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Shapoorji Pallonji & Co. Ltd. Versus Commissioner of Central Excise Mumbai

2016 (9) TMI 92 - CESTAT MUMBAI

Classification - Is the product manufactured by the appellant is RMC (Ready mix concrete) or concrete mix and whether benefit of Notification No. 4/97 dated 01.03.1997 is available to the appellant in respect of the product manufactured by them - Held that:- the mix manufactured by the appellant is specially made for Mahindra & Mahindra and is manufactured with precision of a high standard and is delivered to the customer at his site. Thus prima facie it fulfills the criteria identified by the H .....

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nental Foundation Jt. Venture [2007 (8) TMI 11 - SUPREME COURT OF INDIA] is squarely on this issue. Therefore, as the period as well as the issue involved is roughly the same. Relying upon the above said decision of the Hon’ble Supreme Court we hold that the extended period of limitation cannot be invoked in this case. - Decided in favour of appellant - E/2895 to 2897/06 - A/89048-89050/16/EB - Dated:- 3-8-2016 - Mr. M.V. Ravindran, Member (Judicial) and Mr. Raju, Member (Technical) Shri S.S. Gu .....

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matter before the Hon ble Apex Court and the Apex Court vide order dated 19.11.2015, as reported at 2015 (326) ELT 24 (S.C.), has observed as follows:- The Tribunal by way of impugned judgment has allowed the appeals of the respondent/assessee holding that Ready Mix Concrete (RMC) does not amount to manufacture and, therefore, is not liable to excise duty. This Court in M/s. Larsen & Toubro Ltd. & Anr., ECC Construction Group v. Commissioner of Central Excise, Hyderabad, 2015 (10) SCALE .....

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e had challenged those findings before the Tribunal. However, the Tribunal did not go into this aspect as it proceeded on the basis that even if it was RMC produced at site, the same shall be entitled to exemption under the requisite Notification. In view thereof, the matter needs to be remanded back to the Tribunal to decide the aforesaid factual aspect viz. whether the produce in question is RMC manufactured at site or is it MC as contended by the assessee. 3. We may record the submission of M .....

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ed by the Tribunal. However, we make it clear that it will always be open to the appellant/Department to justify the order passed by the Adjudicating Authority on the basis of material which is relied upon by the Adjudicating Authority including the statements of the officials of the assessee and effect thereof. 4. We, thus, allow these appeals, set aside the impugned order and remit the case back to the Tribunal to look into the matter afresh keeping in view our observations. Shri Cyrus P. Mist .....

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crete mix at site and (b) Ready Mix Concrete. 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 weighted, batched by electrical controls and limit switches. Cement from silo is carried to the batching plant by a screw conveyer operated with automatic weighing gauges. Water is fed through flow meters .....

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roduction conforming to the ISI Standard 456-1978, which is produced and used at the site of construction. It is this concrete mixture, manufactured at the site of construction which is fully exempt vide Notification No. 4/97-C.E., dated 1-3-1997 (S. ,N. 51). It is thus clarified that ready mix concrete or pre-mixed concrete, by its very nature, cannot be manufactured at the site of construction and is brought from the factory of manufacturer for use in construction. 2.1 On the strength of above .....

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acturer for use in construction. 2.2 It was argued that in the statement of Shri S.K. Karkhanis, Project Manager of the appellants, the batching plant installed by them did not consist of stone crusher, conveyors, vibrator screen, etc. The learned Counsel argued that the appellants were manufacturing concrete using large batching mixer. He argued that since the plant installed by them was not RMC plant as described in the CBEC Circular (supra), the product manufactured by them could not be treat .....

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n regarding addition of any chemicals to the concrete. He pointed out that Shri S.Y. Karkhanis stated that plasticizers are added only as and when required and no other chemicals are added. He further pointed out that even during cross-examination of Shri S.Y. Karkhanis no evidence regarding of any addition of any retarders (to increase shelf-life) was brought out. He further argued that as per CBEC Circular dated 06.01.1998, RMC cannot be manufactured at site and therefore the product manufactu .....

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ctured at the site of construction is eligible for exemption under Notification No. 4/97-C.E. dated 01.03.1997. He further argued that the cross examination of Shri S.Y. Karkhanis was obtained under duress and he was forced to mention the terms ready mix before the word concrete in his statement. 2.5 He further argued that the entire demand is beyond normal period of limitation. He argued that the there was doubt regarding the taxability on RMC and its eligibility to its exemption. He relied on .....

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t in a subsequent larger Bench judgment. It is, therefore, clear that there was scope for entertaining doubt about the view to be taken. The Tribunal apparently has not considered these aspects correctly. Contrary to the factual position, the CEGAT has held that no plea was taken about there being no intention to evade payment of duty as the same was to be reimbursed by the buyer. In fact such a plea was clearly taken. The factual scenario clearly goes to show that there was scope for entertaini .....

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or Rules are again qualified by the immediately following words with intent to evade payment of duty. Therefore, there cannot be suppression or mis-statement of fact, which is not wilful and yet constitute a permissible ground for the purpose of the proviso to Section 11A. Mis-statement of fact must be wilful. 3. Learned A.R. relied on the CBEC Circular No. 315/31/97-CX dated 23.05.1997 to assert that ready mix concrete even if manufactured at the site of construction is liable to duty. He part .....

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need to be decided are - (a) is the product manufactured by the appellant is RMC (Ready mix concrete) or concrete mix, (b) whether benefit of Notification No. 4/97 dated 01.03.1997 is available to the appellant in respect of the product manufactured by them, (c) whether extended period of limitation can be invoked in the instant case. 4.1 The product manufactured by the appellant is concrete and is manufactured at the site. The product contains plasticizers but does not contain retarders. While .....

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MC. Even when doubts were raised from time to time about the two products, Government has always been clarifying and emphasizing that the two products are different and RMC attracts excise duty and is not covered by the exemption notification. The classification entries have also been enacted accordingly. We may also mention at this stage itself that the duty which was demanded from L&T by issuing show-cause notices cover the period from May 2, 1996 to February 28, 1997 and from March 1, 199 .....

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be manufactured at the site of construction; that chemicals/retarders are not used in site mix concrete. Further, we also find from Order-in-original as well as order passed by the Tribunal that the assessee always accepted that what was being produced was RMC and claimed exemption only on the ground that it was manufactured at the site of construction and captively used. Even in the writ petition filed by the assessee in the High Court of Madras [2006 (198) E.L.T. 177 (Mad.)], the assessee its .....

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ite itself and they have to be cleared and sold to various other construction companies. The product is transported through the vehicle fitted with mixing drum specifically designed to carry Ready Mix Concrete from the petitioner s unit to various concrete sites. The product is marketable, transportable and eventually available for sale. 4. The product concrete mix was not specified anywhere in Chapter 28 of the Central Excise Tariff Act, 1995. It was classified under Chapter sub-heading 38.23. .....

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ersion. Concrete mix obtained from these batching plants was delivered into a transit mixer mounted on a self propelled chassis for delivery at the site of 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 co .....

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iff 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 - what is ready mix concrete, appearing in internet website of National Ready Mix Concrete Association, USA :- (i) Concrete, in its freshly mixed state, is .....

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ow cost and its ability to be customized for different applications, Ready Mix Concrete is one of the world s most versatile and popular building materials. (iii) Admixtures are generally products used in relatively small quantities to improve the properties of fresh and hardened concrete. They are used to modify the rate of setting and strength, especially during solid and cold weather. The most common, is an air-entraining agent that develops millions of tiny holes in the concrete, which impar .....

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ventionally produced. The position which was summed up showing that the two products are different reads as under : From the literature quoted above it is clear that Ready Mix Concrete is an expression now well understood in the market and used to refer to a commodity bought and sold with clearly distinguishable features and characteristics as regards the plant and machinery required to be set-up for its manufacture and the manufacturing processes involved, as well as its own properties and the .....

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MC 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 cover .....

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has discarded the proposition as RMC cannot be manufactured at site. In para 20 of the order the Hon ble Supreme Court differentiates between RMC and concrete mix in the following terms. It clearly states that RMC refers to concrete specially made with precision and of a high standard and as per the particular needs of a customer and delivered to the customer at his site. In the instant case the mix manufactured by the appellant is specially made for Mahindra & Mahindra and is manufactured w .....

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the decision of the Hon ble Supreme Court in the case of Continental Foundation Jt. Venture (supra) is squarely on this issue. In the said decision the Hon ble Apex Court has observed as follows:- 11. Factual position goes to show the Revenue relied on the circular dated 23-5-1997 and dated 19-12-1997. The circular dated 6-1-1998 is the one on which appellant places reliance. Undisputedly, CEGAT in Continental Foundation Joint Venture case (supra) was held to be not correct in a subsequent larg .....

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