2014 (10) TMI 196 - AT - Central Excise

Denial of benefit of exemption under Notification No. 4/2006-CE dated 01.03.2006 - applicant supplied cement free of cost for construction work within the applicant s factory premises - appellant contended that notification would apply even if there is no sale. - Held that - retail sale price means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumers. Prima facie, there is no sale in this case. Hence, the applicant failed to make out a prima facie case in their favour. - Partial stay granted.

Summary

Issues:
- Interpretation of Notification No. 4/2006-CE for concessional rate of duty on cement.
- Whether the benefit of exemption under the notification applies when cement is supplied free of cost for construction work within the factory premises.

Analysis:
The case involved the interpretation of Notification No. 4/2006-CE regarding the concessional rate of duty on cement. The applicants, engaged in cement manufacturing, supplied cement free of cost for construction work within their factory premises. The dispute arose when the adjudicating authority denied the benefit of the notification, leading to a demand of duty amounting to &8377; 15,80,436 based on the tariff rate of duty.

Upon examining the relevant portion of the notification, specifically S.No. 1A, it was noted that the notification applied to goods not covered in S.No.1 and cleared in packaged form based on retail sale price criteria. The Revenue contended that S.No. 1A applied to the sale of cement, while the applicant's consultant argued that the notification should apply even in the absence of a sale. The Tribunal observed that 'retail sale price' referred to the maximum price for selling excisable goods to ultimate consumers, indicating no actual sale in the present case. Consequently, the Tribunal directed the applicant to pre-deposit &8377; 5,00,000 within eight weeks, with the balance amount of duty and interest waived upon compliance, and recovery stayed until the appeal's disposal.

In conclusion, the Tribunal's decision highlighted the importance of the specific criteria outlined in the notification for availing the concessional rate of duty on cement. The case emphasized the necessity of meeting the conditions stipulated in such notifications to claim exemptions effectively, even in scenarios where goods are supplied without a direct sale transaction.