Classification of Ready Mix Concrete versus concrete mix for excise liability requires proof of manufacturing process and standards compliance

Classification of ready mix concrete versus concrete mix for excise liability is the central issue. The legal basis was that exemption was extended to ready mix concrete by a substitution in the exemption notification, but classification requires admissible evidence of manufacturing process and compliance with applicable IS standards. The respondent failed to verify contractual terms and technical compliance, and the adjudicator erred in presuming the product was RMC without proof; accordingly the confirmation of excisability as RMC was unsustainable for lack of evidentiary foundation and proper verification.

---

---

Issues: (i) Whether the goods produced at the batching plants are "Ready Mix Concrete (RMC)" liable to excise duty or are "concrete mix" exempt when produced/used at construction site; (ii) Whether the appellant is the manufacturer liable to duty or the subcontractor who installed and operated the batching plants is the proper person to be held liable;

Issue (i): Whether the impugned product is classifiable as Ready Mix Concrete (RMC) attracting excise duty or as concrete mix manufactured at site and exempt under the notifications.

Analysis: Classification hinges on the process and features of production: RMC conforms to IS 4926 and requires integrated automated batching, quality controls, and factory production/transport; concrete mix as per IS 456 is conventionally produced and used at the construction site and is the subject of Notification No. 04/1997-CE. Circular No. 368/1/98-CX and Board Circular No. 237/71/96-CX provide that the process of preparation determines whether the product is RMC or on-site concrete mix. Absence of admissible evidence as to the manufacturing process and compliance with RMC standards precludes treating the product as RMC. Substitution in Notification No. 12/2016-CE extended exemption to RMC, and amendments by substitution apply retrospectively where applicable.

Conclusion: The product cannot be held to be RMC in the absence of evidence that it was manufactured as per RMC standards and process; classification as RMC is unsustainable and the impugned finding is set aside.

Issue (ii): Whether the appellant, having subcontracted the work, can be held as manufacturer liable to excise duty for production at the subcontractor's plants.

Analysis: Liability to excise as manufacturer depends on who undertook and controlled the manufacturing activity. Contractual allocation of responsibilities to the subcontractor and statements indicating that subcontractor installed and operated the plants are material. In the absence of evidence demonstrating that the appellant controlled or carried out the manufacture, duty cannot be confirmed against the appellant.

Conclusion: The appellant is not the maker of the goods for excise liability on the available evidence; any demand should be directed to the entity that actually manufactured the product.

Final Conclusion: The impugned order confirming excise duty and penalties is unsustainable for want of admissible evidence on process-based classification and for lack of basis to fasten manufacture liability on the appellant; the appeal is allowed with consequential relief in law.

Ratio Decidendi: Classification between RMC and on-site concrete mix is determined by the manufacturing process and compliance with applicable IS standards; absent admissible evidence that production met RMC process standards, excise duty cannot be sustained and liability cannot be imposed on a party who did not demonstrably undertake the manufacture.

---