Customs, Excise and Gold Tribunal - Mumbai
Eversmile Pre-Fab Pvt. Ltd. vs The Commissioner Of Central Excise on 27 January, 2006
Equivalent citations: 2006(106)ECC104, 2006(109)ECC104, 2006ECR104(TRI.-MUMBAI), 2006(200)ELT136(TRI-MUMBAI)
ORDER Archana Wadhwa, Member (J)
1. The appellant is engaged in the manufacture of Cement Concrete Building Blocks of modular design, which are used in walls of building. Prior to the period in dispute, the appellant was claiming classification of the said product under heading 68.07 with the benefit of Notification No. 64/88. The said notification provided concessional rate of duty to blocks slabs, lintels, concrete beams and stairs constituting intermediates and components of pre-fabricated buildings falling under heading No. 94.06. The classification list filed by the appellants during the period 1988 and 1990 were finally approved. However, on account of dispute as regards the availability of said Notification to another manufacturer similarly situate, the classification list filed by the appellants from 1991 onwards were approved provisionally. The said provisional approval was challenged by the appellants before the Commissioner (Appeals), who vide his order dated 18/04/91 held that the benefit of the Notification was available to the appellants. The said order was not challenged by the revenue.
2. However, for the period subsequent to the order of the Commissioner (Appeals), classification lists were continued to be approved provisionally. Various show cause notices raising demands were also issued on the ground that the benefit of notification cannot be extended to the Cement concrete blocks in question inasmuch as the same are not intermediates or components of pre-fabricated buildings. It is these notices issued from time to time to the appellants, as detailed in the impugned order, which stands confirmed by the Commissioner vide his impugned order.
3. Shri V.S. Nankani, Ld. Advocate, appearing for the appellants before us fairly concedes that the Tribunal's order in the case of M/s. Excon Building Materials Manufacturing Co. Pvt. Ltd. v. CCE, Mumbai vide order No. 59/99-D dated 23/11/98 is against the appellants inasmuch as vide the said order, the Tribunal, after considering the entire relevant material on record has held that exemption Notification is not available to Cement concrete blocks inasmuch as the same are used in masonary work and cannot be considered as intermediates or components of pre-fabricated buildings. The same appeared to be only substitute for bricks, which are used in traditional construction work. Appeal there against stands decided by the Hon'ble Supreme Court vide their judgments dated 03/03/2005. However, Ld. Advocate submits that the said decision of the Tribunal in the case of M/s. Excon Building Materials Manufacturing Co. Pvt. Ltd., was without considering the contention of the appellants and, as such, had been rendered in sub-silentio. As regards the approval of the same by the Hon'ble Supreme Court, he draws our attention to the observation made by their Lordship that the appellants never claimed that the blocks could be used in pre-fabricated building or that they were intermediates or components of pre-fabricated building and that their only claim was that the benefit of notification was available even to block, slabs and lintels falling under Tariff Item 68.07 even though such blocks, slabs and lintels did not constitute an intermediate or component of pre-fabricated building. Inasmuch as in their case, they are claiming that their blocks are components of pre-fabricated building, the Supreme Court's decision will not apply to their case. However, on being questioned, he fairly agree that the blocks manufactured by them are identical to the blocks manufactured by M/s. Excon Building Materials Manufacturing Co. Pvt. Ltd., and are used in the walls of pre-fabricated buildings.
4. After considering the submissions made by both sides, we find that the issue is no more res integra and stands settled right up to the Hon'ble Supreme Court, when the Tribunal's decision passed in the case of M/s. Excon Building Materials Manufacturing Co. Pvt. Ltd., was approved by the Hon'ble Supreme Court and the appeal filed there against was rejected.
5. It was categorically held by the Hon'ble Supreme Court that - We are unable to accept the submissions that blocks/slabs/lintels by themselves are entitled to the benefit of the notification. If the intention was to make a difference between block, slabs and lintels on the one hand and concrete beams and stairs on the other, they would have specifically done so.
6. We do not find much force in the Ld. Advocate's contention that the order of the Tribunal and the Hon'ble Supreme Court was given in the circumstances when the assessee in that case never claimed the block to be intermediates or components of pre-fabricated buildings. The identical goods having been held to be not entitled to the benefit of exemption notification, we see no reasons to take a different view inasmuch as we are bound by the judgments of the Hon'ble Supreme Court and cannot take a different view on the ground that certain contentions were not raised before the Hon'ble Court. As such, we hold that the benefit of Noti1fication No. 64/88 has been rightly denied to the appellants.
7. The appellants have further claimed that the Notification No. 64/88 dated 01/03/88 was amended by Finance Act, 1997 by substituting words "components or intermediates of pre-fabricated buildings" by "of a kind used in the pre-fabricated buildings". As such, it is their contention that inasmuch as the blocks manufactured by them are capable of being used as components of pre-fabricated buildings, they should be extended the benefit of the notification. The expression "of a kind use in" is a wider connotation, as interpreted by the Tribunal in the case of Uday Traders v. Collector of Customs, Nhava Sheva . However, we find that the said amendments does not advance the appellant's case inasmuch as the blocks manufactured by the appellants are admittedly used in construction of walls/buildings or for flooring and cannot be held to be components or intermediates of pre-fabricated buildings, as observed by the Hon'ble Supreme Court. Even the expression - "of a kind used in the pre-fabricated buildings" require the appellants to establish that the goods manufactured by them are used in pre-fabricated buildings, which they have failed to do. As such, we also do not find any merits in the above contention of the appellants.
8. The appellants have also assailed the demand on limitation. It is seen that a number of show cause notices are adjudicated by the Commissioner, some invoking longer period of limitation and some within the normal period. wherever the classification was approved provisionally, the question of limitation does not arise. However, wherever the demands has been raised by invoking the longer period of limitation, in case of finally approved classification, we agree with the Ld. Advocate that the same would be hit by bar of limitation, inasmuch as the appellants cannot be held guilty of suppression or misstatement with an intent to evade payment of duty. The entire facts were before the revenue, who were extending the benefit of notification to the appellants prior to entertaining doubt about the same, when they started approving the same provisionally. For the same reasons, imposition of any penalties upon the appellants is not warranted.
9. In view of the foregoing, we hold that the benefit of notification was not available. However, the demand is required to be confirmed within the normal period of limitation. Accordingly, we direct the Commissioner to quantify the demands against the appellants. In case of provisional assessments, limitation will not apply. Penalties are however set aside. Appeal is disposed of in above manner.
(Pronounced in Court on 27/1/06)