Custom, Excise & Service Tax Tribunal
4. Whether Order Is To Be Circulated To ... vs M/S Forge & Blower Industries Ltd on 23 May, 2012
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT AHMEDABAD
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Appeal No.E/816/2009
Arising out of: OIA No.144 to 145/2009(Ahd-II)CE/ID/Commr(A)/Ahd, dt.27.03.2009
Passed by: Commissioner of Central Excise & Customs (Appeals), Ahmedabad
For approval and signature:
Mr.M.V. Ravindran, Honble Member (Judicial)
Mr. B.S.V. Murthy, Honble Member (Technical)
1. Whether Press Reporters may be allowed to see the No
Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the No
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy of Seen
the order?
4. Whether order is to be circulated to the Departmental Yes
authorities?
Appellant:
M/s Forge & Blower Industries Ltd.
Respondent:
CCE Ahmedabad Represented by:
Shri Alok Bhartwal, Adv.: for Assessee.
Shri S.K. Mall, A.R.: for the Revenue.
CORAM:
MR.M.V. RAVINDRAN, HONBLE MEMBER (JUDICIAL) MR. B.S.V. MURTHY, HONBLE MEMBER (TECHNICAL) Date of Hearing:23.05.12 Date of Decision:
ORDER No. /WZB/AHD/2012, dt._____________ Per: M.V. Ravindran:
This appeal is directed against Order-in-Appeal No.144 to 145/2009 (Ahd-II)CE/ID/Commr(A)/Ahd, dt.27.03.2009.
2. The relevant facts that arise for consideration are that during a search carried out by the Preventive Wing, it was found that M/s Forge & Blower Industries Ltd. were engaged in manufacture of Centrifugal Pumps, cleared these pumps without attaching prime mover i.e. motor/engine under Chapter Heading No.8413.11/84137010 of Customs Excise Tariff Act, 1985 by paying Excise duty @ 8%. The Department issued two Show Cause Notices dt.31.8.07 and 04.01.08 on the ground that the appellants were required to classify the said centrifugal pumps under Chapter Heading 841399/8439120 of Customs Excise Tariff Act, 1985 and were required to pay Excise duty @ 16% since their product is not a Power driven pump but a part of Centrifugal Pump as no motor or engine was attached to it. A demand proposing recovery of differential Excise duty of Rs.44,33,459/- (for the period March 2003 to March 2004 and April 2006 to November 2006) and Rs.19,84,775/- (for the period December 2006 to October 2007) respectively totaling to Rs.64,18,234/- was issued under proviso to Section 11A(1) of Central Excise Act, 1944, interest under Section 11AB and imposition of penalty under Section 11AC ibid read with Rule 25 of Central Excise Rules, 2002 and also proposed imposition of penalty on Shri Kiran P. Mangalwedhekar, Director of the appellant company. Both the Show Cause Notices were adjudicated by the Additional Commissioner vide the impugned order confirming the demand of Rs.64,18,234/- along with interest, imposing penalty equal to duty on the appellant company and also imposing penalty of Rs.10 lakhs on the director of the appellant company.
3. Aggrieved by such an order confirming the demand, the appellant preferred an appeal before first appellate authority. The first appellate authority, after considering the issue in detail and after following the principles of natural justice, set aside the demand of duty liability to the extent which is beyond the period of limitation, but upheld the demand with interest and equal amount of penalty within the period of limitation on the appellant company and set aside the personal penalty imposed on the Director of the appellant company. Hence, the present appeal.
4. Ld.Counsel would submit that both the lower authorities have mis-directed themselves while interpreting the benefit of Notification No.10/2006-CE, dt.1.3.2006. It is his submission that the appellant has availed the benefit of said notification for discharge of duty liability at concessional rate of duty than the rate fixed by the tariff. It is his submission that the product manufactured by the appellant is undoubtedly the centrifugal pump, which falls under tariff heading No.84.13 and is primarily designed to handle the water. After taking us through the tariff heading, he would take us through the general exemption granted to the said item at Sr.No.17 of Notification No. No.10/2006-CE, dt.1.3.2006 as amended from time to time. He would read the said heading as to indicate that the Centrifugal Pumps are also eligible for reduced rate of duty, as has been indicated in the said exemption notification. It is also his submission that various other manufacturers of identical pumps are availing the benefit of said notification all over India. It is his submission that the Tribunal in the case of Beacon Weir Ltd Vs CCE Madras 1997 (95) ELT 140 (Tribunal) and in the case of Kishore Pumps Ltd. - 1997 (91) ELT 91 (Tribunal) would squarely cover the issue in his favour, as it has been held that the electric motor is only a device which converts the electrical energy into mechanical energy and the pump is distinct from the unit, combining the pump and the electric motor. It is his submission that the appeal against the judgment in the case of Kishore Pumps Ltd was dismissed by Hon'ble Supreme Court. It is his submission that though all the cases which are referred to by him were in respect of Central Excise valuation, but they have laid down the principle as to that PD pump may be with or without electric motor, but would get classified under Chapter Heading No.84.13. It is his submission that the benefit of Notification No.10/2006-CE, dt.1.3.2006 No.10/2006-CE, dt.1.3.2006 should not be denied to them.
5. Ld.SDR, on the other hand, would read the very same Sr.No.17 of General Exemption Notification No.10/2006-CE, dt.1.3.2006 and submit that the intention of the Government was to exempt the power driven pump, primarily designed for handling water viz. Centrifugal Pumps etc. It is his submission that once the description in the notification talks about the power driven pump, it has to be along with electric motor as otherwise the pumps manufactured by the appellant would not be a power driven pump but only a Centrifugal Pump. It is his submission that the wordings in the notification should be construed strictly as it is an exception carved out from the normal law. It is his submission that for the purpose that the exemption notification should be construed strictly, he would rely upon the judgment of Honble Apex Court in the case of Hari Chand Shri Gopal 2010 (260) ELT 3 (SC). He would also rely upon the judgment of the Tribunal in the case of Dura-Metallic (India) Ltd. 1997 (89) ELT 778 (Tribunal) and in the case of Honda Siel Power Products Ltd. 2007 (208) ELT 292 (Tri-Del). It is his submission that the judgment of Honble Apex Court in the case of Mewar Bartan Nirmal Udyog 2008 (231) ELT 27 (SC) should be considered as it talks about the interpretation of exemption notification which has to be read strictly.
6. Considered the submissions made by both sides and perused the records.
7. The issue involved in this case is whether the appellant is eligible for the benefit of reduced rate of Excise duty as granted under Notification No.10/2006-CE, dt.1.3.2006, more specifically under Sr.No.17, as amended from time to time.
8. The factual matrix which is undisputed is that the appellant herein are manufacturer of Centrifugal Pumps falling under Chapter Heading No.84.13 during the material period. It is also undisputed that the appellant is also clearing these Centrifugal Pumps to M/s Kirloskar Cummins Ltd., who attach the motor to it and cleared the same as Pump Set. It is also undisputed that the Centrifugal Pumps manufactured by the appellant are primarily designed for handling water and no other liquids.
9. On this background, it has to be seen whether the appellant is eligible for the benefit of Sr.No.17 of Notification No.10/2006-CE, dt.1.3.2006. In order to appreciate the correct position, we reproduce the heading which grants exemption.
General Exemption No.50.
Effective rates of duty for specified goods of Chapters 44, 48, 59, 66, 68, 70, 73, 74, 76, 82, 84, 85, 87, 90, 94 and 95 and specified waste scrap and industrial waste.-
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 and in supersession of the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 10/2003-Central Excise dated the 1st March, 2003 [G.S.R 140(E), dated the 1st March, 2003], except as respects things done or omitted to be done before such supersession, hereby exempts excisable goods of the description specified in column (3) of the Table below and falling within the Chapter, heading, sub-heading or the tariff item of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as the Central Excise Tariff Act), specified in the corresponding entry in column (2) of the said Table (hereinafter referred to as the said goods), from so much of the duty of excise leviable thereon under the First Schedule to the Central Excise Tariff Act, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table.
Explanation I.-For the removal of doubts, it is clarified that a manufacturer who has availed of full exemption under notification No.8/2003-Central Excise, dated the 1st March, 2003, published in the Gazette of India vide number G.S.R. 129 (E), as the case may be, in any financial year, is permitted to avail this exemption in the same financial year.
Explanation II..-For the purposes of this notification the retail sale price means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes, local or otherwise, freight, transport charges, commission payable to dealers and all charges towards advertisement, delivery, packing, forwarding and the like, as the case may be, and the price is the sole consideration for such sale.
Explanation III .-For the purposes of this notification, the rates specified in column (4) of the said Table are ad valorem rates, unless otherwise specified.
TABLE SN Chapter or heading or sub-heading or tariff item Description of goods Rate under the First Schedule
1. 44 Articles of wood, other than articles of densified wood and flush doors 8%
2. 4820 All goods, other than notebooks and exercise books 8%
3. 4821 All goods 8%
4. 4823 70 10 All goods 8%
5. 5906 10 00 All goods Nil
6. 5908 Tubular knitted gas mantle fabric, whether or not impregnated, for use in incandescent gas mantles Nil
7. 6602 00 00 All goods Nil
8. 6814 Articles of mica 8%
9. 68 (except headings 6804, 6805, 6811, 6812, 6813) Solid or hollow building blocks, including aerated or cellular light weight concrete blocks and slabs 8%
10. 7015 10 Glasses for corrective spectacles and flint buttons Nil
11. 7323 All goods other than parts and pressure cookers Nil
12. 7326 20 10 All goods Nil
13. 7418 Table, kitchen or other household articles (other than parts) Nil
14. 7615 11 00, 7615 19 Table, kitchen or other household articles, pot scourers and scouring or polishing pads, gloves and the like (other than parts and pressure cookers falling under tariff item 7615 19 10) Nil
15. 8211 or 8214 Knives Nil
16. 8215 All goods Nil
17. 8413 Power driven pumps primarily designed for handling water, namely, centrifugal pumps (horizontal or vertical), deep tubewell turbine pumps, submersible pumps, axial flow and mixed flow vertical pumps 8%
18. 8413 Hand pumps and parts thereof Nil
19. 8414 20 10, 8414 20 20, or 8414 90 12 All goods Nil
20. 8481 80 41 or 8481 90 10 All goods Nil
21. 8483 10 10 All goods 8%
22. 8524 Audio cassettes Nil
23. 8539 Vacuum and gas filled bulbs of retail sale price not exceeding Rs. 20 per bulb 8%
24. 8712 All goods Nil
25. 8714 Parts and accessories of vehicle of heading 8712 Nil
26. 90 or any other Chapter Medical equipment and other goods (other than parts and accessories thereof) specified in List 1 annexed to this notification Explanation.- For the purposes of this exemption the items in the list above shall not include Foley Balloon Catheters.
8%
27. 9004 Sunglasses for correcting vision and goggles 8%
28. 9018 All goods (other than parts and accessories thereof) 8%
29. 9019 All goods (other than parts and accessories thereof) 8%
30. 9022 All goods for medical, surgical, dental and veterinary use (other than parts and accessories thereof) 8%
31. 9405 50 31 Kerosene pressure lantern Nil
32. 9501 All goods (other than parts and accessories thereof) Nil
33. 9502 All goods (other than parts and accessories thereof) Nil
34. 9503 All goods (other than parts and accessories thereof) Nil
35. 9603 21 00 Toothbrushes 8%
36. Any Chapter Waste and scrap arising during the course of manufacture of the goods specified against S. No.1 to 35 above (except S.No.18, 23, 27 and 35) Nil LIST 1 (See S. No. 26 of the Table) (1) C.A.M. stimulator (2) Contact lens lathe (3) Contact lens polishing machine (4) Contact lens thickness measuring gauge (5) Corneal Anesthesiometer (6) Cryo-lathe (7) Dark adaptometer (8) Exophthalmometer (9) Glare testing equipment (10) Ophthalmic cryo equipment (11) Ophthalmic operating lights and fibre optic lights (12) Ophthalmo dynamometer (13) Pantoscope (14) Projection magnifier for contact lens inspection and verification (15) Radiuscope base curve (for measurement of contact lenses) (16) Refractometer (17) Roper Hall foreign body locator (18) Softometer for measurement of the base curve of soft contact lens (19) Stereozoom microscope for inspection of contact lens (20) Ultrasonography A.B.M. scan/ pacchymeter/cleaner (21) Linear accelerator.
(Notification No.10/2006-C.E., dt.1.3.2006 as amended by Notification No.48/2006-C.E. dt.30.12.006 and Notification No.10/2007-C.E. dt.1.3.2007)
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-CE, dt.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, 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 handing 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, i 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 CBE&C vide Circular No.224/58/96-CX, dt.26.6.96 had given the following clarification with regard to the classification and excisability of the power driven pumps sets for handing water, is reproduced in toto.
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 monoblock 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. On reading of the above given clarification, it is to be noted that CBE&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) ELT 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. 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 re-consideration by a Larger Bench. Registry is, therefore, directed to place the file before the Honble 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) ELT 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 Boards 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 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 Boards 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 Honble 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 & Turbo Ltd., the Honble 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 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. No. Chapter or Heading /Sub-heading No. Description of goods Rate 51.38
Concrete mix manufactured at the site of construction for use in construction work at such site Nil
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 3823.00 Prepared binders for foundry moulds or 20% cores; 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% 3824.20
- Ready mix concrete 13% 3824.90
- Others 18%
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 payment of duty by issuing a notification. The exemption notification No. 4/97-C.E. reads as under:
In exercise of 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 to do so, 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 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 Honble High Court of Judicature at Madras the Additional Central Government Standing Counsel conceded the issue. It is recorded by the Honble 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 Honble High Court has disposed off the writ petition as under:-
7. Though there is some inconsistency in Para-4 of the?7. 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?8. 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 unnecessary to examine the contentions set out in the writ petition.
9. In the result, while recording?9. 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 above said order of the Honble 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 classificable under Chapter 84.13 which was covered by Notification No.10/2006-CE, dt.1.3.2006, and eligible for benefit of reduced rate of duty. The Larger Bench decisions ratio in a similar situation will squarely apply in this case also.
16. In view of the foregoing, it has to be held that the impugned order is incorrect and not in consonance with the law laid down by the Larger Bench and is liable to be set aside and is set aside.
(Pronounced in Court on ______________________)
(B.S.V. Murthy) (M.V. Ravindran)
Member (Technical) Member (Judicial)
cbb
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