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Shri Rajesh Gupta, Managing Director, M/s Sand Plast India Ltd. Versus CCE, Delhi -II

2015 (9) TMI 90 - CESTAT NEW DELHI

Waiver of pre deposit - manufacture of sand lime bricks known as calcium silicate bricks - fly ash bricks or not - using 50% by weight of pond ash as filler - Exemption under Notification No. 5/06-CE and 6/06-CE till 28/2/11 - Held that:- when in the Central Excise Tariff there is no definition of a term in a tariff entry, its meaning as understood in the commercial parlance or trade parlance has to be adopted and for this purpose, one has to rely on the how the product is described in the ISI S .....

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to use at least 25% fly ash. Though, admittedly the weight of the fly ash used in the form of pond ash is 50% and admittedly, the pond ash contains moisture and, the total weight of the ash being used in the manufacture of bricks would be much less than 50% and as such, it cannot be said that the fly ash is the pre-dominant constituent. - Partial stay granted. - Excise Stay Application No. 54808 of 2014 in Appeal No. 54187 of 2014 , Excise Stay Application No. 55178 of 2014 in Appeal No. 54520 .....

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from the Thermal Power Plant. Earlier, the appellant's unit was located at Behrod in Rajasthan, where they were manufacturing the sand lime bricks by using sand and lime. Such bricks are also known as calcium silicate bricks and are required to conform to the IS specifications 4139-1989. Subsequently when they re-located so the unit to the present location, on account of the Notification dated 14th September 1999 of the Ministry of Environment and Forests, they were under obligation to use a .....

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ement or not specified". They were also availing full duty exemption under Notification No. 5/06-CE and 6/06-CE till 28/2/11 which fully exempted the "sand lime bricks" falling under Chapter 68 or 69. Though w.e.f. 1/3/11 the rate of duty, for sand lime bricks of Chapter 68 or 69 became 1%, the appellant admittedly continued to clear the bricks without payment of duty. The Department is of the view that the bricks manufactured by the appellant are fly ash bricks covered by heading .....

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demand of ₹ 1,16,60,056/- against the appellant along with interest and imposed penalty of equal amount on them under Section 11 AC. Beside this, some stock of bricks seized were also ordered to be confiscated with option to be redeemed on payment of redemption fine. Penalty of ₹ 10,00,000/- was imposed on Shri Rajesh Gupta, Managing Director under Rule 26 of the Central Excise Rules. Against this order of the Commissioner, these appeals have been filed along with stay applications. .....

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rdingly they started using 50% by weight of pond ash for manufacture of the bricks. The other raw material for the bricks were 10 to 20% of lime and the remaining quantity of sand. The bricks being manufactured remain Sand Lime bricks, as the fly ash has been used only as a filler. Since the essential character of the goods does not change with the use of fly ash, the goods would remain classifiable under heading 6810, not under heading 6815. (ii) The appellant's stand from the very beginnin .....

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nd lime bricks shall be made out of finely ground sand/siliceous rock and lime, in addition, limited quantity of fly ash conforming to IS 3812 : 1981 may be used in the mix. He also pointed out to the " forward" to the IS specification which mentions that the fly ash lime bricks are being covered under a separate standard - and the Indian Standard Specification for Fly Ash Lime Bricks is under preparation. He accordingly pleaded that the ISI specification for sand lime bricks permits t .....

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the Appellant are sand lime bricks and not fly ash bricks and on this point, the appellant have strong prima facie case in their favour. He, however, admitted even if their product is to be treated as sand lime bricks, w.e.f. 01/3/11 the appellant would be liable for duty @ 1% and their duty liability would be only about ₹ 3.10 lakhs which the appellant are prepared to deposit for compliance with the provision of Section 35F. 4. Shri Pramod Kumar, the learned Jt. CDR, opposing the stay ap .....

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and even if it is accepted that pond ash contained 15% moisture, there would still be 35% fly ash which would be the pre-dominant constituent and, hence, the bricks would have to be treated as fly ash bricks. (ii) The invoice under which the goods were being sold mentioned the goods as "sand lime fly ash bricks". (iii) It is the fly ash which gives the essential character to the goods, in question, as fly ash is the pre-dominant constituent. (iv) Just because the ISI specification for .....

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es for interpretation of the tariff heading with specific description with prevail description over the heading with general description. 4.1 With regard to limitation, he pleaded that the appellant have suppressed the relevant facts, from the Department and, hence, the longer limitation period of 5 years has been correctly imposed and penalty under Section 11AC has been correctly imposed. 4.2 Shri Pramod Kumar, Jt CDR, therefore pleaded that the appellant duty liability is not confined to the d .....

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89 and are classifiable under heading 68109990 and the heading 68159910 specifically covers "bricks and tiles of fly ash". The exemption Notification No. 5/06-CE (SI. No. 8) and 6/06-CE dated 1/3/06 (SI. No. 8) covered "sand lime bricks of Chapter 68 or 69" and prescribed nil rate of duty. W.e.f. 1/3/11 by Notification No. 1/11-CE, the rate of duty for sand lime of Chapter 68 or 69 became 1%. The fly ash bricks covered by heading 6815 are not covered for exemption under any n .....

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s "sand lime, fly ash bricks" and the appellant, undisputedly, for manufacture of the bricks, in question, use 50% of the wets pond ash and the remaining quantity is of lime and sand the lime being about 20% and sand being about 30%. The Department's contention is that since 50% of the fly ash has been used, the fly ash would be the pre-dominant constituent even after ignoring the moisture contained and hence this fly ash which could give the bricks, their essential character and t .....

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quired size which are put into autoclave. From ISI Standard IS 4139-1989 for sand lime bricks, it is seen that these bricks, also called calcium silicate bricks, they derive their strength from formation of calcium silicate hydrates in crystallized form by the reaction of hydrated lime with active siliceous material and the materials such as ground sand containing mostly quartz, crystallize form of silicate react slowly and require prolonged autoclaving at elevated temperature and pressure of st .....

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cks are generally manufactured by inter-grinding or blending various raw materials which are moulded into bricks and and subjected to curing different temperatures and pressures and that pulverized fuel ash reacts with lime in presence of moisture to form calcium silicate hydrate which is a binder material and thus pulverized fuel ash lime bricks are a chemically bonded bricks. In terms of para 7.1, 7.2, 7.3 and 7.4 of the ISI specification IS 12894 - 2002 the fly ash bricks are supposed to have .....

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