2014 (9) TMI 966 - AT - Central Excise

Denial of exemption claim - whether the cement cleared to builders/contractors/industrial consumers/Government/ready-mix-concrete producers would be eligible for the benefit of serial number 1C of the table appended to No. 4/2006-C.E., dated 1-3-2006 - Held that - CESTAT in the case of M/s. Heidelberg Cement (India) Ltd. /M/s. Ultra Tech Cement Ltd. v. CCE, Nagpur/Raigad (2014 (8) TMI 251 - CESTAT MUMBAI) has clearly held that cement in 50 Kg bags sold to builders/developers qualifies as sales to institutional consumers and benefit of serial number 1C of Notification No. 4/2006-C.E., is available to such clearances. Regarding the demand pertaining to clearances to industries like M/s. Grasim Industries, M/s. Vikram Cement, M/s. Gwalior Chemical Industries Ltd., the adjudicating authority has opined that the said industries have not used such cement for manufacture of any excisable goods, having used cement for constructing factory building, residences and roads and repair work and hence such consumers cannot be called industrial consumers but at the same time, ready-mix-concrete producers who have actually used the cement for manufacturing excisable goods namely ready-mix-concrete, have also been denied the benefit available to industrial consumers. Further even if it is contended that the industries like M/s. Grasim Industries, Gwalior Chemicals, etc. did not use cement for producing excisable goods, they admittedly used the same for construction and would therefore qualify to be reckoned in the category of builders. Government also would qualify as institutional buyer. It is also not the case of Revenue that RSP was required to be printed on such sales as per the requirements of Metrology Act. - Decided in favour of assessee.

Summary

Issues: Eligibility for benefit under serial number 1C of Notification No. 4/2006-C.E. for cement cleared to various consumers.

Analysis:
1. Issue of Eligibility for Benefit: The main issue in this case revolves around whether cement cleared to builders, contractors, industrial consumers, government, and ready-mix-concrete producers is eligible for the benefit under serial number 1C of the table appended to Notification No. 4/2006-C.E. The adjudication authority held that such consumers do not fall under the category of institutional or industrial buyers, leading to the confirmation of the demand and imposition of penalties on the appellants for suppression or wilful misstatement.

2. Judicial Pronouncements: The appellants cited previous judicial decisions, including the case of M/s. Heidelberg Cement (India) Ltd. and M/s. Ultra Tech Cement Ltd. v. CCE, Nagpur/Raigad, and Mysore Cement Ltd. v. CCE, Bangalore-II, to support their contention that the issue is settled in their favor. The CESTAT decision in the Heidelberg Cement case clarified that cement sold to builders/developers in 50 Kg bags qualifies as sales to institutional consumers, making them eligible for the benefit under the mentioned notification.

3. Benefit to Various Consumers: The tribunal analyzed the nature of consumption by different entities like industries such as Grasim Industries, Vikram Cement, Gwalior Chemical Industries Ltd., and ready-mix-concrete producers. It was observed that while industries like Grasim and Gwalior used cement for construction purposes, ready-mix-concrete producers utilized it for manufacturing excisable goods. The tribunal also noted that even if some industries did not use cement for producing excisable goods, they still qualified as builders. The government was considered an institutional buyer in this context.

4. Precedents and Decision: Relying on previous judicial pronouncements in cases like Heidelberg Cement, Ultra Tech Cement, Mysore Cements Ltd., and Grasim Industries Ltd., the tribunal concluded that the issue was settled in favor of the appellants. Consequently, the tribunal allowed the appeal and set aside the impugned order, indicating that the benefit under the notification should be extended to the cement cleared to the mentioned consumers.

In conclusion, the judgment by the Appellate Tribunal CESTAT NEW DELHI addressed the issue of eligibility for benefit under a specific notification concerning cement clearance to various consumers. By considering past judicial decisions and analyzing the nature of consumption by different entities, the tribunal ruled in favor of the appellants, allowing the appeal and overturning the earlier order.