2019 (6) TMI 1543 - AT - Central Excise

Valuation - cement supplied by the Appellant to Institutional/ Industrial consumers - cement supplied to the customer without affixing any MRP and was supplied under Serial No. 1C of exemption Notification No. 4/2006-C.E. dated 1-3-2006 and subsequent analogous Notification - HELD THAT - Reliance placed in the case of COMMISSIONER OF C. EX. BANGALORE-II VERSUS MYSORE CEMENTS LTD. 2010 (8) TMI 246 - KARNATAKA HIGH COURT where it was held that general construction work for building general construction work for civil engineering installation and assembly work building completion and finishing work and assessee is treated as a service industry and is entitled to the benefit under the Notification. Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Valuation of cement supplied to Institutional/ Industrial consumers under exemption Notification No. 4/2006-C.E. - Whether construction industry qualifies as a service industry for partial exemption eligibility.

Analysis:

1. Valuation of Cement Supply:
The issue in the present appeal pertains to the valuation of cement supplied by the Appellant to Institutional/ Industrial consumers without affixing any MRP under exemption Notification No. 4/2006-C.E. The demand was raised against the Appellant on the grounds that the cement supplied to the construction industry, an Institutional Consumer, did not qualify for partial exemption as per the exemption notification. The adjudicating authority confirmed the demands, leading to the present appeal.

2. Judicial Precedent and Interpretation:
The Tribunal referred to the judgment of the Hon'ble High Court of Karnataka in the case of Mysore Cements Ltd. to determine the issue. The Court in that case held that the concessional rate of duty was available only if the cement was not cleared in a packed condition. The Appellant contended that they were entitled to the concessional rate for supplying goods to institutional consumers, including the construction industry. The Tribunal, relying on previous decisions, determined that the construction industry is indeed a service industry, entitling the Appellant to the benefit of the Notification.

3. Construction Industry as a Service Industry:
The crux of the matter revolved around whether the construction industry qualifies as a service industry for the purpose of availing the concessional rate of excise duty. The Appellant argued that since the cement was sold in packaged form, they were not entitled to the benefit. However, the Tribunal, supported by previous judgments, held that the construction industry is classified as a service industry, thereby allowing the Appellant to avail the benefit of the Notification.

4. Tribunal's Decision and Precedents:
The Tribunal dismissed the appeal, upholding its decision that the construction industry is a service industry and the Appellant met the requirements for the Notification's benefit. The Tribunal also cited similar views in other cases like Sanghi Industries Ltd. and ACC Ltd. to support its decision. Consequently, the impugned order was set aside, and the appeal was allowed with consequential reliefs.

In conclusion, the Tribunal's decision in this case establishes that the construction industry qualifies as a service industry for the purpose of availing partial exemption benefits under the relevant Notification. The judgment provides clarity on the interpretation of the law concerning the valuation of cement supplied to Institutional/ Industrial consumers and sets a precedent for similar cases in the future.