Site-based exemption for ready mix concrete failed, while personal penalty on the Director was set aside for lack of intentional involvement.

Ready mix concrete qualified for exemption under Notification No. 4/97-CE only if manufactured at the construction site; on the evidence of panchanamas, site plans and related material, the batching plants were found to be at a different location from the construction sites, and the assessee failed to rebut those findings, so the demand against the company was sustained. Personal penalty on the Director under Rule 209A of the Central Excise Rules, 1944 required evidence of intentional or conscious involvement in the wrongful availment of exemption; in the absence of such material, the penalty could not be sustained and was set aside.

---

---

Issues: (i) Whether ready mix concrete was manufactured at the construction site so as to qualify for exemption under Notification No. 4/97-CE dated 01.03.1997. (ii) Whether the penalty imposed on the Director under Rule 209A of the erstwhile Central Excise Rules, 1944 was sustainable.

Issue (i): Whether ready mix concrete was manufactured at the construction site so as to qualify for exemption under Notification No. 4/97-CE dated 01.03.1997.

Analysis: The limited question after remand was whether the ready mix concrete had been produced at the construction site or at Pen and Pagdhe and then moved to the site. On appreciation of the panchanamas, site plans and other material, the adjudicating authority recorded that the batching plants were not co-located with the construction sites, and that the mixing activity occurred at a distinct place from where construction was carried on. The assessee did not produce evidence to displace those findings. The exemption was available only where the concrete was produced at site.

Conclusion: The exemption under Notification No. 4/97-CE was not available and the demand against the company was sustained.

Issue (ii): Whether the penalty imposed on the Director under Rule 209A of the erstwhile Central Excise Rules, 1944 was sustainable.

Analysis: The record did not disclose specific evidence showing the Director's intentional participation in the alleged wrongful availment of exemption. In the absence of material establishing deliberate involvement, imposition of personal penalty was not justified.

Conclusion: The penalty on the Director was set aside.

Final Conclusion: The company failed on the exemption issue, but the personal penalty on the Director could not be sustained for want of evidence of intentional involvement.

Ratio Decidendi: Exemption for ready mix concrete is available only when the concrete is manufactured at the construction site, and a personal penalty cannot be imposed without evidence of conscious participation in the contravention.

---