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2022 (3) TMI 400 - AT - Central ExciseArea based exemption - Ready Mix Concrete - exemption Notification No.12/2012-CE dated 17.03.2012 - period April, 2014 to September, 2015 - larger period for confirmation of demand in terms of Section 11A(4) of the Central Excise Act, 1944 - concessional rate of duty at the rate of 2% in terms of Notification No.1/2011-CE dated 01.03.2011 - Notification No.12/2016-CE dated 01.03.2016 - Ready Mix Concrete (RMC) manufactured and used at their site - period April, 2016 to June, 2017 - extended period of limitation - suppression of facts - HELD THAT - There were contrary judgments on the issue however, finally the hon ble Supreme Court in the case of M/S LARSEN TOUBRO LTD. ANOTHER, ECC CONSTRUCTION GROUP VERSUS COMMISSIONER OF CENTRAL EXCISE, HYDERABAD 2015 (10) TMI 612 - SUPREME COURT held that the exemption under Notification No.4/97-CE which is identically worded to Sr.No.144 of Notification No.12/2012-CE dated 17.03.2012 is inapplicable to Ready Mix Concrete - the Apex Court held that RMC is not the same as Concrete Mix and exemption is granted to Concrete Mix only and not to the Ready Mix Concrete. In view of the above judgment, it is clear that the assessee s product i.e. Ready Mix Concrete (RMC) is not eligible for exemption under Notification No.12/2012-CE dated 17.03.2012 (Sl.No.144) which is pari materia to the exemption entry provided in Notification No.4/97-CE involved in the case of LARSEN TOUBRO. Extended period of limitation - Suppression of facts - HELD THAT - There is absolutely no suppression of fact on the part of the assessee with intent to evade payment of duty therefore, the judgments relied upon by the Revenue are not applicable in the facts of the present case. Accordingly, the entire demand is under extended period i.e. from April, 2014 to September, 2015 and April, 2016 to June, 2017 whereas, the Show Cause Notice was issued on 15.04.2019 therefore, the entire demand is time barred. The adjudicating authority had rightly extended the benefit of exemption notification in respect of Ready Mix Concrete (RMC) used by the assessee in their manufacturing premises for construction work hence, the demand for the period April, 2016 to June, 2017 was rightly dropped by the adjudicating authority on the ground of its merit - other issues such as claim of exemption N/N. 67/95-CE and N/N. 2/2011-CE dated 01.03.2011 (Sl.No.46) not dealt with. Appeal allowed in part.
Issues Involved:
1. Eligibility for exemption under Notification No.12/2012-CE dated 17.03.2012 for Ready Mix Concrete (RMC) for the period April 2014 to September 2015. 2. Invocation of the extended period for confirmation of demand under Section 11A(4) of the Central Excise Act, 1944. 3. Eligibility for exemption under Notification No.67/95-CE dated 16.03.1995 for RMC manufactured and used captively at the site. 4. Eligibility for concessional duty rate of 2% under Notification No.1/2011-CE dated 01.03.2011. 5. Eligibility for exemption under Notification No.12/2016-CE dated 01.03.2016 for the period April 2016 to June 2017 for RMC manufactured and used at the site. Detailed Analysis: 1. Eligibility for Exemption under Notification No.12/2012-CE: The Hon’ble Supreme Court in the case of LARSEN & TOUBRO LTD. Vs. CCE (2015) held that the exemption under Notification No.4/97-CE, which is identically worded to Sr. No.144 of Notification No.12/2012-CE, is inapplicable to Ready Mix Concrete (RMC). The court concluded that RMC is not the same as Concrete Mix, and the exemption is granted only to Concrete Mix, not RMC. Consequently, the assessee’s product, RMC, is not eligible for exemption under Notification No.12/2012-CE dated 17.03.2012 (Sl.No.144). 2. Invocation of Extended Period for Confirmation of Demand: The issue of limitation is based on the facts of each case. The assessee had a bonafide belief in their eligibility for the exemption based on previous judgments in their favor, such as CHIEF ENGG. RANJIT SAGAR DAM and SIMPLEX INFRASTRUCTURES LTD. The assessee regularly filed ER-1 returns, declaring the product as "Concrete Mix/Ready Mix Concrete" and claiming the exemption under Notification No.12/2012-CE. This explicit disclosure in ER-1 returns and invoices indicates no suppression of facts. The department's failure to act on this information within the normal period negates the allegation of suppression with intent to evade duty. The entire demand is under the extended period and is thus time-barred. 3. Eligibility for Exemption under Notification No.67/95-CE: The adjudicating authority rejected the claim for exemption under Notification No.67/95-CE, stating that RMC and civil construction work are not considered capital goods as defined under Rule 2(a) of the Cenvat Credit Rules, 2004. Therefore, the benefit of Notification No.67/95-CE dated 16.03.1995 is not available to the assessee. 4. Eligibility for Concessional Duty Rate of 2%: The assessee claimed that the demand, if any, should be confirmed at the concessional rate of 2% under Notification No.1/2011-CE. The adjudicating authority found no documentary evidence of reversal of proportionate credit and that the procedure prescribed under the Cenvat Credit Rules, 2004, was not followed. Hence, the claim for a concessional rate of duty was rejected. 5. Eligibility for Exemption under Notification No.12/2016-CE: Notification No.12/2016-CE exempts RMC manufactured at the site of construction for use in construction work at such site. The revenue argued that the exemption is only available if the entire RMC manufactured at the site is used at the site. The adjudicating authority correctly held that the exemption applies to the quantity of RMC used at the construction site, and the quantity cleared outside the factory is chargeable to excise duty. The department's appeal on this ground was dismissed, and the adjudicating authority's decision to extend the benefit of the exemption for the period April 2016 to June 2017 was upheld. Conclusion: The assessee's appeal is allowed, and the revenue's appeal is dismissed. The demand is time-barred, and the assessee is entitled to the exemption for the period April 2016 to June 2017. The adjudicating authority's decision is modified accordingly.
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