The Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal( CESTAT ) has held that duty exemption is allowable on concrete mix used for on-site construction. The Excise Circular of 23.05.1997 also clarified so and extended the benefit of exemption to the concrete mix, produced at the site of construction.
M/s Arora Construction Co. Pvt. Ltd., the respondent is a construction company. For their use, they manufacture concrete mix/ ready mix concrete which is used by them at their sites. Revenue was of the view that this concrete mix is subject to levy of excise duty accordingly a show cause notice was issued demanding Central Excise Duty including cesses.
The Show cause notice was adjudicated and confirmed the demand of Central Excise Duty. On appeal, the Commissioner ( Appeals ) appeal was allowed in favour of the Assessee
The issue involved in the present case is purely an interpretational issue about whether the concrete mix manufactured at the site is the same as ready mix concrete subjected to the levy of central excise duty.
Since the issue was purely an interpretational issue which was settled only after the decision of the Supreme Court, we do not find any merits in this appeal challenging the order of Commissioner ( Appeals ) on the ground of limitation.
The revenue has stated that the Commissioner ( Appeal ) has in the impugned orders, relied upon the decisions which were for the period before issuance of the Clarification dated 23.05.1997 by the Board.
It was evident that the Legislature has treated RMC and CM as two different products. Whereas CM has generally been covered by the exemption notification, such an exemption is not extended to RMC. Even when doubts were raised from time to time about the two products, the 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. It was evident that the duty that was demanded from L&T by issuing show-cause notices covered the period from May 2, 1996, to February 28, 1997, and from March 1, 1997, to March 19, 1998.
A two-member bench comprising P K Choudhary, Member ( Judicial ) and Sanjiv Srivastava, Member ( Technical ) observed that the dispute is with regards to the determination of the nature of the goods manufactured at the site of construction, “whether they are concrete mix or ready-made concrete mix” this purely a question of fact. The Circular of 23.05.1997 also clarified so, and extended the benefit of exemption to the concrete mix, produced at the site of construction.
It was a settled principle in law that in such a case an extended period of limitation will not be applicable. Commissioner ( Appeal ) in the impugned order rightly relied upon the decision of the Gujarat High Court of Kay Kay Press Metal and Bombay Bench Shapoorji Pallonji & Co Ltd to hold that the demand is barred by limitation. The revenue dismissed the appeal.
Shri Santosh Kumar Authorized Representative appeared for the Revenue and Shri Umesh Sarwal Advocate appeared for the Respondent.
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