Concessional duty on cement to industrial and institutional consumers upheld where retail price declaration was not required.

Cement cleared in 50 kg bags to buyers using it for ready-mix concrete manufacture and construction work was treated as supply to industrial or institutional consumers. Because Rule 2A of the Packaged Commodities Rules excluded Chapter II for such direct purchases from manufacturers, retail sale price declaration was not required, and the goods were eligible for concessional treatment under Notification No. 4/2006 as if cleared in other than packaged form. The duty demand and penalty were therefore not sustainable.

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Issues: Whether cement cleared in 50 kg bags to industrial and institutional consumers was eligible for concessional duty under Notification No. 4/2006, and whether such clearances were to be treated as clearances in packaged form for the purpose of the Packaged Commodities Rules, 1977.

Analysis: The notification provided concessional treatment where retail sale price declaration was not required under the Packaged Commodities Rules, in which event duty was to be determined as if the goods were cleared in other than packaged form. Rule 2A of the Packaged Commodities Rules excluded Chapter II in the case of institutional or industrial consumers buying packaged commodities directly from manufacturers for use in service industry or similar purposes. The record showed that the cement was cleared for manufacture of ready-mix concrete and for use by builders in construction activity, bringing the buyers within the category of industrial or institutional consumers. The impugned order also relied on the applicable legal provisions and supporting precedent to hold that the concession was available.

Conclusion: The clearances were correctly treated as eligible for the concessional notification, and the duty demand and penalty were not sustainable.

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