2017 (1) TMI 1130 - AT - Central Excise

Cement and clinker - whether the cement cleared by the appellant to the customers covered under serial No.1C of the N/N. 4/2006-CE dated 01.03.2006 read with Standards of Weights and Measures (Packaged Commodities) Rules, 1977 and whether such consumers can be categorized as institutional or industrial consumer? - Held that - the issue is squarely covered by CESTAT decisions in the case of M/s HEIDELBERG CEMENT (INDIA) LTD And M/s ULTRA TECH CEMENT LTD Versus COMMISSIONER OF CENTRAL EXCISE 2014 (8) TMI 251 - CESTAT MUMBAI , where it was held that packages of commodities containing a quantity of more than 25 kg or 25 litre excluding cement and fertilizers sold in bags upto 50 kg and packaged commodity meant the industrial or institutional consumer are excluded from the provisions of the said Rules - the appellant would be eligible for the benefit of Notification No. 4/2006 under Sr. No. 1C of the table annexed to it - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether the appellant is entitled to the benefit of Notification No.-4/2006-CE dated 01.03.2006 (as amended) for cement cleared to customers covered under serial No.1C of the notification.

Analysis:
The appellant, M/s Ambuja Cements Ltd., appealed against an order confirming a demand of ?36,95,376/- and denying them the benefit of Notification No.-4/2006-CE dated 01.03.2006. The key issue was whether the cement cleared to customers covered under serial No.1C of the notification could be categorized as institutional or industrial consumers. The appellant cleared cement to various buyers, including manufacturers of excisable items, construction service providers, government departments, and charitable institutions/trusts, among others. The duty liability was discharged at a concessional rate of ?400/- MPT as per the notification.

The notification specified that to qualify under Sl. No. 1C, the retail sale price of the goods must not be required to be declared under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977. The issue was found to be similar to previous CESTAT decisions, such as Grasim Industries Ltd. vs. Commissioner of Central Excise and Heidelberg Cement (India) Ltd. The Tribunal held that sales to builders/developers for the manufacture of Ready Mix Concrete (RMC) would fall under industrial consumers, and sales to builders/developers would qualify as sales to institutional consumers. The principle of ejusdem generis was discussed to determine the scope of institutional consumers.

Referring to the decisions in Grasim Industries Ltd. and Heidelberg Cement (India) Ltd., the Tribunal concluded that the appellant was eligible for the benefit of Notification No. 4/2006 under Sr. No. 1C. The Tribunal also cited precedents like Mysore Cement Ltd. and India Cement Ltd., where the benefit of the notification was upheld for cement cleared to industrial/institutional consumers. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant.

In conclusion, the Tribunal's decision favored the appellant based on the interpretation of the notification and previous case law, establishing the eligibility of institutional/industrial consumers for the benefit of Notification No. 4/2006.