2006 (4) TMI 30 - AT - Central Excise

Central Excise Concrete blocks classified under sub-heading 6807.20 and not under 6807.90 (2) SSI benefit allowable to appellant for producing proof to show that the brand name was assigned to them (3) Order of the Commissioner confirmed demand for extended period and penalty set aside

Summary

Issues Involved:

1. Classification of solid concrete blocks.
2. Invocation of larger period for demand and imposition of penalties.
3. Eligibility for Small Scale Industry (SSI) exemption.
4. Eligibility for Modvat credit.

Detailed Analysis:

1. Classification of Solid Concrete Blocks:

The primary issue was whether the solid concrete blocks manufactured by the assessee should be classified under sub-heading 6807.20 or 6807.90 of the Central Excise Tariff (CET). The Tribunal previously remanded the case to the Commissioner to re-examine this classification issue. The Commissioner classified the blocks under sub-heading 6807.20, which pertains to "Blocks, slabs, concrete beams and stairs of a kind used in prefabricated buildings." This decision was based on various expert opinions, including those from the Indian Institute of Science, Torsteel Research Foundation, and Malnad College of Engineering, which confirmed that the blocks could be used in prefabricated buildings. The Tribunal upheld this classification, rejecting the Revenue's contention that the blocks should be classified under the residuary entry 6807.90, which does not specifically pertain to prefabricated buildings.

2. Invocation of Larger Period for Demand and Imposition of Penalties:

The Tribunal found that the Commissioner exceeded the terms of the remand order by invoking a larger period for demand and imposing penalties. The initial Orders-in-Original had dropped the demands for the larger period and did not impose penalties, and this was not challenged by the Revenue. The Tribunal held that the Commissioner's action to confirm demands for the larger period and impose penalties was beyond the scope of the remand order, which was limited to the classification issue. Consequently, the Tribunal set aside the Commissioner's order on this ground.

3. Eligibility for SSI Exemption:

The Commissioner denied the benefit of SSI exemption to the assessee on the grounds that they used the brand name "APCO," which belonged to another entity. However, the assessee provided evidence that the brand name had been assigned to them. The Tribunal accepted this evidence and referenced judgments such as Bullworker Enterprises and Zaharshan Chemicals, which support the claim that the benefit of SSI exemption cannot be denied when the brand name is assigned. Thus, the Tribunal set aside the Commissioner's order denying SSI exemption.

4. Eligibility for Modvat Credit:

The Tribunal found that since the assessee was entitled to SSI exemption, they were not required to pay the duty. Consequently, the denial of Modvat credit by the Commissioner was unjustified. The Tribunal allowed the appeals related to Modvat credit, referencing cases like Balmer Lawrie and Co. Ltd. and CCE v. Avis Electronics Pvt. Ltd., which support the assessee's eligibility for Modvat credit when duty is not required to be paid.

Conclusion:

The Tribunal concluded that:
- The solid concrete blocks are classifiable under sub-heading 6807.20 of the CET.
- The Commissioner's order confirming demands for the larger period and imposing penalties is set aside.
- The assessee is entitled to the benefit of SSI exemption.
- The assessee is entitled to Modvat credit.

The appeals filed by the assessee were allowed, and the Revenue's appeals were rejected.