9911796707
TMI Blog2002 (1) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... d a show cause notice dated 20-1-99 to all the above parties alleging that the construction companies employed by M/s. NJPC were manufacturing 'Ready Mix Concrete (RMC)' on which no central excise duty is being discharged. It is averred that the said RMC falls under Chapter Heading No. 3824.20 of the Schedule to the Central Excise Tariff Act and is subject to central excise duty. It is stated that all the three parties are adopting the same method of manufacture of RMC for which the rock is blasted from the designated quarry of M/s. NJPC. It is transported to the crusher and crushed to the specified sizes and specific quantity at the project site. Some aggregate, cement and sand are also produced from the crushing plant set up at the site. Some natural sand is also used. The aggregate and sand are transported and stored in bins adjacent to the automatic batching plant. The cement purchased from the market is stored in the cement silos at the site. The batching plant is an automatic plant which regulates and delivers the specified sizes and quantities of aggregate, sand and cement into the mixing drums through the built-in conveyor. The admixture for water reduction or air entrainin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xed concrete. It is alleged that they suppressed the material facts from the department to evade the central excise duty. Therefore, the noticee companies have been called upon to show cause as to why the central excise duty as per the particulars below should not be recovered from them under Rule 9(2) of the Central Excise Rules, 1944 read with proviso to Section 11A(1) of the Central Excise Act, 1944 : (a) M/s. NJJV : Rs. 70,96,670/- (b) M/s. CFJV : Rs. 54,45,640/- (c) M/s. JPHC : Rs. 2,64,86,965/- The abovesaid companies have further been called upon to show cause as to why the penalty should not be imposed on each one of them under Rule 173Q read with Section 11AC. 4. On consideration of the replies of the noticee parties, the Commissioner of Central Excise, Chandigarh-I vide his Order dated 30-12-99/12-5-2000 confirmed the amounts of duty on them as indicated above. He also imposed penalties of equivalent amounts on the parties and ordered for the recovery of the interest @ 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and supplied to the work site in vehicles whereas in their case, the product is made at the work site itself. Besides - it is argued - the two products viz., concrete mix and RMC are also distinguished by different BIS specifications. While the concrete mix is made as per code IS: 456-1978 the RMC is made as per the specifications provided under the code IS: 4926-1976. It is contended that both of these distinguishing features of the concrete are recognised even in the CBEC Circular No. 368/1/98-CX., dated 6-1-98. In this Circular it is observed that a clear distinction needs to be made between (a) concrete mix at site and (b) RMC. It is stated that the shelf life of RMC is increased by addition of chemicals. This mix is loaded on a transit mixer mounted on a truck chassis which is transported to the site of the customers and the same is discharged at the site for use in further construction of building etc. It is contended before us that the appellants are not adding any chemicals to increase the shelf life of the mixer nor it is transported by loading it in a transit mixer mounted on a truck chassis. It is stated that in their case, the concrete mix is made at the site itself a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s order has not recorded any finding as to the time bar of the demands raised before him. It is stated that for the purpose of arriving at the assessable value for levy of duty, the Commissioner has adopted the value for the RMC in a similar project in Ranjit Sagar Dam under the provisions of Rule 6(b)(i) of Central Excise (Valuation) Rules, 1975, but it is stated that the order of the Commissioner in that case itself is set aside by the Tribunal and the matter is remanded for de novo consideration vide CEGAT Final Order No. 366/2000/C, dated 2-3-2000 and the matter is resting at this stage. 7. The argument is also advanced that the concrete made by them itself is not liable to pay any duty of Central Excise since it is neither marketed nor it is marketable. However, this argument is to be stated to be rejected since it is the appellants' own case that the concrete is made strictly as per the BIS specifications IS: 456/1978. It is well known that the BIS standards are provided to ensure the manufacture of the goods as per the specifications provided therein to ensure the manufacture of quality products and once the goods are made conforming to these standards, they have necessaril ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at order. The ld. SDR further placed reliance on Poddar Tyres (Pvt.) Ltd. v. C.C.E., Chandiqarh - 2000 (126) E.L.T. 737 (T) in which a view is held that a product to be excisable under certain classification need not essentially conform to the ISI specifications as the ISI specifications decide the quality of a product and not its character on nature. 11. We have considered the submissions made before us. The demand in dispute before us can be split into two periods - the one from April, 1994 to 1-3-97 and the other from 1-3-97 to May, 1997. The demand for the period up to 1-3-97 is covered in favour of the appellants on merits as well as on time-bar by the decision of the Tribunal in the case of A.C.C. (supra) which on appeal is upheld by the Apex Court. This position is admitted even in the latest Circular No. 601/38/01-CX., dated 20-11-2001 of the Ministry of Finance which is published at 2001 (134) E.L.T. (T) 30-31 = 2001 (47) RLT M/58-59. This circular is reproduced below : Classification — Ready mix concrete — Reg. "It is directed to refer to Board's Circular Nos. 237/71/96-CX, dated 12-8-96 and 315/31/97-CX, dated 23-5-97 issued from F. No. 126/1/96-CX.3 wherein it has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the two types - (a) concrete 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 weighed, batched by electrical controls and limit switches. Cement from silo is carried to the batching plant by a screw conveyor operated with automatic weighing gauges. Water is fed through flow meters after subjecting such water to chemical analysis. The mixture of stone aggregates, sand, cement and water is mixed in a mixer. The shelf life of the mixture so obtained is increased by addition of chemicals. This mix is loaded on a transit mixer mounted on truck chassis which is transported to the site of the customers and the same is discharged at site for use in further construction of building etc. 3. The qualities of Ready Mix Concrete, are somewhat different to site mixed concrete. The final product Ready Mix Concrete is a material in plastic, wet process state and not a finished product like blocks or precast tiles or beams. 4. Ready Mix Concrete is thus an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation in the contract for conveying the concrete to any part of the structure, wherein the concrete is loaded into chutes, belt, conveyors and other similar equipment but carrying the concrete in a bin continuously exposed flow is not permitted except for a very limited or isolated section of the work. In view of these clauses in the contract, it is contended that the concrete made by them is not RMC and is not subject to any duty. But, however, as against the preceding conditions in the contract, what we find on the ground is that the concrete is being manufactured by adopting a very advanced and sophisticated process which, as per their own version, is adopted for dams and massive structures. The process of manufacture is described by S/Shri B. Roy Chaudhury and N.K. Sharma, representatives of the M/s. NJJV in their statements dated 5-3-98. This is that rock is blasted from the quarry, transported to crusher and crushed to the specified sizes and specified quantity as per the contract at the project site. The aggregate as well as some quantity of sand is produced at the site from this crushing plant. Some natural sand is also used. The aggregates from crushing plant and the sand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given in IS: 4926 specification for Ready Mix Concrete. 14. Thus, on carefully taking into consideration the manufacturing process adopted by the appellants, the Board's instructions and the expert opinion of the BIS on the subject, we are of the view that the product manufactured by the appellants is RMC falling under sub-heading 3824.20 of the Central Excise Tariff and shall be subject to the corresponding rate of duty. This RMC is not eligible to the exemption under Sl. No. 51 of the Table attached to Notification No. 4/97-C.E. as this notification exempts concrete mix manufactured and used at the site of construction and not the RMC. 15. Now we take up the valuation aspect of the product under consideration. The Commissioner has recorded that the appellant-companies on specific query failed to provide the value of the RMC manufactured by them. Therefore, he adopted the per cubic metre values of the comparable goods manufactured from time to time in a similar project of Ranjit Sagar Dam. For this, the Commissioner has relied on the provisions of Rule 6(b)(i) of the Central Excise (Valuation) Rules, 1975 and arrived at the duty amount of Rs. 3,90,29,275/- liable to be recovere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be any intention to evade payment of duty. It is observed that no such plea is raised before the adjudicating authority. The Power Corporation is also an appellant in this case and there is no plea of any such commitment on their behalf in their appeal. There is no evidence that the stated clause in the contract would bind the Power Corporation to reimburse the appellants even for the duty liability fastened on to the appellants on the grounds of suppression and mis-representation etc. and not on account of any change in legislation, regulation or by laws. The plea of bona fide belief is, therefore, rejected. The appellants are also claiming the benefit of Modvat credit on the input material but this plea is also not raised before the original authority. However, in the interest of justice, they could be given an opportunity to establish their case before the original authority for eligibility to the Modvat credit in respect of the duty paid on the input material used in the manufacture of RMC with the documentary proof. 17. In view of the above discussion, we set aside the impugned order and hold that :- (a) the product manufactured by M/s. CFJV ..... X X X X Extracts X X X X X X X X Extracts X X X X
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