2021 (12) TMI 177 - AT - Central Excise

Levy to Excise Duty - Ready Mix Concrete (RMC) or concrete mix manufactured by the appellant at the site of M/s Supertech Limited - extended period of limitation - HELD THAT - Admittedly, there has been no inspection at the site (Eco Village-II), where the appellant has installed their batching plant for supplying to M/s Supertech Limited. Further, admittedly the appellant has taken registration under Service Tax provisions with the Department, and were paying service tax on the job charges. Admittedly, appellant have raised two bills one for supply of material and the other for job work mixing the cement, aggregate water, etc. in its batching plant. Further, appellant has raised the job work invoice for concrete mix. Extended period of limitation - HELD THAT - Revenue have not brought any facts on record in support of its allegation of manufacture of RMC by the appellant. Thus, in the facts and circumstances, it is concluded that what has been manufactured and supplied by the appellant is concrete mix , which is not dutiable - the appellant has taken registration for service tax, paying service tax and making compliances for the said activity under dispute, the facts were in the knowledge of the Department and as such extended period of limitation is not invokable. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Whether 'Ready Mix Concrete' (RMC) or 'concrete mix' manufactured by the appellant at the site of M/s Supertech Limited is dutiable under the Central Excise Act.
2. Whether the extended period of limitation is invokable.
3. Whether the penalties imposed are justified.

Detailed Analysis:

Issue 1: Dutiability of 'Ready Mix Concrete' (RMC) or 'Concrete Mix'
The primary issue revolves around whether the product manufactured by the appellant at the site of M/s Supertech Limited qualifies as 'Ready Mix Concrete' (RMC) or 'concrete mix' and its dutiability under the Central Excise Act. The Revenue contended that the appellant manufactured and supplied RMC, which is excisable and classifiable under CTH 38245010, attracting duty at 6% of the value. The appellant argued that they were manufacturing 'concrete mix,' which is not dutiable. The Tribunal referred to the Supreme Court's judgment in L&T vs. CCE, Hyderabad - 2015 (324) ELT 646 (SC) and Board Circular No. 237/71/96-CX dated 12.08.1996, which differentiate between RMC and 'concrete mix.' The Tribunal found that the appellant's site lacked the machinery and processes typically associated with RMC production, such as stone crushers, conveyors, and a central batching plant. Therefore, the Tribunal concluded that the appellant was manufacturing 'concrete mix,' which is not dutiable.

Issue 2: Extended Period of Limitation
The Revenue invoked the extended period of limitation, alleging that the appellant evaded duty by not disclosing the manufacture of RMC. The Tribunal observed that the appellant had registered under Service Tax provisions, paid service tax on job charges, and raised separate invoices for material supply and job work. These actions indicated that the appellant's activities were within the Department's knowledge. Consequently, the Tribunal held that the extended period of limitation was not invokable as there was no suppression of facts.

Issue 3: Justification of Penalties
The adjudicating authority had imposed various penalties on the appellant and its Director under different provisions of the Central Excise Rules. Given the Tribunal's findings that the appellant was manufacturing 'concrete mix' and not RMC, and that the extended period of limitation was not applicable, the basis for the penalties was undermined. The Tribunal set aside the penalties imposed on the appellant and its Director.

Conclusion:
The Tribunal concluded that the appellant was manufacturing 'concrete mix,' which is not dutiable under the Central Excise Act. The extended period of limitation was not applicable due to the appellant's compliance with Service Tax regulations and the Department's knowledge of their activities. Consequently, the penalties imposed were also set aside. The appeals were allowed with consequential relief as per law.