2012 (11) TMI 112 - AT - Central Excise

Benefit of Notification - manufacture of Ready Mix Concrete (RMC) - site area is fairly large, Batching Plant is set up in one part of the site and the concrete mix manufactured is transported to the other parts of the site for construction of civil structures, the department was of the view that the appellant was not eligible for the duty exemption Held that - Merely because the RMC has been transported from the Batching Plant installed at the site to various places in the site, it does not mean that the goods are not produced at the construction site. The Notification does not prescribe any spatial dimensions/restrictions for the site. It merely says that the concrete mix should be manufactured at the site of construction. Since the project site is the site of construction and the Batching Plant is installed at the project site, the benefit of Notification cannot be disallowed - waiver of pre-deposit allowed

Summary

Issues:
- Appeal against Order-in-Original denying duty exemption for concrete mix used in civil construction projects.
- Interpretation of Notification No. 4/97 dated 1-3-1997 regarding exemption criteria.
- Determination of whether concrete mix was manufactured at the construction site.
- Assessment of eligibility for exemption based on the location of the Batching Plant.
- Granting waiver of pre-deposit of dues adjudged and stay on recovery during appeal.

Analysis:
The appeal before the Appellate Tribunal CESTAT, MUMBAI challenged the Order-in-Original denying duty exemption for concrete mix used in civil construction projects undertaken by the appellant firm. The appellant, engaged in manufacturing Ready Mix Concrete (RMC), had set up Concrete Batching Plants at project sites awarded by specific contractors. The dispute arose when the department alleged that the appellant was not eligible for duty exemption under Notification No. 4/97 due to transporting RMC within the construction sites. Central Excise duty, interest, and penalties were imposed based on this contention.

The appellant contended that they met the terms of the Notification by setting up Batching Plants at the construction sites and using the concrete mix in the civil work. On the other hand, the Revenue argued that transportation of concrete mix indicated non-compliance with the exemption conditions. The Tribunal examined the site-maps, certified by Project Authorities, which showed Batching Plants within the project sites. It was observed that the Batching Plants were located within the boundary walls of the project sites, where civil construction was ongoing. The Tribunal emphasized that the Notification required concrete mix to be manufactured at the construction site, without specifying spatial limitations.

Based on the evidence presented, the Tribunal concluded that the appellant had fulfilled the conditions of the exemption Notification. The mere transportation of RMC within the project sites did not negate the eligibility for exemption since the Batching Plants were situated at the project sites. Therefore, the Tribunal held that the appellant had a strong prima facie case in their favor for a complete waiver of pre-deposit of the dues adjudged. Consequently, the Tribunal granted a waiver of pre-deposit and stayed the recovery of dues during the pendency of the appeals.

In summary, the Tribunal's decision favored the appellant by interpreting the exemption criteria under Notification No. 4/97 liberally, emphasizing compliance with the condition of manufacturing concrete mix at the construction site. The judgment provided clarity on the eligibility for duty exemption in such scenarios and highlighted the importance of the physical location of Batching Plants in determining exemption entitlement.