2017 (9) TMI 1115 - AT - Central Excise

Tribunal clarifies Ready Mix Concrete vs. Concrete Mix classification, remands for re-determination.

The Tribunal remanded the case to the original authority for re-determination, emphasizing the distinction between Ready Mix Concrete (RMC) and Concrete ... Classification of goods - ready mix concrete - whether such goods manufactured at the site may be called as Concrete Mix, which is exempted under N/N. 04/97-CE dated 01.03.1997 or will be classifiable under Ready Mix Concrete under Central Excise Tariff Sub-heading No.38245010, which will attract Central Excise duty? - Held that: - the goods in question will need to be determined either as ready mix concrete or concrete mix on the basis whether the same has been especially made with precision and of high standard and as per the particular needs to the customer and delivery to the customer at his site. To facilitate such determination, we set aside the impugned order and remand the matter to the original authority for such re-determination - If after such re-consideration, refund arises, the same can be paid subject to unjust enrichment - appeal allowed by way of remand. Issues Involved:1. Classification of the product as Concrete Mix or Ready Mix Concrete (RMC).2. Applicability of exemption under Notification No.04/97-CE dated 01.03.1997.3. Consideration of unjust enrichment before granting a refund.Detailed Analysis:1. Classification of the Product:The primary issue revolves around whether the goods produced by M/s ACC Concrete Ltd. within the respondent's factory premises should be classified as Concrete Mix or Ready Mix Concrete (RMC). The Department contended that the product is RMC, which falls under Central Excise Tariff heading No.3824.20 and is subject to excise duty. In contrast, the respondent argued that the product is Concrete Mix, exempt from duty under Notification No.04/97-CE. The Tribunal referred to the CBEC Circular No.368/1/98-CX, which differentiates RMC from Concrete Mix based on production methods and usage. RMC is defined as concrete delivered in a plastic condition, requiring no further treatment before use, whereas Concrete Mix is produced and used at the construction site.2. Applicability of Exemption under Notification No.04/97-CE:The Tribunal examined whether the product manufactured at the site qualifies for exemption under Notification No.04/97-CE dated 01.03.1997. The authorities below had favored the respondent's view that the product qualifies for exemption. However, the Revenue challenged this, citing the distinction between RMC and Concrete Mix. The Tribunal referenced the Supreme Court's decision in the case of Larson & Toubro, which clarified that RMC and Concrete Mix are distinct products, with RMC attracting excise duty and not covered by the exemption notification. The Tribunal emphasized that RMC, even if manufactured at the site, does not qualify for the exemption.3. Consideration of Unjust Enrichment:The Department argued that the lower authorities did not consider the aspect of unjust enrichment before granting the refund. The Tribunal agreed that if a refund arises after re-determination, it should be subject to the principle of unjust enrichment, as established by the Supreme Court in Union of India Vs. Solar Pesticide Pvt. Ltd.Conclusion:The Tribunal set aside the impugned order and remanded the case to the original authority for re-determination, considering the observations of the Supreme Court regarding the distinction between RMC and Concrete Mix. The original authority is tasked with determining whether the product is RMC or Concrete Mix based on its production method and usage. If a refund is warranted, it must be subject to the principle of unjust enrichment. The appeal filed by the Revenue was allowed by way of remand.Pronouncement:The judgment was pronounced in open court on 29.08.2017.