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TMI Blog1996 (9) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner earlier filed M.P. No. 4325 of 1991 and a Division Bench of this Court by order dated February 18, 1994 disposed of the writ petition with the following direction: "(1) The second respondent shall after giving an opportunity of hearing to the petitioners, record a decision as to whether refractory is a form of cement subject to export tax or a product of cement subject to export tax or not, and communicate the decision to the petitioners; (2) Till such decision is arrived at, the petitioner shall not be compelled to pay export tax on refractory exported up to October 30, 1993 subject to the condition that the petitioners filed affidavit before the second respondent within two weeks from today agreeing to pay arrears of tax in case the decision as aforesaid goes against them; and (3) The second respondent shall record the decision within 30 days from today." Thereafter, as directed by this Court the Administrator vide its order dated March 30, 1994 held that the petitioner manufactured high alumina binder (refractory) which, in fact is high alumina cement and as such liable for export tax, in view of the aforesaid resolution of the Municipal Corporation. The petitioner i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r manufacture of cement the main raw material is limestone, silicious clay and gypsum; bauxite and fire clay are not used for the manufacture of cement. However, for manufacture of refractories the major raw material is bauxite, kyanite and fire clays. 8. According to the petitioner, the chemical composition of cement is entirely different from that of refractories. The criteria of test for a normal cement, according to the petitioner, is different from those for refractories. It is the stand of the petitioner that for constructional cement the most important criteria is its strength at ordinary temperature, whereas for the refractory materials the criteria is its refractoriness at high temperature, technically called P.C.E. value and the temperature at which the material gets its strength. According to the petitioner the skills required in the cement plant and those required in refractory plant is also entirely different. The petitioner has given the comparative table of the raw materials, process of manufacture, etc., to demonstrate that the refractory is not a type of cement. It is as follows: COMPARATIVE TABLE Cement industry Refractory industry Raw materials: 1. Limest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s used for the purposes of carrying out ordinary construction work. Refractory has its uses in special fields and this difference in application is basically due to the character of the two. However, according to the answering respondent the basic feature of both remains the same. It is the stand of the respondents that the products manufactured by the petitioner are classified in two heads that is shaped items and unshaped items and export tax is being levied only on unshaped items. It is their stand that unshaped items include the product termed as high alumina refractory binder. It is contended by the respondents that the refractory is only a name under which the petitioner-company markets the product high alumina cement. (Underlining* mine) 11.. Further stand of the answering respondent, in the return, is that the company is paying Central excise duty on the product high alumina refractory binder which is an item on which Central excise is recoverable under the head "salt, sulphur, clay and stone, plastering materials; lime and cement" as enumerated in chapter 25 of the Excise Manual. The answering respondent states that the petitioner cannot be permitted to blow hot and cold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d it is used in specified field. Thus reference is required to be made to dictionaries and scientific book to understand the same. 16.. Various dictionaries have defined the expression cement in the following terms: Chamber English Dictionary-1989 Indian Edition: "Anything that makes two bodies stick together, mortar;" Websters New International Dictionary "A substance used in a soft or pasty state to join stones or bricks in a building, to cover floors, etc., which afterwards becomes hard like stone; esp., a kind of strong mortar made with lime, or a calcined mixture of clay and limestone." Randum House Dictionary- "Cement (si ment), n. l. any of various soft, sticky substances that dry hard or stonelike, used esp. for making things adhere. 2. any of various calcined mixtures of clay and limestone, usually combined with an aggregate to form concrete, that are used as building material." 17.. In concise Oxford Dictionary, VIIth Edition the cement has been defined as follows: "Cement: Substance applied as paste and hardening into stony consistence for binding together stones or bricks and for forming floors, walls, etc., strong mortar of calcined lime and clay. (Hydrauli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ives. Cements are finely ground powders that when mixed with water, set to a hard mass, setting and hardening result from the hydration of the cement compounds, giving submicroscopic crystals or a gel like material with a high surface area. Cements may be used alone (i.e., 'neat' as grouting materials), but the normal use is in mortar and concrete in which the cement is mixed with inert material known as aggregate. Mortar is cement mixed with sand or crushed stone less than 3/16 inch (4.8 millimetres) in size. Concrete is a mixture of cement, sand or other fine aggregate, and a coarse aggregate that for most purposes is up to ¾ or 1 inch (1.9-2.5 centimetres) in size but that may also be as large as 6 inches (15 centimetres) for concrete place in large masses, as in dams, mortars are used for binding bricks, blocks, and stone in walls or as surface renderings. Concrete is used for a large variety of constructional purposes (see concrete). Mixtures of soil and portland cement are used as a base for roads. Portland cement also is used in the manufacture of asbestos cement sheets, pipes, tanks and other goods. The products are made in a factory and supplied ready for installa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m sand or quartzite), zircon (for extreme heat resistance), and fire clay (made by baking kaolin) are acid; magnesite and dolomite are alkaline; high aluminal refractories, mullite, chromite, silicon carbide, and carbon are neutral. Carbon is an excellent refractory in places where no oxygen can contact it, as in the hearth of a blast furnace. A smelting furnace lining must Here italicised. be acid if the slag is acid and basic if the slag is basic, so that it will not react and be eroded." 20.. Thus, in my opinion refractory is a material which has the ability to retain its chemical property when subjected to high temperature. High alumina is refractory material which is chemically neutral and has ability to retain its physical property when subjected to high temperature. The petitioner on his own showing is manufacturing "high alumina refractory binder", which will mean that the high alumina is used as binder for refractory and this is a kind of cement. Thus, I negative the submission of Shri Sanghi that "refractory high alumina binder" is not a type of cement. By way of caution I may state that each and every refractory may not necessarily come within the expression type of ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven at the cost of repetition I may state that there are refractories which are not cement for instance cumicrete considered in the Madras judgment, but high alumina although a refractory material, is a type of cement. Every refractory may not be cement, but product like high alumina is a type of cement. 23.. Allahabad High Court in the case of Commissioner of Sales Tax v. Mango Mal Nanak Ram [1974] 33 STC 556, had the occasion to consider this aspect of the matter. In the said case question referred for opinion was "whether on the facts and in the circumstances of the cases, white cement, refractory cement and cement are the same commodity and the turnover of white cement and refractory cement should have been taxed as turnover of cement at 7 per cent under Notification No. ST-6438/X-1012-1962 dated December 1, 1962?" While answering the aforesaid question, the court held as follows "The word 'cement' not having been defined in the Act or in the Rules, it has to be understood as in common parlance. Cement is a commodity of everyday use. White cement is only a special variety of ordinary cement which is grey in colour. Ordinary cement is most extensively used as a building materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine the relief sought for by petitioner. The petitioner is paying Central excise duty on the product high alumina refractory binder under item salt, sulphur, clay and stone, plastering material: Lime and Cement as contained in chapter 25 of the Excise Manual. This may not be decisive but the said fact has not been disputed and the petitioner has accepted the liability to pay the Central excise under the aforesaid head, I am of the view, that in the facts of the present case, the petitioner cannot wriggle out from the liability under the notification in question. Thus, I do not find any merit in this writ petition. 28.. M.P. No. 1513 of 1994: In this writ petition also the stand of the petitioner is that the water proofing compound sold under the brand name Accoproof does not come within the expression any type of cement and, therefore, the petitioner is not liable to pay export tax under the resolution referred to above. The petitioner made a grievance about the same before the answering respondent, but the same has been negatived. 29.. According to the petitioner the product in question is neither a cement nor it is a kind of cement nor it is sold as such. It is the stand of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehalf of the answering respondent submits that the finding recorded by the Assistant Collector is not binding on the answering respondent and he further submits that the finding arrived at by the Assistant Collector is also not sustainable on principle. He submits that the petitioner-company itself advertises its product Accoproof and explains the use of its product on packing plastic cover as under: "Waterproofing compound: Accoproof, the cement waterproofing compound contains a water repellent admixture which fills the pores in concrete or cement mortar and prevents the passage of water. It acts as an additional safeguard against leaks. " 33.. Shri Agrawal referring to the own admission of the petitioner in the cover of the product itself submits that the petitioner itself understood the product to be a kind of cement and, therefore, it is liable to pay export duty under the heading all types of cement. 34.. Various meanings of the word "cement" has been reproduced in the preceding paragraph of this order. A reading thereof makes it plain that the cement is an adhesive substance used as binding material and used for many different purposes. According to the petitioner's own pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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