2024 (2) TMI 72 - AT - Central Excise

Levy of penalty - Bonafide Belief - Commissioner (Appeals) deleted the penalty - Determination of the nature of the goods manufactured at the site of construction - The dispute was that, whether they are concrete mix or ready made concrete mix? - HELD THAT - This is purely a question of fact. The Circular of 23.05.1997 also clarified so, and extended the benefit of exemption to the concrete mix, produced at site of construction. Hon ble Supreme Court was concerned with the same issue in the case M/S LARSEN TOUBRO LTD. ANOTHER, ECC CONSTRUCTION GROUP VERSUS COMMISSIONER OF CENTRAL EXCISE, HYDERABAD 2015 (10) TMI 612 - SUPREME COURT and has settled the issue in the favour of revenue. However if the issue was so clear, the revenue authorities should have proceeded against the respondent long back by demanding the duty due within the normal period of limitation. Having not done so they could not have invoked extended period of limitation to demand the duty by placing the reliance on the circular clarifying on the issue which has been upheld by the Hon ble Apex Court in the said decision. It is a settled principle in law that in such a case an extended period of limitation will not be applicable. There are no merits in this appeal - the appeal filed by the Revenue is dismissed.

Summary

Issues Involved:
1. Dutiability of Ready Mix Concrete (RMC)
2. Application of Extended Period of Limitation
3. Imposition of Penalty

Summary:

1. Dutiability of Ready Mix Concrete (RMC):
The core issue was whether the concrete mix manufactured at the site is the same as ready mix concrete (RMC) and thus subject to central excise duty. The Commissioner (Appeals) had concluded that RMC was a dutiable product based on the Apex Court's decision in Larsen & Toubro Vs Commissioner of Central Excise, Hyderabad [2015 (324) ELT 646 (SC)]. The Tribunal upheld this view, noting that the distinction between RMC and concrete mix was clarified by the Apex Court, which stated that RMC is not exempted from excise duty under Notification No.4/97-C.E., dated 01.03.1997.

2. Application of Extended Period of Limitation:
The Commissioner (Appeals) ruled that the demand raised was time-barred, as the issue was purely interpretational and settled only after the Apex Court's decision. The Tribunal agreed, emphasizing that extended period of limitation is not applicable in cases of interpretational disputes. The Tribunal cited the Hon'ble Gujarat High Court decision in Kay Kay Press Metal [2013 (297) E.L.T. 177 (SC)] and Bombay Bench decision in Shapoorji Pallonji & Co Ltd [2016 (344) E.L.T. 1132 (T-Mum)] to support this conclusion.

3. Imposition of Penalty:
The Commissioner (Appeals) found that the appellant was under a bona fide belief that they were not engaged in the manufacture of excisable goods and were paying service tax on the consideration received, which included the value of RMC. Therefore, no penalty was imposable under Section 11AC of the Central Excise Act, 1944. The Tribunal upheld this view, noting that the department did not refute the appellant's submission that they were already paying service tax and VAT, and any demand of central excise duty would amount to double taxation.

Conclusion:
The Tribunal dismissed the Revenue's appeal, affirming the Commissioner (Appeals)'s decision that the demand was time-barred and that no penalty was imposable due to the bona fide belief of the appellant. The appeal filed by the Revenue was dismissed.