2020 (1) TMI 980 - AT - Central Excise

Relief from putting retail sales price (RSP / MRP) - Clearance of cement bagged in individual bags to industrial buyers - Benefit of N/N. Sl.No.1C of the notification 04/2006-CE as amended - Department was of the view that the customers to whom the assessee has sold the cement cannot be termed as industrial consumers and therefore duty has to be paid in terms of Sl.No.1A of the notification - HELD THAT - The issue is no longer res integra as it has been decided by the Hon ble High Court of Karnataka in the case of COMMISSIONER OF C. EX., BANGALORE-II VERSUS MYSORE CEMENTS LTD. 2010 (8) TMI 246 - KARNATAKA HIGH COURT that the benefit of exemption N/N. 04/2006-CE (Sl.No.1C) is available to cement bagged in 50 kg bags but marked as cement meant for bulk use without printing the RSP and supplied to industrial/institutional consumers. The assessee is entitled to the benefit of exemption N/N. 04/2006-CE (Sl.No.1C) in respect of the cement supplied to institutional consumers in 50 kg bags - The demand and interest, if any, on account of sales to individuals by the assessee are upheld and all penalties are set aside - appeal is allowed by way of remand to the original authority for the limited purpose of determining the duty, if any, payable and interest.

Summary

Issues involved:
Interpretation of exemption notification for cement supplied to different categories of buyers.

Analysis:
1. Background: The appeals involved a dispute regarding the classification of buyers of cement supplied by the assessee and the applicability of exemption notification 04/2006-CE (Sl.No.1C).

2. Contention: The department argued that only one category of buyers could be considered as industrial consumers eligible for exemption, while the rest did not qualify. The assessee contended that all cement supplied in bulk to institutional buyers should be eligible for the exemption.

3. Legal Precedents: The assessee relied on the judgment of the Hon'ble High Court of Karnataka in the case of Mysore Cements Ltd, which upheld the availability of exemption for cement supplied in bulk to institutional consumers. Several other cases were cited to support this argument.

4. Decision: The Tribunal, after considering the arguments and legal precedents, held that the benefit of exemption notification 04/2006-CE (Sl.No.1C) applied to cement supplied to institutional consumers in 50 kg bags. The demand and interest related to sales to individuals were upheld, while penalties were set aside.

5. Outcome: The assessee's appeal was allowed, remanding the case to the original authority for determining any duty payable. The department's appeal was rejected as the first appellate authority had correctly followed the Tribunal's orders in similar cases.

6. Conclusion: The Tribunal's decision aligned with the precedent set by the Hon'ble High Court of Karnataka and upheld by the Tribunal in previous cases, ensuring consistent application of the exemption notification for cement supplied to institutional consumers.