2009 (6) TMI 247 - AT - Central Excise

Eligibility to the benefit of concessional rate of duty 8% under Sl. No. 23 of the table to the Notification No. 10/2003 to paver blocks - Appellant availed concessional rate of duty under Notification No. 10/03-C.E., dt. 1-3-03 in terms of Sl. No. 23 of the table thereto in respect of clearances of paver/pavement blocks since the solid blocks manufactured by them were pavement blocks used in floors of driveways, petrol pumps, flooring of storing yards etc. Revenue s view that they could not be treated as building blocks eligible to concessional rate of duty of 8%, is not acceptable impugned issue stands settled by tribunal in the case of CCE, Thane-II v. Conwood Pre-fab Ltd. & Super Tiles & Marbles Pvt. Ltd. 2010 - TMI - 35128 - CESTAT, MUMBAI - Held that the assessees are entitled to the benefit of concessional rate of duty under the relevant Notifications as rightly held by the lower appellate authority

Summary

Issues:
Classification of paver blocks for concessional rate of duty under Notification No. 10/03-C.E.

Analysis:
The case involved the classification of paver blocks for the concessional rate of duty under Notification No. 10/03-C.E. The assessees manufactured solid concrete blocks and hollow lightweight concrete blocks, availing Cenvat credit on inputs. The Revenue contended that the blocks did not qualify as building blocks eligible for the concessional rate of duty. Show Cause Notices were issued for recovery of differential duty, interest, and penalties. The first two notices were vacated, but the Revenue's appeals upheld the duty demand and imposed penalties. The main issue was whether the paver blocks could be classified as 'building blocks' under the relevant notification.

The Tribunal referred to a previous decision in the case of CCE v. Conwood Pre-fab Ltd. & Super Tiles & Marbles Pvt. Ltd. where it was held that paver blocks used for paving roads, footpaths, and open spaces should be classified as 'building blocks' under a specific sub-heading, entitling them to the concessional rate of duty. The Tribunal rejected the Revenue's argument based on IS specifications, emphasizing common understanding of 'building blocks' and the absence of a specific definition in the Tariff Act. It concluded that the paver blocks in question should be classified as 'building blocks' under a specific sub-heading, not the residuary entry as suggested by the Revenue.

Given the similarity of goods in the present case to those in the Conwood case, the Tribunal applied the same reasoning and set aside the impugned orders, allowing the appeals filed by the assessees. The decision was based on the classification of paver blocks as 'building blocks' under a specific sub-heading, entitling them to the concessional rate of duty. The Tribunal's analysis focused on common understanding and the absence of specific references in the Tariff Act, rejecting the Revenue's arguments based on IS specifications and end-use considerations.

This judgment clarifies the classification of paver blocks for concessional duty rates under specific sub-headings, emphasizing common understanding and legal interpretations over technical specifications and end-use arguments. The decision aligns with previous rulings and provides guidance for similar cases involving the classification of construction materials for excise duty purposes.