Cement classification turns on composition and commercial use, not clinkering alone; penalty was deleted on the facts.

For tariff classification of cement, the decisive factors are the product's nature, composition and accepted commercial use, not merely whether it undergoes clinkering or contains Portland cement. A mixture of granulated blast furnace slag, fly ash, lime and gypsum with setting and binding properties was treated as a variety of cement under Tariff Item 23(2) and not under Tariff Item 68. The penalty under the Central Excise Rules, 1944 was also found unsustainable on the facts and was deleted.

---

---

Issues: (i) Whether the product manufactured from granulated blast furnace slag, fly ash, lime and gypsum was classifiable as cement under Tariff Item 23(2) of the Central Excise Tariff or under Tariff Item 68. (ii) Whether the penalty imposed under the Central Excise Rules, 1944 was sustainable.

Issue (i): Whether the product manufactured from granulated blast furnace slag, fly ash, lime and gypsum was classifiable as cement under Tariff Item 23(2) of the Central Excise Tariff or under Tariff Item 68.

Analysis: The product was found by the Chemical Examiner to be an intimate mixture of blast furnace slag type material, lime and gypsum, with plasticity and setting properties on addition of water. The composition and admitted use for laying bricks and plastering showed that it functioned as a binding substance. The absence of a clinkering stage did not prevent it from being treated as cement, because all cement need not be portland cement and non-portland varieties were recognized. The classification depended on the nature, composition and accepted use of the product, not on the presence of clinker alone.

Conclusion: The product was correctly classified as a variety of cement under Tariff Item 23(2) and not under Tariff Item 68, against the assessee.

Issue (ii): Whether the penalty imposed under the Central Excise Rules, 1944 was sustainable.

Analysis: The appellate order did not maintain the original penalty, and no sufficient justification was found for imposing penalty in the circumstances of the case.

Conclusion: The penalty was not sustainable and was deleted, in favour of the assessee.

Final Conclusion: The classification of the product as cement was upheld, but the penalty was set aside, resulting in only partial relief to the assessee.

Ratio Decidendi: For tariff classification of cement, the decisive consideration is the nature, composition and accepted commercial use of the product, and not merely whether it passes through a clinkering stage or contains portland cement.

---