2009 (5) TMI 445 - AT - Central Excise

Cement- Notification No. 4/2006-C.E.- the appellants herein are manufacturers of cement and during the relevant period cleared certain quantities of cement by paying duty at the concessional rate of Rs.400/- per MT along with applicable Higher Education Cess in terms of Notification No. 4/2006-C.E. dated 1-3-2006 as amended by Notification No. 4/2007-C.E. dated 1-3-2007. It is the contention of the revenue that the conditions stipulated in the said Notification for availment of the said concessional rate of duty of Rs.400/- per MT is not adhered to by the appellant and hence they are liable to pay the differential duty. In the light of the decision of Grasim Industries Ltd. v. CCE Jaipur-II, ) held that- The Commissioner (Appeals) has rejected this claim of the appellant on the ground that construction is not an industry. This view is not correct. Construction is treated as an industry under the various statutes and it in fact is one of the biggest industries in any country. Appellant s case is also covered by the Circular of the Board dated 28-2-2002 inasmuch as the clearances were in bulk at contracted prices. The issue also remains covered in favour of the appellant by the decision of this Tribunal in the case of Bharti Systel Ltd. v. CCE. In these circumstances the original duty payments were correctly made and no short levy remained to be recovered. Proceedings before the lower authorities which found to the contrary are not sustainable. Accordingly in view of the foregoing reasons we are allowing the appeal filed by the appellant and set aside the impugned order with consequential relief if any.

Summary

Issues:
- Eligibility for availing concessional rate of duty
- Interpretation of Notification No. 4/2006-C.E.
- Classification of institutional consumers
- Applicability of benefit under Sl. No. 1C of the Notification

Eligibility for availing concessional rate of duty:
The appellants, cement manufacturers, cleared cement at a concessional rate of duty of Rs.400/- per MT under Notification No. 4/2006-C.E. The revenue contended that conditions of the notification were not met, leading to a demand for differential duty. The Adjudicating Authority confirmed the differential duty, penalty, and interest, stating that clearance of cement in 50 kg unit packages did not qualify for the concessional rate. The appellant argued that a similar issue was settled in previous tribunal cases and that the Adjudicating Authority granted the benefit to another assessee. The Tribunal analyzed the notification's conditions and the appellant's eligibility for the concessional rate.

Interpretation of Notification No. 4/2006-C.E.:
The Tribunal examined the specific provisions of Notification No. 4/2006-C.E. to determine the appellant's claim for the benefit under Sl. No. 1C. It was established that the clearances were made to institutional consumers, with a dispute arising over the definition of institutional consumers. The Commissioner's interpretation was challenged, asserting that construction companies fell under the service industry category, supported by references to relevant government policies and services listed in the Foreign Trade Policy.

Classification of institutional consumers:
The Tribunal rejected the Commissioner's narrow interpretation of institutional consumers, emphasizing that construction activities are considered part of the service industry. Citing the Finance Ministry's categorization of construction-related services, the Tribunal concluded that the benefit claimed by the appellants under Sl. No. 1C applied to their clearances. The Tribunal highlighted the importance of recognizing construction as a service industry and upheld the appellant's contention based on established legal principles and government policies.

Applicability of benefit under Sl. No. 1C of the Notification:
Relying on precedents and detailed arguments presented by both parties, the Tribunal ruled in favor of the appellant, setting aside the impugned order and providing consequential relief. The decision was based on the appellant's eligibility for the concessional rate of duty under the relevant notification and the correct interpretation of institutional consumers, particularly in the context of the construction industry. The Tribunal's judgment emphasized consistency with legal principles, precedents, and government policies in determining the appellant's entitlement to the benefit under the notification.