2011 (11) TMI 572 - AT - Central Excise

Denial of concessional rate of duty under Notification No. 4/2006-C.E., dated 1-3-2006 (Sl. No. 1C) - Held that - Concessional rate of duty under Exemption Notification No. 4/2006-C.E., dated 1-3-2006, as amended, by Notification No. 4/2007-C.E., dated 1-3-2007 (Sl. No. 1C) would be applicable to the cement, other than that cleared in packaged form i.e. the cement cleared to industrial/institutional consumers. The department has denied the benefit of exemption in respect of clearances to M/s. JKM Infrastructure, M/s. YFC Project Pvt. Ltd. and M/s. HCC RMX, Sahibabad on the ground that these customers are not institutional/industrial consumers. However, on the basis of certificates produced by the appellant and also the Sales Tax Registration documents of M/s. HCC RMX, M/s. JKM Infrastructure and M/s. YFC Project Pvt. Ltd., it is seen that all of them are manufacturer of ready-mix concrete (RMC). The certificates produced by them show that the cement purchased from the appellant was used for self-consumption - appellant are eligible for exemption under Notification No. 4/2006-C.E., dated 1-3-2006, as amended, in respect of clearances of cement to M/s. JKM Infrastructure, M/s. YFC Project Pvt. Ltd. and M/s. HCC RMX, Sahibabad. The requirement of pre-deposit of duty demand, interest and penalty is, therefore, waived and the recovery thereof is stayed till the disposal of the appeal - Stay granted.

Summary

Issues:
- Applicability of concessional rate of duty under Notification No. 4/2006-C.E.
- Denial of exemption for clearances to industrial/institutional consumers
- Consideration of certificates and documents provided by customers
- Prima facie case for waiving pre-deposit of duty demand, interest, and penalty

Analysis:
The appellants, engaged in cement manufacturing, availed concessional duty rate under Notification No. 4/2006-C.E. for goods under Heading No. 2523 29. The dispute arose when the department alleged that the appellants had wrongly claimed this exemption for clearances to industrial/institutional consumers like M/s. JKM Infrastructure, M/s. YFC Project Pvt. Ltd., and M/s. HCC RMX, Sahibabad during a specific period. The duty demand of Rs. 5,43,381/- along with interest and penalty was imposed, which the appellants contested through an appeal.

During the hearing, the appellant's counsel argued that the cement sold to the mentioned customers was used for production of Ready Mix Concrete (RMC) and not for resale, supported by certificates from the customers. The departmental representative opposed the stay application, upholding the findings of the Commissioner (Appeals).

Upon careful consideration, the Tribunal observed that the customers were manufacturers of RMC and the cement purchased was for self-consumption as per the certificates and Sales Tax Registration documents. Consequently, the Tribunal found the appellants eligible for the exemption under the Notification for clearances to the mentioned customers. Therefore, the requirement of pre-deposit of duty demand, interest, and penalty was waived, and recovery stayed pending appeal disposal.

In conclusion, the Tribunal allowed the stay application, granting relief to the appellants based on the prima facie view of their eligibility for the exemption, supported by the evidence presented during the proceedings.