CEMENTO CORPORATION LIMITED Vs. COLLECTOR CENTRAL EXCISE
SUPREME COURT OF INDIA
CEMENTO CORPORATION LIMITED
COLLECTOR CENTRAL EXCISE
Click here to view full judgement.
RUMA PAL, J. -
(1.)THE issue in this case relates to the classification for the purposes of excise duty of a product manufactured by the appellant, which the appellant claims is a cement substitute and not cement. THE product is 'Lympo' which is a lime-pozzolana mixture which the appellant manufactures under the trade name "Gajaraj Lympo". THE respondent's claim that lympo is in fact a variety of cement and was exigible to duty as such .
(2.)THE issue has arisen in the context of the Central Excises and Salt Act, 1944 prior to its amendment in 1985. Cement was then specified in Tariff Item (T. I.) 23 in the First Schedule of that Act and was exigible to duty. THE relevant entry then read as follows :
Item No. 23-Cement
Item No. Tariff DescriptionRate of duty
(1)Grey portland cement (including ordinary portland cement, portland-pozzolana cement and portland slag cement), masonary cement rapid hardening cement, low heat cement and waterproof (hydrophobic) cement Two hundred and fifty rupees per matric tonne
(2)All othersForty per cent ad valorem
According to the appellant since its product was not cement, it was not classifiable under T. I. 23 and was classifiable under T. I. 68 which covered all other goods, not elsewhere specified excluding a few specified articles which are not material to the case before us.
The appellant's further case is that the manufacturing activity had been started in 1982 with technical assistance from the Khadi and Village Industries Commission in Patna, Bihar and, therefore, was also entitled to the benefit of notification No. 116/75-CE dated 30/04/1975 by which products of village industries falling under tariff Item 68 of the First Schedule to the Central Excises and Salt Act, 1944 were exempted from the whole of the duty of excise leviable thereon provided the Khadi and Village Industries Commission certified that the said products were the genuine products in the industry as specified in the Schedule to the Khadi and Village Industries Commission Act, 1968. The Director of KVIC by his letters dated 1/2-4-1981 and 2-3-1983 had, according to the appellant, certified that technical consultancy services were being extended to the appellant to establish a Lympo unit (Lime Pozzolana Mixture) and that lympo was the substitute of cement it wasa masonary binder and not cement and that the product fell under "Village Industry" as specified under the Khadi and Village Industries Commission Act, 1956. On the basis of this certificate, the appellant cleared the lympo manufactured, at Nil rate of duty.
(3.)ON 31/07/1982, the Superintendent, Central Excise, Ranchi directed the appellant to clear its product lympo byclassifying the same under T. I. 23(2) upon payment of duty as specified against that tariff entry. Samples of the appellant's product were taken on 8/10/1982. ONe of the samples was given to the Chemical Examiner, Customs House, Calcutta which according to the respondent submitted a report that Lympo could be regarded as a type of cement. The report is not on record. By letter dated 3/05/1983 issued by the Superintendent, Central Excise, Ranchi the appellant was again directed not to clear the product without payment of duty andproper licence treating its product as classifiable under T. I. 23(2). the appellant filed a writ application before the High Court at Ranchi vide C.W.J.C.No. 691 of 1983 challenging the demand. The Court directed a fresh sample of the appellant'sproduct to be drawn. This was done on 14/09/1983 and sent to the Director General, National Test House. Alipore, Calcutta. The Test certificate states :
"the said sample fails to meet the requirement as covered under tariff item No. 23(1) of Central Excises and Salt Act, 1944. It appears that tariff item 23(2) of the said Act does not specify any particular variety of cement but include all others. In absence of the identity of the variety of cement it will not be possible to comment on the material covered under T. I. 23(2) on the basis of the result of test carried out".
On the basis of this report, the High Court dismissed the writ application and gave the appellant liberty to challenge the directive of the Superintendent, Central Excise before the Collector, Central Excise. The appellant duly approached the Collector (Appeal) who by an order dated 3/04/1984 set aside the impugned directive but leaving the question of classification open for a fresh determination in accordance with the prescribed procedure.
Copyright © Regent Computronics Pvt.Ltd.