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2018-VIL-688-CESTAT-AHM-CE

M/s LARSEN & TOUBRO LTD Vs C.C.E. AHMEDABAD-II

Central Excise - Whether Ready Mix Concrete manufactured by the appellant is eligible for exemption under Notification 12/2012 dated 17.03.2012 as ‘concrete mix’ manufactured at the site of construction for use and construction work at such site under Chapter 38 of the CETA – Demand invoking extended period 

HELD –there is no change in the Central Excise Tariff Heading in so far as the ‘ready mix concrete’ is concerned. The description ready mix concrete has been replaced by the description “concrete ready to use known as “ready mix concrete (RMC)” - the description and the chapter under the exemption notification remain identical. There is no change description under the Notification examined by the Hon’ble Apex Court earlier when compared to the description and heading in the Notification is dispute in the present proceedings - Hon’ble Apex Court has agreed with the observation of the adjudicating authority regarding the distinction between RMC and concrete mix - any changes in the IS Specifications cannot be used to distinguish the decision of Hon’ble Apex Court - Ready Mix Concrete and Concrete Mix are two different products 

Since the issue was of interpretation the benefit of limitation has to be extended to the appellant - no personal penalty can be imposed on Project Manager - The demand against appellant for the period beyond the normal period of limitation is set aside. The penalties imposed are also set aside - the appeal is partly allowed

 

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  • CESTAT holds that freight is not includible in assessable value where assessee clears pipes and fittings to own site for pipeline construction under composite contract and valuation is done in terms of Rule 8 of Central Excise Valuation Rules;
  • Since assessable value has not been arrived at in terms of transaction value but instead, by using the cost construction method in terms of CAS-4 Accounting Standards, freight element cannot be considered for determining assessable value; However, CESTAT clarifies that freight cannot be claimed as applicable deduction where deduction method has been adopted;
  • As regards supply of goods to independent buyers, CESTAT observes that as sale takes place at factory gate and is complete in terms of sales tax provisions, whereby freight is separately agreed between both parties, freight charges would not form part of assessable value, relies on SC decision in Escorts JCB Ltd;
  • Rejecting Revenue contention that Rule 7 shall be applicable since pipes and fittings are stock transferred to site, CESTAT observes that said Rule has applicability only where goods are cleared from depot or premises of consignment agent which is not true in present case  : Mumbai CESTAT
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