2015 (9) TMI 90 - AT - Central Excise

Waiver of pre deposit - manufacture of sand lime bricks known as calcium silicate bricks - fly ash bricks or not - using 50% by weight of pond ash as filler - Exemption under Notification No. 5/06-CE and 6/06-CE till 28/2/11 - Held that - when in the Central Excise Tariff there is no definition of a term in a tariff entry, its meaning as understood in the commercial parlance or trade parlance has to be adopted and for this purpose, one has to rely on the how the product is described in the ISI Standard, if any, for the same. In the present case no test has been carried out to ascertain as to whether the bricks, in question, conform to ISI standards for fly ash bricks or whether the same conform to the ISI Standard for sand lime bricks. In absence of such test, in our prima facie view it would not be correct to say that the bricks, in question, are fly ash bricks covered by heading 6815 - Moreover, in terms of Ministry of Environment notification, the appellant were required to use at least 25% fly ash. Though, admittedly the weight of the fly ash used in the form of pond ash is 50% and admittedly, the pond ash contains moisture and, the total weight of the ash being used in the manufacture of bricks would be much less than 50% and as such, it cannot be said that the fly ash is the pre-dominant constituent. - Partial stay granted.

Summary

Issues:
Classification of bricks under Central Excise Tariff - Whether manufactured bricks are sand lime bricks or fly ash bricks for exemption eligibility.

Detailed Analysis:

Issue 1: Classification of Bricks
- The appellant shifted their manufacturing unit and started using 50% pond ash along with lime and sand to manufacture bricks.
- Dispute arose regarding whether the bricks are sand lime bricks or fly ash bricks for classification under Central Excise Tariff.
- Department argued that fly ash being the predominant constituent, the bricks should be classified as fly ash bricks under heading 6815.
- Appellant contended that the bricks are sand lime bricks as fly ash was used as a filler and did not change the essential character of the bricks.
- Appellant's plea was supported by the ISI specification 4139-1989 allowing the use of fly ash in sand lime bricks.
- The manufacturing process and physical characteristics of the bricks were analyzed to determine classification.
- No conclusive test was conducted to ascertain conformity to ISI standards for fly ash or sand lime bricks.
- Considering commercial understanding and absence of test results, the bricks were not deemed as fly ash bricks under heading 6815.
- Ministry of Environment's notification mandated 25% fly ash usage, but the actual weight of fly ash used was less due to moisture content.
- Decision: Department lacked a strong prima facie case; even if classified as sand lime bricks, 1% duty was applicable post 1/3/11, with a total liability of Rs. 3.10 lakhs.

Conclusion:
- Appellant directed to deposit Rs. 3,10,000 within four weeks for compliance with Section 35F, waiving pre-deposit requirement and staying recovery of duty, interest, and penalty.
- Compliance to be reported on 14th July 2015.