Exemption for cement in 50 kg bags upheld where buyers qualified as institutional or eligible users under the notification.

Cement cleared in 50 kg bags was treated as eligible for the benefit of serial No. 1C of Notification No. 4/2006-C.E. when sold to builders, contractors, industrial users engaged in construction, Government buyers, and ready-mix concrete producers. The analysis applied earlier Tribunal decisions to hold that such buyers could fall within the notification's eligible categories where the factual use and buyer character satisfied the exemption conditions. On that basis, the denial of benefit failed, and the related demand, interest, and equal penalty were not sustainable.

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Issues: Whether cement cleared in 50 kg bags to builders, contractors, industrial consumers, Government and ready-mix concrete producers was eligible for the benefit of serial No. 1C of Notification No. 4/2006-C.E. dated 01-03-2006, and whether the resulting demand, interest and equal penalty could be sustained.

Analysis: The issue stood covered by earlier Tribunal decisions holding that cement sold in 50 kg bags to builders and developers qualified as sales to institutional consumers, entitling the clearances to the benefit under serial No. 1C of the notification. The same principle extended to industrial buyers who used cement for construction activities and to Government buyers as institutional purchasers. The denial of benefit to ready-mix concrete producers was also untenable where the cement was used in the manufacture of excisable ready-mix concrete. The finding of suppression or wilful misstatement could not survive once the clearances were held eligible for the notification benefit.

Conclusion: The benefit of Notification No. 4/2006-C.E. was available to the impugned clearances, and the demand, interest and equal penalty were not sustainable.

Ratio Decidendi: Sales of cement in 50 kg bags to builders, developers, industrial users for construction, Government buyers, and ready-mix concrete producers fall within the eligible categories under the exemption notification where the factual use and buyer character satisfy the notification conditions.

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