2007 (4) TMI 272 - HC - Central Excise

Court Upholds Excise Duty Exemption for Concrete Mix in Dam Construction; Revenue Appeal Dismissed for Lack of Merit.

COMMR. OF C. EX., JALANDHAR Versus CHIEF ENGINEER, RANJIT SAGAR DAM

The HC dismissed the revenue's appeal, upholding the Tribunal's decision that the assessee is entitled to an exemption from excise duty under Notification ... Exemption from payment of excise duly - Concrete mix as against read mix concrete - HELD THAT:- We are of the considered view that the appeal lacks merit and is thus liable to be dismissed. There are categorical findings recorded by the Tribunal that in the construction of Ranjit Sagar Dam mixed concrete used to be prepared at site. It is only on account of hilly area that the plant was kept at some distance would not be necessarily bring the production of mixed concrete within the mischief of taxable entry reproduced by item No. 3824.20. The view taken by the Tribunal does not suffer from any legal infirmity warranting out interference. Accordingly, the appeal fails and the same is dismissed. Issues involved:1. Entitlement to exemption from payment of excise duty for using concrete mix instead of ready mix concrete.Analysis:The appeal under Section 35G of the Central Excise Act, 1944 challenges the order passed by the Customs, Excise and Service Tax Appellate Tribunal regarding the exemption from excise duty for using concrete mix. The main issue is whether the assessee is entitled to exemption under Notification No. 4/97-C.E. for using concrete mix in the construction of a dam instead of ready mix concrete. The revenue contended that the concrete mix used should be classified under a specific tariff subheading and demanded payment of duty for the period in question, along with imposing penalties and interest.The Tribunal analyzed the exemption granted under the notification, emphasizing that the exemption for 'concrete mix' manufactured at the site of construction for use in construction work should not be narrowly interpreted to exclude ready mix concrete. It noted that the location constraints at dam sites might necessitate the concrete mixing plant to be situated away from the actual construction site, but this should not disqualify the concrete mix from the exemption. The Tribunal highlighted that the wording of the notification aimed to cover all types of concrete mix falling under Chapter 38, without specifically excluding ready mix concrete. It referenced a High Court order supporting the view that ready mix concrete manufactured at the construction site is eligible for exemption under the notification.The revenue argued that the production of mixed concrete by the assessee should be considered as ready mix concrete, which is excisable. However, the Court disagreed, stating that the mixed concrete prepared at the construction site for the dam did not fall under the taxable category specified under item No. 3824.20. The Court upheld the Tribunal's findings that the concrete mix used by the assessee was exempt under the notification, dismissing the appeal for lack of merit.In conclusion, the judgment clarifies the interpretation of the exemption notification regarding the use of concrete mix in construction activities and affirms that ready mix concrete manufactured at the construction site is eligible for exemption from excise duty under the specified conditions.