2015 (12) TMI 666 - SC - Central Excise

Supreme Court: Ready Mix Concrete subject to excise duty; reassessment ordered for accurate classification

Commissioner of Central Excise Versus M/s Shapoorji Pallonji & Co. Ltd. & Ors.

The Supreme Court held that Ready Mix Concrete (RMC) amounts to 'manufacture' and is liable for excise duty, overturning the Tribunal's decision. The ... Manufacture - Ready Mix Concrete - RMC or MC - Held that:- Respondent had taken a specific plea before the Adjudicating Authority that the produce in question is not RMC but only 'Mix Concrete' (MC). This contention was rejected by the Adjudicating Authority in Order-in-Original passed by it. The assessee had challenged those findings before the Tribunal. However, the Tribunal did not go into this aspect as it proceeded on the basis that even if it was RMC produced at site, the same shall be entitled to exemption under the requisite Notification. In view thereof, the matter needs to be remanded back to the Tribunal to decide the aforesaid factual aspect viz. whether the produce in question is RMC manufactured at site or is it MC as contended by the assessee. - assessee is to be given a chance to contest the finding of the Adjudicating Authority, once such a stand is taken before the Tribunal and there is no finding thereon recorded by the Tribunal. However, we make it clear that it will always be open to the appellant/Department to justify the order passed by the Adjudicating Authority on the basis of material which is relied upon by the Adjudicating Authority including the statements of the officials of the assessee and effect thereof. - Impugned order is set aside - Decided in favour of assessee. Issues:1. Whether Ready Mix Concrete (RMC) amounts to 'manufacture' and is liable for excise duty.2. Whether the produce in question is RMC or Mix Concrete (MC).Analysis:1. The Supreme Court addressed the issue of whether Ready Mix Concrete (RMC) amounts to 'manufacture' and is liable for excise duty. The Tribunal had allowed the appeals of the respondent/assessee, holding that RMC does not amount to 'manufacture' and is not liable for excise duty. However, the Court referred to a previous judgment where it was held that RMC would amount to 'manufacture' and be liable for excise duty. Consequently, the Court set aside the Tribunal's judgment on this ground alone, indicating that RMC should be considered as 'manufacture' and subject to excise duty.2. The Court also delved into the issue of whether the produce in question is RMC or Mix Concrete (MC). The respondent had contended before the Adjudicating Authority that the produce was MC, not RMC. This contention was rejected by the Authority, and the Tribunal did not address this aspect, assuming it was RMC produced on-site. The Court decided to remand the case back to the Tribunal to determine whether the produce is RMC manufactured on-site or MC as claimed by the assessee. The Court emphasized the importance of allowing the assessee to contest the findings of the Adjudicating Authority and directed the Tribunal to consider this factual aspect afresh.In conclusion, the Supreme Court allowed the appeals, set aside the Tribunal's order, and remitted the case back to the Tribunal for a fresh examination in light of the Court's observations. The Court clarified that the Department could justify the Adjudicating Authority's order based on the material relied upon, including statements of the assessee's officials.