TMI Blog2022 (3) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... Mix only and not to the Ready Mix Concrete. In view of the above judgment, it is clear that the assessee s product i.e. Ready Mix Concrete (RMC) is not eligible for exemption under Notification No.12/2012-CE dated 17.03.2012 (Sl.No.144) which is pari materia to the exemption entry provided in Notification No.4/97-CE involved in the case of LARSEN TOUBRO. Extended period of limitation - Suppression of facts - HELD THAT:- There is absolutely no suppression of fact on the part of the assessee with intent to evade payment of duty therefore, the judgments relied upon by the Revenue are not applicable in the facts of the present case. Accordingly, the entire demand is under extended period i.e. from April, 2014 to September, 2015 and April, 2016 to June, 2017 whereas, the Show Cause Notice was issued on 15.04.2019 therefore, the entire demand is time barred. The adjudicating authority had rightly extended the benefit of exemption notification in respect of Ready Mix Concrete (RMC) used by the assessee in their manufacturing premises for construction work hence, the demand for the period April, 2016 to June, 2017 was rightly dropped by the adjudicating authority on the ground of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how Cause Notice also relied upon the CBEC Circular No.315/37/97-CX dated 23.05.1997 wherein, it was clarified that Concrete Mix and Ready Mix Concrete are two separate and distinguishable manufactured goods, the exemption was specifically given to the goods namely concrete mix only. It was contended that the ready mix concrete manufactured and cleared captively is different from concrete mix hence, the exemption is not available accordingly, it was proposed to demand the excise duty on Ready Mix Concrete along with interest and also proposed to impose penalty. The show cause notice invoked extended period of limitation as per the proviso to Section 11A. 1.1 The adjudicating authority passed the adjudication order dated 23.10.2019 which is impugned herein. By the said Order, the demand of ₹ 41,74,42,183/- was confirmed under Section 11A of the Central Excise Act, 1944 however, demand of ₹ 8,31,68,920/- was dropped by extending the benefit of exemption notification No.12/2016-CE. The impugned order also demanded interest under Section 11AA and also imposed penalty of ₹ 41,74,42,183/- under Section 11AC of the Central Excise Act, 1944. 1.2 Being aggrieved by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r words, the overruling of a judgment will only have a prospective effect. In view thereof, in the instant case as well, the judgment of the Apex Court in the case of SIMPLEX (Supra) as also the judgment of the Hon ble Punjab Haryana High Court in the case of RANJIT SAGAR DAM (supra) will hold the field and would be applicable till the judgment of LARSEN AND TOUBRO (supra) was passed by the Hon ble Supreme Court being dated 16.10.2015. Thus, no demand of excise duty could have been confirmed against the assessee for the period April, 2014 to September, 2015, being the period prior to the passing of the judgment in the case of LARSEN AND TOUBRO (supra). Reliance in this regard was placed on the order of this tribunal in the case of HINDUSTAN PETROLEUM CORPORATION LTD. Vs. CCE, 2013 (289) ELT 59 (Tri.-Bang). 2.2 Without prejudice to his above submission, he further submits that the adjudicating authority has erred in confirming the demand by invoking the extended period of limitation in the instant case. The adjudicating authority ought to have appreciated that the demand is completely barred by limitation as there was no willful suppression and misstatement of facts on assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of LARSEN AND TOUBRO (supra) shows that there was no scope for entertaining a doubt about the view to be taken in the instant matter. Accordingly, the assessee cannot be said to be guilty of any willful suppression or willful misstatement of facts with any intention to evade any duty. In support, he placed reliance on the following judgments:- CONTINENTAL FOUNDATION JOINT VENTURE Vs. CCE- 2007 (216) ELT 177 (SC) MENTHA AND ALLIED PRODUCTS- 2004 (167) ELT 494 (SC) JAIPRAKASH INDUSTRIES- 2002 (146) ELT 481 (SC) NAGARJUN CONSTRUCTION CO. LTD. Vs. CGST, BHOPAL- 2019-TIOL-667-CESTAT-Del. SHAPRROJI PALLONJI CO. LTD. Vs. CCE- 2016 (344) ELT 1132 (Tri.-Mum) 2.3 He further submits that the assessee was subject to regular departmental audit, the audit at the previous occasion after scrutinizing the assessee s records including the ER-1 Returns, had not raised any issue on its admissibility to exemption under Sl.No. 144 of Notification No.12/2012-CE, for this reason also the invocation of extended period of limitation is completely untenable. The assessee s record for the period 2011-12 to 2014-15 had been audited by Department in July, 2015 wherein, no ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/2011-CE for Serial No. 46 stands fulfilled and accordingly, the demand if any, ought to have been restricted to 2% only. 2.7 As regard, the department s appeal for the disputed period of April, 2016 to June 2017, he submits that the department is in appeal only on the ground that the benefit of exemption notification was available in a situation where the entire quantity of Ready Mix Concrete (RMC) manufactured at site being used for construction work at site and that no Ready Mix Concrete (RMC) had been cleared from the said site even on the payment of appropriate duty of Excise. In other words, the department reading of the exemption is that the exemption is available to the site subject to all the RMC manufactured at site being used for constriction work at such site. He submits that the applicability of exemption has to be seen qua the goods on which it has been claimed and not qua the site. Further the exemption was claimed only in respect of goods used in the construction at the site and not for those which were cleared from the site. Secondly, it was the assesse s contention that the department is adding/reading a condition in the exemption which does not exist and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mix Concrete for captive consumption without payment of duty as well as cleared to other customers on payment of Central Excise Duty. 3.1 In view of the explanation to the exemption notification No.12/2016-CE Ready Mix Concrete manufactured at site shall be solely used in the construction work in the same site. Unless the entire production of Ready Mix Concrete manufactured at site is used solely at the site for construction work, the exemption will be denied even for Ready Mix Concrete used at the site. He submits that the adjudicating authority has ignored that this provision contained in the said explanation to Notification No.12/2016-CE dated 01.03.2016 is not fulfilled by the assessee as apart from using of Ready Mix Concrete manufactured at site for construction purpose they had cleared some quantity of Ready Mix Concrete manufactured at the said site to another site/customer on payment of duty and made a mistake in granting the benefit of duty exemption to the Ready Mix Concrete used in the construction work at such site under the provision of amended Notification No.12/2016-CE dated 01.03.2016. 3.2 He submits that the case laws relied upon by the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll 01.03.2016 when the entry No.144 has been amended vide Notification No.12/2016- C.E dated 1.3.2016 with prospective effect only therefore, the facts mentioned in the relied upon decision are different from the facts involved in the present matter hence, the ratio of the decision cannot be applied in the present matter. 3.4 As regard the extended period, it is his submission that both the case laws of M/s SHAPOORJI PALLONJI CO (supra) and CONTINENTAL FOUNDATION JOINT VENTURE (SUPRA) for invocation of extended period. He placed reliance on the judgment in the case of M/S. GENEX ENTERTAINED LTD VS COMMISSIONER OF CUSTOMS 2018 (363) ELT 1021 he submits that the assessee has referred to the Circular No. 9793/2014-CX dated 15.01.2014 in support that extended period will not be applicable in respect of demand raised in the wake of M/s FIAT INDIA judgment of the Hon ble Supreme Court. He submits that judgment was delivered in respect of valuation of the products for assessment on payment of Central Excise Duty therefore, the same is not applicable in the present case. 3.5 As regard the contention of the assessee in respect of reversal of Cenvat Credit, it is contended that RMC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t supported by any documentary evidence. Further, to avail such benefit, procedure prescribed under the Cenvat Credit Rules, 2004 is required to be followed which has not been done by the assessee in this case therefore, the contention of the assessee claiming the concessional rate of duty at 2% is liable to be rejected. 3.7 He further submits that the adjudicating authority has rightly relied upon the decision of this Hon ble CESTAT (Larger Bench) in the case of NIZAM SUGAR FACTORY Vs. CCE, HYDERABAD- 1999 (114) ELT 429 (Tri.-LB). He submits that in view of the above judgment, the adjudicating authority has rightly invoked the larger period. He submits that the assessee have contravened the Central Excise Act, 1944 claimed thereunder by way of willful misstatement, suppression of fact with an intent to evade the payment of central excise duty. The assessee failed to examine the taxable value by way of suppression and wrong description of their product in their periodical returns. Thus, in the instant case the ingredients as specified under Section 11A(4) of the Central Excise Act, 1944 are fulfilled and the contention that unit having been audited previously does not take away ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tual 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 - what is ready mix concrete, appearing in internet website of National Ready Mix Concrete Association, USA :- (i) Concrete, in its freshly mixed state, is a plastic workable mixture that can be cast into virtually any desired shape. It star ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 In view of the above judgment, the Apex Court held that RMC is not the same as Concrete Mix and exemption is granted to Concrete Mix only and not to the Ready Mix Concrete. In view of the above judgment, it is clear that the assessee s product i.e. Ready Mix Concrete (RMC) is not eligible for exemption under Notification No.12/2012-CE dated 17.03.2012 (Sl.No.144) which is pari materia to the exemption entry provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of statute says and it is not for the Executive. Looked at from another angle, a circular which is contrary to the statutory provisions has really no existence in law. From the aforesaid judgment, when such circulars dated 23.05.1997, 06.01.1998 and 20.11.2001 has been eclipsed from their operation, in view of the above settled position in law, it cannot be said that the assessee had any malafide intention with intent to evade payment of duty. Moreover, the issue involved is the interpretation of exemption Entry in respect of which even there are contrary views of the Hon ble Supreme Court judgment of SIMPLEX INSFRASTRUCTURES LTD.(supra) and LARSEN TOUBRO (supra) therefore, in a case where there is a possibility of different interpretation which is not in dispute in the present case, it cannot be alleged that the assessee had any malafide intention with intent to evade payment of duty. As regard the factual matrix on the issue of limitation, we find that the assessee have been filing their ER-1 Returns regularly. Relevant page of ER-1 Returns are scanned below:- From the above ER-1 Returns, it is observed that the assessee have declared the description of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the exemption Notification column they have clearly claimed the notification No.12/2012-CE dated 17.03.2012 (Sl.No.144). With this information, if at all the department is of the view that the assessee is not entitled for exemption in respect of Ready Mix Concrete (RMC) department could have called the specific quantity of Ready Mix Concrete and could have issued a show cause notice well within the normal period. The department has failed to do so therefore, for this reason on the part of the department, suppression of fact or mis-declaration cannot be alleged on the part of the assessee. It is also a fact on record that the assessee s records were audited from time to time and no issue of RMC and exemption threron was raised despite all the information available on records. 4.4 In our view, it is the vital part for auditors to verify that whether the claim of the assessee in respect of exemption notification no.12/2012-CE dated 17.03.2012 in their ER-1 returns. On this basis, it is clear that the assessee have not mis-declared any fact from the department. The assessee in their argument relied upon the judgment of the Hon ble Supreme Court on the issue of limitation, the same i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llusion are concerned, it is evident that the intent to evade duty is built into these very words. So far as mis-statement or suppression of facts are concerned, they are clearly qualified by the word wilful , preceding the words mis-statement or suppression of facts which means with intent to evade duty. The next set of words contravention of any of the provisions of this Act 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. (ii) JAIPRAKASH INDUSTRIES- 2002 (146) 481 (SC) 6 . We will first take up the second question. The law on this point is well-settled. In the case of Padmini Products v. Collector of Central Excise reported in 1989 (43) E.L.T. 195 (S.C.), this Court has held that wherever there is the scope for believing that the goods are not excisable to duty and, therefore, no licence is required to be taken out, then the extended period of limitation for demand under Section 11A is inapplicable. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set aside the demand under the show cause notice dated 3rd May, 1993. The ratio of the above judgments is clearly applicable in the present case being the facts are similar. The Authorized Representative of the Revenue heavily relied upon various judgments on the limitation. We are of the view that as regard the issue of limitation, the case is based on facts of each case. As per the facts of the present case, as discussed above it is clear that there is absolutely no suppression of fact on the part of the assessee with intent to evade payment of duty therefore, the judgments relied upon by the Revenue are not applicable in the facts of the present case. Accordingly, the entire demand is under extended period i.e. from April, 2014 to September, 2015 and April, 2016 to June, 2017 whereas, the Show Cause Notice was issued on 15.04.2019 therefore, the entire demand is time barred. 4.5 Without prejudice to our above findings on time bar, we find that the revenue has also filed appeal against the dropping of demand of ₹ 8,31,68,920/- i.e. for the period April, 2016 to June, 2017 however, as per the above finding even demand for this period is also time barred but for academ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that entire manufactured goods i.e. Ready Mix Concrete (RMC) should be used within the premises of manufacturer for construction work and no any part of the manufactured goods should be cleared outside the factory. In absence of such condition, the department cannot impose artificially such condition to deny the exemption to the assessee. We are, therefore, of the clear view that the adjudicating authority had rightly extended the benefit of exemption notification in respect of Ready Mix Concrete (RMC) used by the assessee in their manufacturing premises for construction work hence, the demand for the period April, 2016 to June, 2017 was rightly dropped by the adjudicating authority on the ground of its merit. Since, we have decided the matter in both the appeals on the ground of limitation and in the Department s appeal also on merit, we are not inclined to deal with other issues such as claim of exemption notification No.67/95-CE and Notification No.2/2011-CE dated 01.03.2011 (Sl.No.46). 05. As per our above discussions and findings, the impugned order stands modified. As a result assessee s appeal No E/10173/2020 is allowed with consequential relief and Revenue s appeal No E/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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