1995 (7) TMI 175 - AT - Central Excise

Summary

Issues: Classification of product as cement under Tariff Item 23, necessity of gypsum in cement manufacturing, definition of cement, determination of duty liability, imposition of penalty.

Classification of product as cement under Tariff Item 23:
The appeal was filed by the department against the order of the Collector of Central Excise (Appeals) regarding the classification of the product manufactured by the respondents. The department contended that the product, a regulated clinker binder, was similar to cement and should be classified under Tariff Item 23 of the Central Excise Tariff. The respondents argued that their product was not cement as gypsum was not used in its manufacture.

Necessity of gypsum in cement manufacturing:
The department argued that while gypsum is commonly used in cement manufacturing to regulate the setting of the product, its use is not essential. The Collector (Appeals) relied on definitions of cement from scientific sources to establish that the presence of gypsum is not a mandatory requirement for a product to be considered cement.

Definition of cement:
Various definitions of cement were presented, emphasizing that gypsum is not a prerequisite for a product to be classified as cement. The McGraw-Hill Encyclopedia of Science & Technology defined cement as a dry powder made from silica, alumina, lime, iron oxide, and manganese that hardens when mixed with water. The Concise Chemical Dictionary provided insights into different types of cements, further supporting the argument that gypsum is not indispensable.

Determination of duty liability and penalty imposition:
The Tribunal found that since gypsum was not used in the manufacturing process of the product in question, it could not be classified as portland cement under Tariff Item 23(1). However, it was classified under Tariff Item 23(2) as a type of cement other than portland cement, such as Sagol or Ash Moh. The matter was remanded to the Assistant Collector for redetermination of duty liability. The Assistant Collector was directed to consider the seriousness of the offense in light of the duty liability for potential penalty imposition.

This detailed analysis of the judgment from the Appellate Tribunal CEGAT, New Delhi, highlights the key issues surrounding the classification of the product as cement, the necessity of gypsum in cement manufacturing, the definition of cement, and the subsequent determination of duty liability and potential penalty imposition.