2005 (3) TMI 137 - SC - Central Excise

Whether Appellants who manufacture cement, concrete, hollow and solid blocks classifiable under Tariff Item No. 68.07 can claim benefit of Notification No. 64/88, dated 1st March, 1988? Held that - The Collector has erred in holding that it was not the case of the Department that the blocks and slabs manufactured by the Respondents are not used in pre-fabricated buildings. A perusal of the show cause notice shows that it was the specific case of the Department that the goods manufactured by the Appellants were not intermediates or components of pre-fabricated buildings. The Collector has omitted to note that it was not the case of the Appellants that their goods could be used in pre-fabricated buildings or that they constituted intermediaries of components of a pre-fabricated building. The Collector has also erred in relying upon the Indian Standard Specification for Concrete Masonry Units and concluding that the blocks which are being manufactured according to the ISI Specification would become entitled to the benefit of the Notification. As has been mentioned earlier it is only such blocks as are intermediaries or components of pre-fabricated buildings that get the benefit of the Notification. Merely because some block, which is not a component or intermediary of a pre-fabricated building, has an ISI specification does not mean that block gets the benefit of Notification. The Order of the Collector was therefore entirely erroneous and has been rightly set aside by the Tribunal. There is no infirmity in the order of the Tribunal. Appeal dismissed.

Summary

Issues: Classification under Notification No. 64/88 for cement blocks, slabs, and lintels.

Classification under Notification No. 64/88:
The case involved the classification of cement blocks, slabs, and lintels under Tariff Item No. 68.07 for benefit under Notification No. 64/88. The Notification provided a concessional rate of duty for goods constituting intermediates or components of pre-fabricated buildings falling under specific headings. The dispute arose when the Revenue contended that the Appellants' goods did not qualify as intermediates or components of pre-fabricated buildings as per the Notification's clear language.

Interpretation of Notification:
The Supreme Court emphasized that the plain language of a notification must be adhered to when interpreting its scope. The Court held that the concessional rate of duty was exclusively available to items like concrete beams and stairs, which constituted intermediates or components of pre-fabricated buildings. The Court rejected the argument that blocks, slabs, and lintels could individually qualify for the benefit without being intermediaries or components of pre-fabricated buildings. The absence of a specific distinction in the Notification indicated that all items listed must serve as intermediaries or components of pre-fabricated buildings to qualify.

Analysis of Tribunal's Decision:
The Tribunal ruled against the Appellants, denying them the benefit of the Notification. The Court upheld the Tribunal's decision, stating that the Collector's order in favor of the Appellants was erroneous. The Collector's reasoning, based on the use of blocks in pre-fabricated buildings and ISI specifications, was deemed flawed. The Court highlighted that the Department's case was clear that the goods did not constitute intermediates or components of pre-fabricated buildings, contrary to the Collector's interpretation. Merely meeting ISI specifications did not automatically entitle blocks to the Notification's benefit if they did not serve as intermediaries or components of pre-fabricated buildings.

Final Decision:
The Supreme Court found no fault with the Tribunal's decision and dismissed the Appeal. The Court declined to interfere with the Tribunal's ruling, emphasizing that the Collector's order was erroneous and rightly set aside. The Appellants were not entitled to the benefit under Notification No. 64/88 for their cement blocks, slabs, and lintels. No costs were awarded in the case.