2018 (10) TMI 153 - AT - Central Excise

Tribunal rules cement for captive consumption eligible for benefit under Notification No.4/2007-CE.

ACC Limited Versus Commissioner of Central Excise, Nagpur

The Tribunal ruled in favor of the appellants, finding them eligible for the benefit under Notification No.4/2007-CE. The Tribunal determined that the ... Benefit of concessional rate of duty - Cement cleared for captive use - N/N. 4/2007-CE dated 01.03.2007 - denial of benefit on the ground that appellant is not a mini-cement plant; the clearance being for captive consumption no retail sale is involved and the clearances are in packaged form only. Held that:- In terms of Standards of Weights and Measures (Packaged Commodities) Rules, 1977, the appellants are not required to declare RSP. Therefore, by virtue of the 3rd proviso they are to be assessed/ determined to duty as in the case of goods cleared in packaging form. Therefore, the impugned goods are required to be charged to duty in terms of 1C of the said Notification - Tribunal in the case of ACC Ltd Vs CCE, Coimbatore [2017 (8) TMI 1168 - CESTAT CHENNAI] held that cement cleared for self-consumption cannot be considered as ‘retail sales’ under Rule 3(q) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977. Appeal allowed - decided in favor of appellant. Issues:Whether the appellants are eligible for the benefit of Notification No.4/2007-CE dated 01.03.2007 on the cement cleared by them for captive use.Analysis:The case involves M/s ACC Limited (Chanda Cement Works) engaging in cement manufacturing under Chapter 25 of CETA, 1985. The appellants cleared packed cement for captive consumption at a concessional rate of duty under entry 1C of Notification No.4/2007-CE dated 01.03.2007. Revenue disputed the eligibility citing reasons such as the appellant not being a mini-cement plant, the clearance not involving retail sale, and the clearances being in packaged form only. A show cause notice (SCN) was issued on 2-4-2008, confirmed by OIO dated 30-8-2008, and upheld by Commissioner (A) on 26-11-2009, leading to this appeal.The appellants argued that they fulfilled the conditions for eligibility under the Notification. They contended that since the goods were not manufactured by a mini cement plant, they were not covered under Entry 1B of the Notification. The appellants claimed to meet the conditions under Entry 1C of the Notification, emphasizing that they did not declare the Retail Sale Price (RSP) on the packaged cement cleared for captive consumption, as per the Standards of Weights and Measures (Packaged Commodities) Rules, 1977. They relied on the third proviso to explanation 2 under Entry 1C of the Notification to argue that the cement cleared in packaged form should be treated as other than packaged form, thus falling within the ambit of the said entry.The appellants further supported their case by referring to CBEC Circular 124/02/2008 CX-3, which clarified that goods not involving retail sale as per PC Rules would be covered under Entry 1B or 1C of the Notification. They also cited precedents like CCE Bangalore Vs Mysore Cements Ltd, ACC Ltd Vs CCE Coimbatore, Ambuja Cements Ltd Vs CCE Raipur, and Grasim Industries Ltd Vs CCE Trichy to strengthen their argument. Additionally, they contended that the demand was time-barred, as the SCN issued on 2-4-2008 covered a period from 01.03.2007 to 31-01-2008, while they had disclosed their intention to claim benefit earlier.Upon hearing both sides and examining the records, the Tribunal focused on determining the eligibility criteria for the Notification. The Tribunal found that the appellants satisfied the conditions required for benefit under the Notification, as the goods were not manufactured by a mini cement plant and were not covered under 1B, and were not cleared in packaged form. The key issue was whether the clearances could be treated as other than in packaged form, which the Tribunal addressed by analyzing the third proviso to the Notification. The Tribunal concluded that the appellants should be charged duty as per 1C of the Notification, considering the specific circumstances of the case and the relevant legal provisions.The Tribunal also highlighted that the CBEC Circular and previous decisions supported the appellants' position, emphasizing that cement cleared for self-consumption could not be considered as retail sales under the PC Rules. Therefore, the Tribunal ruled in favor of the appellants, stating that the impugned order was not maintainable under the law. Consequently, the appeal was allowed with any necessary consequential relief granted.