Cement exemption for industrial and institutional consumers upheld where 50 kg bag packing did not defeat the concessional rate.

Cement cleared in 50 kg bags was held to qualify for the concessional rate under Notification No. 4/2006-CE where the goods were supplied to builders, contractors, manufacturers, educational institutions, hospitals, societies and similar buyers treated as industrial or institutional consumers. The Tribunal applied Rule 2A of the Packaged Commodities Rules to hold that packages meant for such consumers were outside the retail-sale declaration regime, and read the relevant expression disjunctively so that mere packing in 50 kg bags did not defeat the exemption. Clearances for self-consumption and unsold warehouse stock were also not treated as retail sales. The duty demand was therefore unsustainable.

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Issues: Whether the appellant's clearances of cement in 50 kg bags to builders, contractors, manufacturers, institutions, hospitals, societies, infrastructure projects, self-consumption inside the factory and unsold warehouse stock were eligible for concessional duty under Notification No. 4/2006-CE.

Analysis: The concessional entry applied to cement other than goods cleared in packaged form, and the third proviso turned on whether retail sale price was required to be declared under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977. Rule 2A excluded packages meant for industrial consumers and institutional consumers, and also excluded certain cement bags from the retail-sale declaration requirement. The clearances to builders, contractors, manufacturers, educational institutions, hospitals, societies and similar buyers were treated as sales to industrial or institutional consumers. The Tribunal also followed the view that the word "and" in Rule 2A was to be read disjunctively, so the exemption from the retail-sale regime was not lost merely because the cement was packed in 50 kg bags. The quantities used for self-consumption and held as unsold stock were not retail sales and therefore also did not attract denial of the benefit on the reasoning adopted in the order.

Conclusion: The duty demand was unsustainable and the appellant was entitled to the concessional rate under the notification.

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