Custom, Excise & Service Tax Tribunal
M/S Mand Vally Minerals Ltd vs Cce, Bhopal on 12 April, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI PRINCIPAL BENCH, COURT NO. III Excise Appeal No. 159 of 2005-EX[DB] [Arising out of Order-In-Appeal No 327/Appl/BPL/2004 dated 04.10.2004 passed by Commissioner of Central Excise, Bhopal] For approval and signature: Honble Ms. Archana Wadhwa, Member (Judicial) Honble Mr. Rakesh Kumar, 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? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes M/s Mand Vally Minerals Ltd. Appellants Vs. CCE, Bhopal Respondent
Appearance:
Shri Hrishikesh, Advocate for the Appellants Shri Sanjay Jain, DR for the Respondent CORAM:
Hon'ble Ms. Archana Wadhwa, Member (Judicial) Hon'ble Mr. Rakesh Kumar, Member (Technical) Date of Hearing/decision : 12.04.2013 ORDER NO ./ FO 56242 /2013-Ex(Br) Per Archana Wadhwa (for the Bench):
After hearing both sides, duly represented by Shri Hrishikesh, learned Advocate appearing for the appellant and Shri Sanjay Jain, learned DR appearing for the respondent Revenue, we find that the dispute in the present appeal relates to classification of dry concrete mixture, loose or packed, manufactured by the appellant. Whereas the appellants have claimed the classification of the same under heading 3824.20, the Revenues contention is that same is classifiable under heading 3824.90. For better appreciation, we reproduce two contending entries:
3824.20 -Ready mix concrete 3824.90 -Other As is seen from the above, ready mix concrete is classifiable under 3824.20. However, Revenues contention is that appellants product is not ready mixed concrete but the same is dry mix concrete which is different from the ready mix concrete.
3. It is seen that undisputed manufacturing process of dry mixed concrete is as under:-
The appellants manufactured it by mixing ordinary Portland cement and either calundum (a product of M/s. ACC Katni classifiable under heading 2502.50 of the schedule of CETA, 1985) or casal, in almost equal proportion, in a ball mill. In the mixture that comes out of the ball mill, approx 15 to 25% of sand is added along with certain additives like soda ash, sodium sulphite, gypsum or plaster of paris and lime in small proportion and whole thing is mixed in a R.R. mixture. The product is then encapsulated in perforated polythene bags, packed and removed to the customers. The goods were also got tested by the Chemical Examiner who opined the same to be as under:-
the sample was grey coloured coarse, guilty powder composed of oxides, silicate of iron, aluminum calcium, magnesium etc. with small amount of sulphate (characteristics of cement) along with sand and had setting property.
4. The lower authorities, from the above manufacturing process as also based upon the Chemical Examiners report held that appellants product does not contain stone aggregates and water. The report reveals that there is gitty powder but no stone aggregates. As per ISI specification the mixture can be held to be ready mix concrete only when the same is ready to be used without any further process. Inasmuch the appellants product contains no water which is required to be added and agitated before putting the same to use for construction, it cannot be held to be ready mix concrete. The lower authorities have observed that no cement concrete can set or become harder without being mixed with water and ready mix concrete which is already mixed with water has got very short shelf life whereas the dry mixed concrete, which is cleared by the appellant in plastic bags, has much longer shelf life. Further ready mix concrete is loaded in transit mixer, mounted on truck whereas the appellant has cleared their product in plastic bags. As such, the lower authorities have held that dry mix concrete cannot be held to be ready mix concrete and as such not classifiable under heading 3824.20.
5. We find that as per ISI specifications No. 4926/1976, ready mix concrete is delivered at site or into the purchasers vehicle in a plastic condition and requiring no further treatment before being placed in the position in which it is to be set and hardened. We also note that said ISI specifications refer to two types of ready mix concrete and in both the types water is said to be an essential element. The only difference between the two types is that in one case water is added at a stationery central mixing plant and delivered in containers fitted with agitating devices and in one case, the addition of water and mixture is to be added along with mixing water in the vehicles where the mixing is carried out entirely in the truck-mixer either during the journey or arrived at the site of delivery. As such, the said specification make it very clear that ready mix concrete does not require any further treatment and the agitation, which is defined as a process of continuing the mixing of concrete at a reduced speed during transportation to prevent segregation in the agitator which is truck mounted equipment designed to agitate concrete during transportation to the site of delivery are the essential requisites of ready mixed concrete. When compared with the appellants final product, it is seen that dry mix concrete is not provided in the specifically designed transit mixture and there is no addition of water. It is saying that clearance of cement in plastic bags cannot be considered to be cement mixed with water which activity is essentially done at the site.
6. We also, at this stage, take note of the Tribunals decision in the case of Unitech Prefab Ltd. vs. CCE, Mumbai III [2004 (174) ELT 29 (Tri-Mum)] wherein while dealing with the issue as to whether the assessees product in that case was dry mixed or ready mixer cement, the Tribunal observed as under:-
The absence of water however is dealt with and met by relying upon Interpretation Rule 2(a) to confirm the demands. The findings arrived, ignore and do not consider the literature given in the McGraw Hill Dictionary of Scientific and Technical Terms, Merriam Websters Collegiate Dictionary (Tenth Edition), which all go to indicate the presence of water to be causing and giving the essential character to concrete. Merely because an hydrous Mixture of cement, sand and stone agglomerates is arrived meeting specification of IS 4926-1976 without water, has to be considered to have reached the essential characteristic of Ready Mix Concrete cannot be upheld. The reliance on Rule 2(a) of Interpretative Rules is not therefore upheld. ISI specification 4926-1976 for the purpose of that Standard define Ready Mix Concrete as :-
Concrete delivered at site or into the purchasers vehicle in a plastic condition and requiring no further treatment before being placed in the position in which it is to be set and hardened.
The words plastic condition can only mean a shape taking condition, a forming condition. A dry mix of cement sand and stones cannot be in plastic condition. Water and other plasticizers give that essential characteristic to Ready Mixer Cement to achieve a forming condition. The goods in dry arid state, being removed in the mixer trucks, are to go to site and are to be mixed with special grade/purity water and plasticizers to bring in plastic condition and setting and hardening, forming, conditional qualities. As removed, in the Trucks, the entity under classification, it does not have Plastic condition or setting and hardening capability, therefore it cannot be Ready Mix Concrete as per term defined & understood and used in IS 4926-1976. If that be so, the entity Dry Mix' is not Ready Mix Cement classified under 3824.20, on or after 1-3-1997. Before the date, there was no classification available for Ready Mix concrete. As is seen from the above, Tribunal observed that the dry mix of cement stones and sand though cleared in mixture trucks to the site, cannot be held to be ready mix concrete inasmuch as there was no plastic condition, or setting and hardening quality on account of any addition of water. As such, the Tribunal accepted the assessees contention in that case that dry mix cement cannot be held to be ready mix cement. As such, though that dry mix concrete was removed in transit mixture vehicle but the Tribunal accepted the assessees contention that on account of non-addition of water, it cannot be held to be ready mix concrete. In the present case even the dry mix concrete is not being removed in specifically designed transit vehicle but is only removed in plastic bags, the same by no stretch of imagination can be held to be falling under heading 3824.20. If that be so, it is to fall under the heading 3824.90. We accordingly find no merit in the appellants contention on the above issue.
7. At this stage, learned advocate submits that they have alternative claim of the benefit of SSI exemption and requantification of duty demand by considering the entire consideration as cum duty price. He fairly agrees that said issue were not raised before adjudicating authority but were raised before first appellate authority. Inasmuch as same are legal issues, we direct the lower authorities to examine the availability of SSI exemption, admissibility and to re-quantify the demand thereafter by treating the same as cum duty price.
8. The appeal is disposed of in the above terms.
(Pronounced in the open court) ( Archana Wadhwa ) Member(Judicial) ( Rakesh Kumar ) Member(Technical) ss ??
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