2023 (6) TMI 695 - AT - Central Excise

Supreme Court: Ready Mix Concrete not exempt. Tribunal accepts extended limitation argument. Show cause notices time-barred.

The Supreme Court held that Ready Mix Concrete (RMC) does not qualify for exemption under Notification No.4/1997-CE as it is distinct from Concrete Mix ... Exemption from Excise Duty or not - manufacture of Ready Mix Concrete - whether RMC can be considered as ‘Concrete Mix’ and the exemption as per Notification No.4/1997-CE dated 01.03.1997 would be available? - extended period of limitation - HELD THAT:- The issue on merits stands covered against the assessee by the decision in the case of M/S LARSEN & TOUBRO LTD. & ANOTHER, ECC CONSTRUCTION GROUP VERSUS COMMISSIONER OF CENTRAL EXCISE, HYDERABAD [2015 (10) TMI 612 - SUPREME COURT] - It has been categorically held by the Hon’ble Apex Court that Notification No.4/1997-CE dated 01.03.1997 exempts only ‘Concrete Mix’ (CM) and that the said exemption is not available to “Readymade Mix Concrete” (RMC) manufactured at site and that RMC and concrete mix are not one and the same. The issue on merits is therefore held against the assessee and in favour of the Revenue. Time Limitation - HELD THAT:- From the dates and events of the litigation, it is established that the issue as to whether RMC is also eligible for the Exemption Notification No.4/97-CE, other notifications and whether RMC and concrete mix are one and the same was under confusion and was under litigation before various forums. Also the department has not been able to establish with cogent evidence that there is any positive act of suppression on the part of the appellant with intent to evade payment of duty. The details for demand of duty has been derived from the accounts and documents furnished by the appellant. In the case of M/S CONTINENTAL FOUNDATION JOINT VENTURE SHOLDING, NATHPA HP VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-I [2007 (8) TMI 11 - SUPREME COURT] the Hon’ble Apex Court allowed the plea of the assessee that the SCN is time barred as there were no grounds to invoke extended period and also because there were doubts as to whether RMC is a dutiable product. Thus, SCNs issued invoking the extended period in these appeals are time-barred and therefore cannot sustain. The impugned orders are set aside on the ground of limitation. Appellants succeed on the ground of limitation. Issues Involved:1. Merits of the case regarding the classification and exemption eligibility of Ready Mix Concrete (RMC).2. Invocation of the extended period of limitation for the demand of duty.Summary:Merits of the Case:The appellant, engaged in the construction business, manufactured Ready Mix Concrete (RMC) at their construction sites without obtaining Central Excise registration or paying Central Excise duty. The Directorate of General of Goods and Service Tax Intelligence, Trichy, initiated an investigation based on intelligence that the appellant cleared RMC without paying the required duty. The appellant argued that RMC was used entirely for captive consumption and not sold, hence they believed it was not subject to excise duty.The Hon'ble Supreme Court in Larsen & Toubro Ltd. ECC Construction Group Vs CCE Hyderabad - 2015-TIOL-236-SC-CX held that RMC is not the same as Concrete Mix (CM) and that Notification No.4/1997 dated 01.03.1997 exempts only 'Concrete Mix' and not 'Ready Made Mixed Concrete'. Consequently, the issue on merits was decided against the assessee, affirming that RMC does not qualify for the exemption under Notification No.4/1997-CE.Extended Period of Limitation:The appellant confined their arguments to the ground of limitation, asserting that the issue was contentious and interpretational, hence the extended period for raising the demand should not apply. They provided a timeline of litigation events to demonstrate the ongoing confusion and differing judicial opinions regarding the classification and duty liability of RMC.The Tribunal noted that the issue had been under litigation and was interpretational, referencing several cases where similar issues were resolved in favor of the assessee on the grounds of limitation. The Tribunal observed that the department failed to establish any positive act of suppression by the appellant with the intent to evade duty. The details for the demand were derived from the appellant's own accounts and documents.The Tribunal cited the Supreme Court's decision in Continental Foundation Jt. Venture Vs CCE, Chandigarh - 2007 (216) ELT 177 (SC), which emphasized that mere omission to provide correct information is not suppression unless it is deliberate to evade duty. The Tribunal also referred to other cases where demands were set aside on similar grounds.Conclusion:The Tribunal concluded that the show cause notices issued invoking the extended period were time-barred and could not sustain. Therefore, the impugned orders were set aside on the ground of limitation, and the appeals were allowed with consequential relief as per law. The judgment was pronounced in open court on 16.06.2023.