TaxTMI 
TaxTMI 
2024 (2) TMI 72
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....under Section 11AC of the Act is therefore not sustainable. Hon'ble CESTAT, Mumbai in an identical case of Shapoorji Pallonji & Co. Ltd. vs. CCE, Mumbai, as reported in 2016 (344) E.L.T. 1132, has held as under:- Concrete - Ready Mix Concrete (RMC) vis-à-vis concrete mix - Exemption - Notification No.4/97-C.E., dated 01.03.1997 - Settled by Apex Court in 2015 (324) E.L.T. 646 (S.C.) that both aforesaid products are different and that even RMC can also be manufactured at site - Instant case, mix manufactured with precision of high standard and delivered to customer at his site - Said product therefore appropriately to be called RMC and not concrete mix - Exemption under impugned notification not available.[para 4.2, 4.3]. Accordingly, extended period of was not available for raising the demand. The demand raised vide SCN dated 30.05.2017 for the period June 2013 to May 2015 was therefore, time barred and was liable to be set aside on the ground of limitation alone. 6.2 The appellant has submitted that he was under the bonafide belief that he was not engaged in the manufacture of the excisable goods and was accordingly, paying service tax @ 4% on the taxable ....
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....da is allowed." 2.1 Respondent is a construction company. For their own use they manufacture concrete mix/ ready mix concrete which is used by them at their own sites. Revenue was of the view that this concrete mix is subject to levy of excise duty accordingly a show cause notice dated 30.05.2017 was issued to the Respondent asking them to show cause as to why :- (i) Central Excise Duty amounting to Rs.1,20,55,391/- (Rupees One crore twenty lac fifty five thousand three hundred ninety one only) including cesses, not paid by them on the RMC manufactured onsite and used in the construction of such site during the period 2013-14 (June, 2013) to 2015-16 (up to February, 2016), should not be demanded under Section 11A of the Central Excise Act, 1944; (ii) Interest on the duty as demanded at (i) above should not be recovered under section 11AA of Central Excise Act, 1944; (iii) Penalty should not be imposed upon them under Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944 for contraventions of the provisions of law as discussed supra; 2.2 Show cause notice was adjudicated by Order-in-Original dated 30.11.2017....
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....ly based on the judgement of the Supreme Court in the case of Continental Foundation Jt. Venture. It is to be noted that the demand in the case of Continental Foundation Jt. Venture, relates to the period 1997-1998 i.e. the period before the clarification by CBEC in 1998, thereby canvassing scope for entertaining doubt, the Supreme Court has extended the benefit of limitation to the assessee. The period involved in the said cases (cited by Commissioner (Appeal)) is 1997-98 i.e. prior to issuance of the clarification, therefore, said case laws are not applicable in the instant case. Hence, the Commissioner (Appeal) appears to have committed substantial error of law in interpreting the judgement of the Apex Court in case of M/s L&T as discussed above. 3. The Commissioner (Appeals) has cited several judgements in Para 6.3 of its Order - Chief Engineer, Ranjit Sagar Dam Vs Commr. of Central Excise, Jalandhar (Tribunal-L.B. New Delhi) and Commr. of Central Excise, Jalandhar Vs M/s Chief Engineer, Ranjit Sagar Dam (Punjab and Haryana High Court), to hold that the issue stood in favour of the assessee prior to the 2015 as per L&T Judgement of the Supreme Court and that the RMC was held en....
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....ugh it is manufactured at the site of construction, is chargeable to excise duty under sub-heading No.3824.20 of the Central Excise Tariff Act, 1985. The exemption for CM manufactured at the site of construction for use in construction work at such site available under Notification No.4/97-C.E., dated March 1, 1997 is not applicable to RMC manufactured at the site of construction. L&T had challenged this interpretation in the circular by filing a writ petition in the High Court of Madras. Before the High Court, the Additional Central Government standing counsel specifically took a stand that excise duty is not leviable on RMC if it is manufactured at the site of construction. It was, thus, argued that the Revenue was bound by the aforesaid concession given in the Court. 8. Before we advert to the submissions made by Mr. Sahu attacking the aforesaid approach of the Tribunal, we deem it proper to refer to the legal provisions : Prior to March 1, 1997 „Concrete Mix‟ was classified under Chapter 68 --- sub-heading 68.07 of the Central Excise Tariff Act as applicable for the year 1996-1997. In terms of Notification No.8/96-C.E., dated July 23, 1996, followi....
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....cription of RMC. In Circular dated August 12, 1996 issued by the Board, it is explained that the Ready Mix Concrete plant consists of stone crushers, conveyors, vibrator screen to segregate different sizes of stone aggregates, and a sand mill to produce sand from stones. A central batching plant is also installed in which all aggregates are weighed, batched by electrical controls and limit switches. Cement from site is carried to the batching plant by a screw conveyer operated with automatic weighing gauges. Water is fed through flow meters after subjecting such water to chemical analysis. The mixture of stone aggregates, sand, cement and water is mixed in a mixer. The mixture so obtained is loaded on a transit mixer mounted on truck chassis, which is transported to the site of the customers and the same is discharged at site for use in further construction of building etc. The qualities accruing to the Ready Mix Concrete so obtained far out weigh to those of the site mixed concrete. The final product Ready Mix Concrete is a material in plastic, wet process state and not a finished product like blocks or precast tiles or beams. 12. This Circular further clarifies that RMC ....
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....CH 38 is enclosed. For this reason, and also the fact that the product-wise there is no difference between ready mix concrete and concrete mix, this Court in CCE, Belapur v. Simplex Infrastructures Ltd. - 2008 (225) E.L.T. 338 (S.C.) has held that ready mix concrete produced at the site of construction is entitled to exemption. (iv) Prior to March 1, 1996, this Court has upheld the position that ready mix concrete was classifiable under CH 68.07. (Associated Cement Co. Ltd. v. CCE, Mumbai - 2001 (138) E.L.T. 911) upheld by this Court in CCE, Mumbai v. Associated Cement Co. Ltd. - 2001 (132) E.L.T. A106 (S.C.). All goods manufactured under this heading at the site for use in the construction at such site was all along exempt from duty. From March 1, 1997, ready mix concrete has been inserted in CH 38.2420. If ready mix concrete and concrete mix are two different things only ready mix concrete was not taken to CH 38. Therefore, concrete mix (manufactured at the site of construction) remained in CH 68.07 and was exempt under Notification No. 4/97-C.E. (Serial No. 68.2). Even otherwise, Serial No. 51 of this notification exempts concrete mix falling under CH 38, if manufacture....
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....cation. We may state that the word „site‟ has not been defined in the Notification though it so defined in the later Circular. We may also state that with the advancement of technology, there could exist batching plants which are mobile. Ultimately, the question which would arise for determination would depend upon the facts of each case. In the present case, the Commissioner, as an adjudicating authority, has held that cement concrete obtained at Pen and Padghe sites conforms to the definition of RMC. However, according to the Commissioner, the respondent-assessee has manufactured RMC during the above period in the said places, namely, Pen and Padghe and, thereafter, they have cleared the same to the construction sites of the customers/clients of the assessee herein without payment of central excise duty and without observing the central excise formalities." ..... 18. We may point out at the outset that the case which is now sought to be set up by the assessee, namely, CM and RMC are one and the same product, was never the case of the assessee. On the contrary, in reply dated June 12, 1998 to the letter dated May 18, 1998 issued by the Assistant Commi....
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.... construction is in a plastic condition requiring no further treatment before being placed in the position in which it is to set and harden. The prepared chassis which was mounted was to ensure that when the concrete mix is taken to the actual place of construction, it keeps rotating. It is also significant to mention that for producing the concrete mix, material used was cement, aggregates, chemically analysed water and admixtures, namely, retarders and plasticizers. As the L&T was constructing cement plant of a very high quality, it needed concrete also of a superior quality and to produce that aforesaid sophisticated and modernised process was adopted. The adjudicating authority in its order explained the peculiar feature of RMC and the following extracts from the said discussion needs to be reproduced : "32. Central Excise Tariff does not define Ready Mix Concrete. Therefore, as per the established case-laws on the subject it is necessary to look for the meaning of this expression as understood in the market viz., as understood by the people who buy and sell this commodity. In this connection it would be relevant to refer to the following excerpts from an article - wha....
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....y due to the large demand resulting from rapid urbanization and pressure of completing projects on time, consumption of RMC has steadily grown replacing the conventional/manual concreting works. Today leading cement companies have entered the field by setting-up RMC plants in which L&T ECC is one. RMC is slowly replacing site or hand mixed concrete because of the distinct advantages due to technology, speed and convenience. Furthermore, absence of the need to deal with multiple agencies for procuring and storing cement, sand, blue metal and water as well as the absence of the need to handle unorganized labour force are factors influencing customers to go in for RMC in preference to CM." 21. In this backdrop, the only question is as to whether RMC manufactured and used at site would be covered by notification. Answer has to be in the negative inasmuch as Notification No. 4, dated March 1, 1997 exempts only „Concrete Mix‟ and not „Ready Made Mixed Concrete‟ and we have already held that RMC is not the same as CM. 22. In Simplex Infrastructures Limited case, this Court had not delved into the issue at hand at all except stating that, "if RMC i....