this writ petition is disposed of accordingly. Parties shall bear their respective costs."
The abovesaid order of the Hon'ble High Court fortifies our view that benefit of exemption under Notification No. 4/97 is available to Ready Mix Concrete also provided it is "manufactured at the site of construction".
12. As we have held above, that the entry at serial No. 51 of Notification No. 4/97, exempts all "Concrete Mixes" which fall under Chapter 38, and as it is not disputed that the product of the appellant gets covered under Chapter 38, the reference is answered in favour of the appellants. We also allow the appeal since no other issue arises in this case.
13. The reference to the Larger Bench and appeal are disposed of in the above terms."
15. Applying the ratio of above judgment of Larger Bench, it can be seen that the product manufactured by the appellant is undoubtedly classifiable under Chapter 84.13 which was covered by Notification No. 10/2006-C.E., dated 1-3-2006, and eligible for benefit of reduced rate of duty. The Larger Bench decision's ratio in a similar situation will squarely apply in this case also."
4.10 In case of Simplex Electrical Engineering Pvt Ltd. [2010 (254) ELT 531 (T-Kol)] following was held:
"4. The contention of the appellant is that the benefit of the Notification has been allowed on the basis of Board's Circular and the Circular was merely to settle a classification dispute. The appellant while relying upon definition in Wikipedia INTERNET encyclopaedia, contended that even if centrifugal pumps can be powered by other prime-movers, the term, 'power-driven' exclusively meant those pumps that run on electric power. The benefit of the Notification is available to the manufacturers who manufacture power-driven pumps and I.C. Engines together. The imported goods were brought under cover of invoices issued by a trader and not by a manufacturer and that too, where P.D. 19 E/1050/2012,85853/2014,86152/2015 pumps and diesel engines have been brought separately. They also contended that mere classification under Chapter Heading 84.13 does not necessarily follow that the same goods automatically qualify for the benefit of the Notification No. 10/06-C.E. The Board's Circular settled the classification dispute which was not relevant to the issue. The appellant contended that the benefit under Sl. No. 17 of Notification No. 10/2006-C.E. is to be given, if the pumps are driven exclusively by electric power. The benefit of the said Notification is not extendable to the manufacturer who does not manufacture pumps and I.C. Engines together and clears them from the same unit.
5. The Contention of the respondent is that the C.B.E.C. Circular No. 224/58/96-CX., dated 26-6-96 relied upon by the Commissioner (Appeals), clearly clarifies that pump i.e. I.C. engine may be treated as an integral part of power-driven water pump. This conclusively proves that the power-driven water pump is not necessarily required to be driven by electric power. It may also be driven by diesel engine. Contention of the respondent is that pump engines are manufactured separately by different manufacturers showing them complete pump-set.
6. I have considered the submissions and carefully verified the records of the case. I find that the respondent has declared the goods in the Bill of Entry as "Centri Water Pumpset comprising of D. Engineering R176RC4" which is not disputed by either side. Therefore, the contention that P.D. pumps and diesel engine have been brought separately, is contrary to the facts on record. The appellants' contention that the term, 'power-driven' exclusively meant those pumps that run on electric power, is not keeping in pace with the time. Further, the Commissioner (Appeals) granted the benefit under Sl. No. 17 of Notification No. 10/2006-C.E., while relying upon the Board's Circular dated 26- 6-96. Paras 2 and 3 of the said Circular reads as under :
"2. The matter has been examined in depth. Board in its F.No. 151/13/92-CX4 (Pt.) (Circular No. 11/11/94, dated 2-2-1994) has held that electric motors or rotors or stators are components parts of P.D. Pumps. Following the same analogy, the prime mover, i.e. I.C. Engine may be treated as an integral part of P.D. Pump. The Board takes note of Note 3 of Section XVI of Central 20 E/1050/2012,85853/2014,86152/2015 Excise Tariff which states that composite machines consisting of two or more machines fitted together to form a whole and other machines adapted for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function. As the principal function of a pump set is that of the pump, the pump set is rightly classifiable under Chapter sub-heading 84.13.
3. Hence, the Board is of the view that Power Driven Pump Sets are classifiable under Chapter Heading 84.13 and if such Power Driven Pump Sets are primarily meant for handling water, the benefit of Notification No. 56/95, dated 16-3-1995 will be admissible to the whole pump set."
From the above, it is clear that the Board's Circular not only deals with classification but also underlines that I.C. Engine may be treated as an integral part of P.D. Pump. Moreover, diesel engine is an I.C. engine, is not in dispute. The Notification exempts power-driven pumps primarily designed for handling water, namely, centrifugal pumps (horizontal or vertical), deep tube-well turbine pumps, submersible pumps, axial flow and mixed flow vertical pumps."
4.11 Commissioner (Appeals) for the subsequent periods vide the order in appeals as indicated below have held in favour of allowing the exemption. Some of these orders have not been challenged and where challenged the appeals have been withdrawn on monetary limits as per the litigation policy.
Sr.No. Particulars 01 Order-in-Appeal No.KLH-EXCUS-000-APP-227-2015-16 dated 02.03.2016 ..........not appealed against by Dept. 02 Order-in-Appeal No.KLH-EXCUS-000-APP-136 to 138-2015-16 dated 03.11.2015...not appealed against by Dept. 03 Order-in-Appeal No.KLH-EXCUS-000-APP-263-16-17 dated 27.02.2017.......appealed against by Dept. but CESTAT, vide order No. A/87114/2019 dated 20.11.2019, dismissed the appeal on monetary limit 04 Order-in-Appeal No.KLH-EXCUS-000-APP-140-2017-18 dated 01.06.2017......appealed against by Dept., but CESTAT, vide order 21 E/1050/2012,85853/2014,86152/2015 No. A/86699-86700/2021 dated 20.08.2021 dismissed the appeal on monetary limit 4.13 The decisions relied upon by the learned authorized representative do not advance the case of revenue. Following the above decisions we do not find merits in the impugned order and set aside the same.
5.1 Appeals are allowed.
(Order pronounced in the open court) (Sanjiv Srivastava) Member (Technical) (Dr. Suvendu Kumar Pati) Member (Judicial) tvu