OIO/Ultratech

ci I W,T- ITIMEtTIT
alT4S5' %—az1- Tii1V4-
Office of the Commissioner of Central Goods and Service
Tax, Kutch (Gandhidham)
40-F-8, tviencipivl
4 TRYE- ?TO 82, 0-
2/7-vreiv-- T117-4, TAX
, T1YtfiE1777--370201 MAR KET
Plot No. 82, Sec -8, Opp. RamleelaMaidan, Gandhidham
3 70201
F.No.: V/15-41/Adj/2017-18 By RPAD/SPEED POST/HAND DELIVERY
DIN: 20210464WX000081868D

11,(1 antz i1(541 arrkRrtur-41- 23.04.2021

ORDER IN ORIGINAL NO. Date of order
KCH-EXCUS-000-COM-01-2021-22 `31141
Date of Issue 23.04.2021

q 9 qciti 1
*WI .3fltRT 31710.,
'.-4'1"zT q- 1 c.i,t)ciicK •---§, TMZITIT
Ordered by
Pramod A. Vasave
Commissioner,
Central Goods & Service Tax,
Kutch, Gandhidham

M/s. UltraTech Cement Ltd., Survey No.

24/25/27/30, Sevagram, Vayor, Naliya
In the case of Kutch

-1-RuTI-
d-rall RI. TedAi Show Cause Notice No. & Date
SCN No. Commr./15/2017-18 dated 04.01.2018

fo"ks'klwouk/ NOTE BELOW

1. ailtRI •V), 9Fr tf Wit t, 024 410 3717:1)1T
ti bs) t
This copy is granted free of charge for private use of the person to whom it is
issued.

2. 1 afTkRT tf 3171-61:M Qcgiq 311tft:FI 1944 ffIRT 35 (1)(r) 31t9- 3TtlfAzi

arRr--R-ur t 3Tti1a- TiSd•CP t I altgf miLki Os) 4 urtR31- Trek' 4 31-414 q6 311:1
,tf ,z-asI 1tiaAci ct), ,661244, •Rj- 31-45ftzt 3TRI5RTT,
31-81
:1-
4T4F4 ,4.45, 0-20, .R:f2I-
d-a. 61\411tei 14EfTt 31-g11cI4T4-380016 ,61

Any person aggrieved by this order may prefer an appeal to the Appellate
Tribunal under section 35 B (1) (a) of the Central Excise Act, 1944. Such an
appeal should be addressed to the Registrar and filed within three months from
the date of communication of the order with the Assistant Registrar, Customs,
Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench, 0-
20, New Mental Hospital Compound, Meghani Nagar, Ahmedabad — 380 016.

3. iedt 4 VWT fr 3i1 4vT f+71-rw 61t, \3*(1 iptRI

ci) 31-rd-zrE*H-11-1 cii \Liev-1 (Q-1,
1 Rk 4111-Dia t-41-

The appeal should be filed in quadruplicate and should be accompanied by an

equal number of copies of the Order appealed against (one of which at least
should be a certified copy)

4. *-
4171 •Rj . 3T.RAzFI, 1944 zITRT 35 31•0119f49-nd- IIIc1 aiTWIW I 3ili1a.
-c4
.RP-rd f cpçj 4ct) tR- fct,1%(-1 .A1 31-qta- * er,
*112.ict) ,a411 T5, cqIc 1T ,e)clict) 3141EATI- 3VRWul- M-1 31-41- 1=-4T\311q I

Page 1 of 37
 OIO/Ultratech

The requisite fee as prescribed under Section 35B of the Central Excise Act,
1944, as shown below should be paid in the favour of the Assistant Registrar,
Customs, Excise and Service Tax Appellate Tribunal through any Nationalized
bank indicated in the place where the bench is located by crossed demand draft
attached to the appeal.

c04-1 <Lit.,
..1r/ 9-r-49-R/ Provision 411. /Fee
SI.No.
1. .-16i Ni" r't .11-41 - P-1-r4-11 i-r vrr-- ilRI all-R- -4-rr?). Trz). Tfik r't ilRI . .1,000/—
\sILN 5 9TR31. 3TQT-T37T-0 4711 t I
Where amount of duty and interest demanded and
penalty levied is Rs.5 Lakhs or less
2. ‘7If Rj. 'flNI TT Trfk .rr viT- .er 71- flRi W:17 5 ..fU t . 5.5,000/-
3Tf5 Alt-9. W:1- 50 'aTR3f tf 3Tfiti- -1b51 t I
Where amount of duty and interest demanded and
penalty levied is more than Rs. 5 Lakhs but not
exceeding Rs.50 Lakhs
3. v161 Rj--.•er ilNI P..4-rlifit Tr7 vir- • '11..41 -117 50 FR3r t3T-R5t I v.10,000/
Where amount of duty and interest demanded and
penalty levied is more than Rs. 50 Lakhs
5 c4‘3041q 3TRIf4zIli, 1944 ZTZZITzr \3cLilq (3-1IR.) f4411.,
200144111 3iTTZ ,flort

Attention is also drawn to the provisions contained in Chapter-VIA of the Central

Excise Act, 1944, as well as Central Excise (Appeals) Rules, 2001.

6. 31P)- zit IThcaqIullc1Igf4), -191.- 01-06-2013 t3Ttl, z1Rch)i0c1), TYRM./.14-11p1.43T24WIT9A

31-TiR 4;14 (*--
41-4 .3c4t< 41 , •Rit:R•.-3 4;14 (- 11-91'9u- 1i') IT
414 ()licr, 1- y)44471*("11)qiviN I *.')R-iict) 10-04-2013 3TRIRT9T t-11 W11. T:
6/2013— -4R1. '3c'-4Ic 15ccr9itf.) , 37/2013-111 R9".t.) `2,1T 5/2013-7

It is further informed that with effect from 01-06-2013, the appeal, if any, is
required to be filed in the revised/new form, i.e. E.A.-3 form (for Central Excise),
C.A.-3 form (for Customs) and S.T.-5 form (for Service Tax), as the case may
be, as notified vide Notification Nos. 6/2013-Central Excise (N.T.), 37/2013-
Customs (N.T.) and 5/2013-Service Tax, all dated 10-04-2013, respectively.

7. **13TT- T fR &OF, 11-13-T1f, 1944 c6-.) ZITRT 35 9) 'TzTT/3T2T4T

1.123TRIZR 1962 c61 STRT 129 t 3rcit9-, WI 3114124410. 2), 2014 TRI-gitRv-ITFM clVI 4ii t,
,161 ql13-T24-
- 4r '111- 3t17%-11f9-r-4)-91 f4-vrzr 3TP1clr-
149-r,
itr4r7T 4f4q0, 7.5% 4 31-qzitiziR., 311 -- uT WO -et Aiticpcng

An appeal against this order shall lie before the Tribunal on payment of 7.5% of
the duty demanded where duty or duty and penalty are in dispute, or penalty,
where penalty alone is in dispute, as provided under Section 35F of the Central
Excise Act, 1944 and/or Section 129E of the Customs Act, 1962, as the case
may be, as substituted vide Finance Act (No.2), 2014.

Notes: - [These notes are for broad general guidance only. The original text of the
Central Excise Act, 1944 and the Rules framed there under may be referred to before
taking any action in terms of these Notes.]

Page 2 of 37
 OIO/Ultratech

M/s. UltraTech Cement Ltd., Survey No.: 24/25/27/30, Sevagrann,

Vayor, Naliya, Kutch [hereinafter referred to as the 'noticee'], registered
with jurisdictional Central Excise Authorities vide Central Excise
Registration No.: AAACL6442LEM182, and GSTIN 24AAACL6442L1ZG.
They were engaged in manufacture of excisable products viz. Cement
Clinker and Ordinary Portland Cement classifiable under CETH No.:
25231000 & 25232910.

1.1 During the course of scrutiny of ER-1 Returns filed by the noticee for
the months of December, 2012 to June, 2017, it was observed that during
the aforesaid period, the noticee had cleared Cement in individual
packages of 50 Kgs. without printing MRP (Maximum Retail Price), on the
said packages, to some particular class of consumers, at concessional rate
of duty @ 12% ad-valorem by availing the benefit available under the
Notification No.: 12/2012-CE dated 17.03.2012, for the period of
December, 2012 to February, 2015, and at concessional rate of duty @
12.5% ad-valorem by availing the benefit of the Notification No.:
12/2015-CE dated 01.03.2015; for the period of March, 2015 to June,
2017, considering these consumers as Institutional Consumers and
Industrial Consumers. Such Consumers are (i) Builder & Contractors, (ii)
Government Bodies, (iii) Residential Building, School
Construction/Expansion (iv), RMC, Trust (v) Self Consumption (vi)
Hospital & Hotel to whom totally 2646332.3 MT Cement was cleared
during period of December, 2012 to June, 2017 at concessional rate.

1.2 It was observed that during the material period, the noticee
appeared to have cleared Cement in individual packages of 50 Kgs.,
without printing MRP on the said packages, to some particular class of
mentioned above, at concessional rate of duty @ 12% ad-valorem by
availing the benefit available under the Notification No.: No.: 12/2012-CE
dated 17.03.2012, for the month of December, 2012 to February, 2015,
and at concessional rate of duty of 12.5% ad-valorem by availing the
benefit of the Notification No.: 12/2015-CE dated 01.03.2015; for the
month of March, 2015 to June, 2017; considering these consumers as
Institutional Consumers or Industrial Consumers and supplied/cleared
totally 26,46,332.3 MT to them at the concessional rate during the period
of December, 2012 to June, 2017, under Sr. No.: 52 of the said
Notification.

Page 3 of 37
_ OIO/Ultratech

C 1.3 It appeared that the noticee cleared their finished goods, i.e.,
Cement in packaged form in bags upto 50 Kgs. by availing the
concessional rate of duty @ 12% ad-valorem from December, 2012 to
Feb, 2015, and @12.5% ad-valorem from March, 2015 to June, 2017
instead of normal rate otherwise applicable and the claim of clearance of
the impugned quantity of Cement to have been made to Institutional or
Industrial Consumer did not appear to be correct and was misleading
inasmuch as the subject supply covered under the present demand notice
had been made to Individual Contractors and Builders who were not
falling within the definition of Industrial or Institutional Consumers.

1.4 Therefore a show cause notice SCN No. Commr./15/2017-18 dated

• 04.01.2018 was issued to the Noticee for recovery of short paid Central
Excise duty amounting to Rs.136,45,18,225/- under Section 11A(1), of
the Central Excise Act, 1944 alongwith interest under Section 11AA of
Central Excise Act, 1944. Penalty was also proposed upon the Noticee
under Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of
the Central Excise Act, 1944.

2. The Noticee vide their letter dated NIL received by this office on
12.03.2021 submitted their defence reply in the case and contended as
under;

2.1 The notice mainly contended that the whole case of the
department rests on the interpretation of the provisions relating to
packaged commodities under the Legal Metrology (Packaged
Commodities) Rules, 2011 (hereinafter referred to as "the LMPC Rules")
which have been enacted under Section 52 of the Legal Metrology Act,
2009 and the object and purpose of LMPC Rules is to protect the
consumers who purchase the packaged commodities based on the
declaration made on the packages. In case of consumers who directly
purchase the goods from the manufacturers, after negotiating the price
and by specifying the quality, quantity, etc. the declaration on packages of
such commodities about the commodity and its maximum retail price are
of no relevance. Such consumers do not purchase the goods solely based
on the declaration given on the packages of the commodity. Therefore,
the LMPC Rules do not provide for the protection of such consumers. The
LMPC Rules do not contain any provision requiring the manufacturer to
declare the details of the commodity including the MRP to be declared on

Page 4 of 37
 OIO/Ultratech

the packages of such commodity sold to the said consumer. When

Explanation/Definition of LMPC Rules define industrial consumers or
institutional consumers, it only refers to those consumers who directly
purchase the commodity from the manufacturer for their own
consumption.

2.1.1 In the present case, the entire quantity of cement on which

the differential duty has been demanded was directly purchased by the
consumers for their own consumption. The consumers in question had not
bought the cement from the noticee based on the declaration on the
packages and neither have they sold the said cement to any other
consumer who had to purchase the cement based on the declaration given

• on the packages of cement.

2.1.2 Therefore, the entire quantity of cement cleared in bags with

clear indication that they are not for retail sale, are excluded in terms of
Rule 3 of the LMPC Rules, from the application of other provisions of
Chapter II of these Rules. Hence, the noticee had correctly paid excise
duty at the rate specified in SI. No.52 of Notification No.12/2012—CE dated
17.3.2012 as amended vide Notification No. 12/2015-CE dated
01.03.2015.

2.2 They further contended that in the show cause notice, it was
alleged by the department that the customers to which the noticee had
cleared cement at concessional rate of duty are not covered by the
definitions of "institutional consumers" or "industrial consumers" as per
Rule 2(bb) and Rule 2(bc) of the LM Rules, except for clearances made to
hotels and hospitals. The show cause notice alleges that the definition of
"institutional consumers" under LMPC Rules, does not cover service
industries that are not similar to service industries like transport, hotel
and hospital which provide comfort, care etc. to people.

2.2.1 The department has further alleged that the service industry
referred to in the definition strictly refers to the service industry that
provides services only rather than providing tangible objects like
buildings, etc. Therefore, the individual contractors/builders/government
bodies/trusts etc. to whom the clearances are made by the noticee at
concessional rate of duty, do not qualify as "institutional consumers".

Page 5 of 37
 OIO/Ultratech

2.2.2 The show cause notice has failed to elaborate as to how the
above categories of buyers would not fall under the definition of "industrial
consumers". The noticee cleared cement in packaged form to various
Builders, Contractors, Govt. bodies and State Govt. Departments,
Educational Institutions, Trusts, etc who use the cement for their own
construction activity while rendering their respective services. These
buyers are clearly covered by the definition of "Institutional Consumers".
Irrespective of the amendments to the definition of "institutional
consumer" during the relevant period, the following criteria are required to
be fulfilled for a consumer to be called an "institutional consumer":
(i) it must be an institution providing a service;
(ii) it must purchase the goods directly from the manufacturer;
(iii) the goods must be purchased for use by that institution itself
(i.e. not for resale)
(iv) the goods must have the declaration 'not for retail sale' [w.e.f.
14.05.2015]

2.2.3 In the present case, it is not in dispute that criteria (ii), (iii)
and (iv) above are fulfilled since there is no dispute that the goods are
purchased directly from the noticee by these categories of buyers for their
own consumption and the bags carried the declaration 'not for retail sale'.
The only point of contention is criteria (i), since the show cause notice
alleges that the since the definition of "institutional consumers" uses the
word "means", it has a restrictive meaning and the same will only cover
those service institutions or service industries which are like hotels,
hospitals or railways and not all service institutions.

2.2.4 They further contended that the scope of institutional

consumers is not limited only to service industries such as transportation,
hotels, etc. For the definition of "institutional consumers" prior to
06.06.2013, the expression 'like' has been used before the terms
transportation, Airways, Railways, Hotels, Hospitals. The word 'Like'
indicates for example. It is thus illustrative but not exhaustive. In this
regard reliance is placed on the judgment of the Hon'ble High Court of
Madras in the case of The State of Tamil Nadu vs. South India Drum
Manufacturing Co. - [1985] 60 STC 110 (Mad.) wherein the Hon'ble
High Court was concerned with the entry reading as under:
"Machinery dyes in the manufacture of drums and also raw
materials like 26,24, and 22 gauge CRCS sheets."

Page 6 of 37
 OIO/Ultratech

2.2.5 The Revenue in that case argued that the registration can be
taken to cover not all the raw materials, but only raw materials like 26, 24
and 22 gauges CRCS sheets. The assessee argued that certificate of
registration should be taken to cover all raw materials required for the
manufacture of drums and expression "like 26, 24 and 22 gauges CRCS
sheets" is only descriptive and not exhaustive of the raw materials. The
Hon'ble High Court did not agree with the revenue and held that the
expression "raw materials like 26, 24 and 22 gauges CRCS sheets" could
be taken to be only descriptive or illustrative and not exhaustive. The
Hon'ble High Court further held that where the word 'like' is used, it does
not restrict the meaning attributable to raw materials. Applying the ratio
of the above judgment, the expression "institutional consumer like
transportation, Airways, Railways, Hotels, Hospitals" cannot be restricted
to the specified categories. The interpretation of the definition of
institutional consumer adopted by the department, which form the basis
for the proposal to demand, is totally incorrect.

2.2.6 In any case, the expression "institutional consumer like

transportation, Airways, Railways, Hotels, Hospitals" for the definition of
"institutional consumer" during the period December 2012 to 05th June
2013 is followed by the phrase "or any other service institutions who buy
packaged commodities directly from the manufacturer for use by that
institution". Thus, it is crystal clear that the definition not only includes
service institutions like hotels, hospitals and railways but any other
service institutions which buy packaged commodities directly from the
manufacturer for own use.

2.2.7 Similarly, for the subsequent periods also, the definition of

"institutional consumers" clearly states "or such other service institutions
who buy packaged commodities directly from the manufacturer for use by
that institution" 106th June 2013 to 1.3th May 2015] and "or other
organization which buy packaged commodities directly from the
manufacturer or from an importer or from wholesale dealer for use by that
institution, and the package shall have declaration 'not for retail sale '114th
May 2015 onwards].

2.2.8 Thus, the interpretation in the show cause notice that

"institutional consumer" only means those institutions that provide
services like hotels, hospitals and transport, is contrary to the explicit

Page 7 of 37
 OIO/Ultratech

provisions of the LM Rules from time to time and also contrary to the
interpretation adopted by the Hon'ble Courts, as discussed in the
subsequent paras of this reply.

2.2.9 They further contended that Section 65(25b) and Section

65(30a) of the Finance Act, 1994 specifically cover commercial or
industrial construction service and construction of residential complex
service in the taxable service tax category. Therefore, the builders,
developers and contractors who are engaged in construction activity and
purchasing the cement directly from the noticee for their own use are also
covered by the definition of "industrial consumers".

2.2.10 The Hon'ble CESTAT in the case of Grasim Industries

Limited v. CCE — 2004 (175) ELT 779 (T) specifically held that when
packs of white cement are cleared to builders for their own use, such
packs would be meant for servicing the construction industry. The
contention of the department that construction is not an industry was
specifically rejected by the Hon'ble CESTAT in the aforesaid decision. The
show cause notice has failed to illustrate as to how these categories of
buyers and the buyers using cement as inputs in their factory would not
be covered by the definition of "industrial consumers" even if the same
are held to be excluded from the definition of "institutional consumers".

2.2.11 In the show cause notice, the department has also

alleged that the definitions of "institutional consumers" and "industrial
consumers" provided under Rule 2 of the LMPC Rules are not inclusive
definitions as they use the word "means". The show cause notice alleges
that the use of the word "means" restricts the definition of the terms to
what has been specifically mentioned therein and leaves no scope for
further addition.

2.2.12 The noticee relied on the decision of the Hon'ble CESTAT

Mumbai in the noticees' own case reported at M/s UltraTech Cement
Ltd. Vs. CCE Nagpur - 2014-TIOL-1433 wherein it was held as under:
"5.2 From the above, it can be seen 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. In other words, the
Rules exclude two categories - the first category is packaged
commodity containing a quantity of more than 25 kg or 25 litre and
cement and fertilizer bags containing more than 50 kg. The second

Page 8 of 37
 OIO/Ultratech

category is packaged commodity meant for industrial or institutional

consumer. As regards the second category there is no restriction
with respect to the quantity of the goods contained in the package.
There is a 'semi colon' between the two clauses. This would clearly
indicate that the word 'and' between the two clauses have to be
read disjunctively and not conjunctively. In other words, in respect
of both the above categories, the provisions of PC Rules would not
apply.

5.3 Further, 'institutional consumer' is defined to mean consumers

like transportation, Airways, Railways, Hotels, Hospitals or any other
service institutions who buy packaged commodity directly from the
manufacturer and 'industrial consumer' means those who purchase
the packaged commodity for use by that industry.

5.4 There is no dispute that the goods were sold by the appellant
directly to the builders/developers/Ready Mix Concrete (RMC)
manufacturers. RMC is an excisable product and therefore, the sale
of cement for manufacture of RMC would definitely come within the
category of sale to industrial consumers. As regards
builders/developers etc., construction activity is a service activity as
is well understood and there is also a Service Tax levy on
construction activity. Therefore, sale to such builders/developers
would certainly qualify as sale to institutional consumers. The
argument of the Revenue that since the sale is not to consumers
like transportation, airways, railways, hotels, hospitals and any
other service institution and since the builders/developers have not
been specifically included and, therefore, such sale would not qualify
as sale to institutional consumer is bereft of logic because only
certain service providers have been specifically mentioned therein;
others are covered by the expression 'like' and 'any other service
institution' similar to those specifically mentioned. The institutional
consumers mentioned are transportation, hotels and hospitals which
do not form any particular class. Therefore, the principle of ejusdem
generieswill not apply. Any service institution would qualify as
institutional consumers."

2.2.13 Subsequently, the aforesaid decisions of Grasim

Industries and UltraTech Cement Ltd. are followed by the Hon'ble CESTAT
in the case of Ambuja Cements Ltd v. CCE — 2018 (360) ELT 121 (T)
wherein it was held as under:
"4.1 As facts are similar to the facts of the decisions quoted above;
therefore, following the decisions in case of Grasim Industries Ltd.
(supra) and Heidelberg Cement and Ultra Tech Cement Ltd. (supra),
the appellant would be eligible for the benefit of Notification No.
4/2006 under Sr. No. 1C of the table annexed to it."

2.2.14 The above decisions have been followed by the Hon'ble

CESTAT at Ahmedabad in the case of Sanghi Industries Ltd. v. CCE &
ST, Rajkot - 2018 (361) E.L.T. 909 (Tn. - Ahmd.) wherein the Hon'ble
CESTAT hash held as follows:
"4. After careful consideration of the facts of the case and the
submissions of both the sides, it appears that the issue is squarely

Page 9 of 37
 OIO/Ultratech

covered by CESTAT decisions in the case of Grasim Industries Ltd Vs

Commissioner of Central Excise, Trichi - 2008-TIOL-2328-CESTAT-
Mad and Heidelberg Cement (India) Ltd and M/s Ultra Tech Cement
Ltd Vs CCE Naqpur, Raigad - 2014-TIOL-1433 (CESTAT Mum).
CESTAT Bombay in the case of Heidelberg Cement (India) Ltd and
M/s Ultra Tech Cement Ltd (supra) in its Paras 5.4 and 5.6 observes
as under:

5.4 There is no dispute that the goods were sold by the

appellant directly to the builders/developers/Ready Mix Concrete
(RMC) manufacturers. RMC is an excisable product and
therefore, the sale of cement for manufacture of RMC would
definitely come within the category of sale to industrial
consumers. As regards builders/developers etc., construction
activity is a service activity as is well understood and there is
also a Service Tax levy on construction activity. Therefore, sale
to such builders/developers would certainly qualify as sale to
institutional consumers. The argument of the Revenue that since
the sale is not to consumers like transportation, airways,
railways, hotels, hospitals and any other service institution and
since the builders/developers have not been specifically included
and, therefore, such sale would not qualify as sale to
institutional consumer is bereft of logic because only certain
service providers have been specifically mentioned therein;
others are covered by the expression 'like' and 'any other
service institution' similar to those specifically mentioned. The
institutional consumers mentioned are transportation, hotels and
hospitals which do not form any particular class. Therefore, the
principle of ejusdem generis will not apply. Any service
institution would qualify as institutional consumers.

5.6 In the Grasim Industries case (supra), this issue was

specifically examined by this Tribunal & it was held as follows:

"As rightly pointed out by the learned Counsel, as the

benefit offered under the Notification pertains to goods
cleared to industrial/institutional consumers and as this
aspect was overlooked by the Legal Metrology expert as
also by the learned Commissioner, the impugned order is
liable to be set aside. The Board's clarification on the
relevant question was wrongly by-passed by the
adjudicating authority. We have found favour with the
assessee's case in view of the clarification issued by the
C.B.E. & C., which is to the effect that no RSP requires to
be printed on the goods sold to industrial/institutional
consumers as defined under the rules framed under the
Standards of Weights and Measures Act and that such
goods would be covered under SL No.1B or 1C of
Notification No. 4/2006-C.E., by virtue of the Second
Proviso to the Explanation to SI. No.1C of the Notification
as amended. The Board's clarification squarely covers the
case in favour of the assessee."

Further, in the case of Mysore Cement Ltd. - 2010 (249)

E.L.T. 398, this Tribunal held that construction industry is
a service industry and benefit claimed by the appellants
under the aforesaid Notifications shall be admissible. The

Page 10 of 37
 OIO/Ultratech

said decision was upheld by the Hon'ble High Court of

Karnataka (supra).Again in the case of India Cement
Ltd. - 2009-TIOL-1464-CESTAT-MAD = 2009 (235)
E.L.T. 145 (T), it was held that cement cleared to
industrial/institutional consumers in 50 kg bags are eligible
for the benefit of Notification No.4/2006 under Sr. No.1C.
Thus it can be seen that this Tribunal as also the High
Court have been consistently holding that
institutional/industrial consumers are eligible for the benefit
of Notification No.4/2006 and Notification No.12/2012.

4.1 As facts are similar to the facts of the decisions quoted above;
therefore, following the decisions in the case of Grasim Industries
Ltd (supra) and Heidelberg Cement (India) Ltd and M/s Ultra
Tech Cement Ltd (supra), the appellant would be eligible for the
benefit of Notification No.4/2006 under Sr.No.1C of the table
annexed to it."

4.5 Further, the Tribunal in the case of M/s Prism Cement Ltd Vs
CCE Bhopal (supra) observes as under:-

"3. The applicability of concessional rate for the cement

cleared to builders in construction industry and educational
institution have been subject matter of decision by this
Tribunal. In Heidelberg Cements (India) Ltd M/s Ultra
Tech Cement Ltd Vs CCE, Naapur, Raigad - 2014 TIOL-
1433-CESTAT-MUM, the Tribunal held that any service
institution would qualify as institutional consumer, builders,
developers were held to be eligible for coverage in the said
category. The Tribunal in the case of Grasim Industries Ltd
Vs CCE, Trichy 2009 (238) ELT 655 (Tri-Che) relied on
the Board clarification dt.12.06.2008 to hold that Government
companies, construction companies and other
industrial/institutional consumers were eligible for such
concessional rate of duty. The Tribunal in appellant's own case
vide Final Order No.54122/2014, dt.13.10.2014 held that
when there is no requirement to declaration the RSP on the
package in terms of Packaged Commodities Rules, 1977 the
goods should be treated as if cleared in other than packaged
form and the concessional rate of duty in terms of Entry 1C
should be eligible. The Tribunal was deciding the issue of RSP
and the concession under the said Notification for exported
cement.

4. We find that the original authority found that hospitals, co-

operative societies, temples cannot be considered under the
category of institutional or industrial consumers. We find the
reasoning given by the original authority those schools,
educational institutions and hospitals are not service industry
in terms of Rule 2A of the Packaged Commodities Rules, 1977
is not tenable. The institutional consumer means those
consumers who buy cement directly from the manufacturers
for service industry like transportation including airway,
railway, hotel or any other similar service industry. We find
that educational institutions and hospitals are directly buying
cement from the assessee-appellant and rightly eligible for
concessional rate of duty as service institution. Even if it is
considered that these institutions do not come under the
category of other similar service industry, as per Rules, the

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 OIO/Ultratech

fact remains that the sale to these institutions are not covered
by the definition of retail sale as per Rule 2(q) of the said
Rules. Admittedly, the cement without marking of RSP has
been sold by the assessee-appellant directly to these
consumers and as such these transactions does not qualify as
retail sale in view of the statutory definition which requires
sale, distribution or delivery of such commodity through retail
sale agency or other instrumentality for consumption by an
individual. In the present case, admittedly, the sale being
direct without any intermediary involved, the criteria for retail
sale has not been fulfilled. As such we find wherever such
direct sale is effected the application of Packaged Commodities
Rules, 1977 will not be governed by Rule 3 for enforcement.

5. In view of the above position, We find that the denial of the

concession in terms of the above said notification for the
assessee-appellant on these grounds is not justifiable."

4.6 From above discussions, and the decisions cited, we are of the
considered view that the sales made to various categories of buyers
are covered under Rule 2A of SWM Rules, 1977 and such goods are
eligible for the benefit of Notification No.4/2006-CE (supra).

2.2.15 The noticee contended that the issue in question is squarely

covered by the above decision of the Hon'ble CESTAT Ahmedabad and the
said decision has been passed after relying upon a decision of the Hon'ble
CESTAT Mumbai in the noticees' own case.

2.2.16 Thus, the buyers like builders/developers, contractors, govt.

bodies, educational institutions, trusts etc. are required to be treated as
"institutional consumers" or "industrial consumers" under the LM Rules
and cement cleared to them would attract excise duty at the concessional
rate under SI. No.52 of Notification No.12/2012-C.E. dated 17.3.2012 as
amended. In the case of Grasim Industries v. CCE — 2009 (238) ELT
655 (T) the Hon'ble CESTAT held that in view of the Board Circular
F.No.124/82/2002/CX dated 12.06.2008, the benefit of Sr. No. 1C of
Notification No.4/2006-CE is available to the cement in 50 kgs bags
cleared to industrial / institutional consumers.

2.2.17 In view of the above, the entire demand proposed in the show
cause notice is liable to be dropped.

2.3 They further contended that as discussed supra, the issue

involved in the present case has been decided by the Hon'ble CESTAT in
the noticee's own case reported at 2014-TIOL-1433-CESTAT-MUMBAI. The
basis on which demand has been proposed in the show cause notice is
contrary to the order of the HOntle CESTAT in the noticee's own case.

Page 12 of 37
 OIO/Ultratech

Hence, the show cause notice is liable to dropped. This judgment of the
Hon'ble CESTAT Mumbai stands accepted by the Department and no
appeal has been filed by the Department against the said decision.

2.3.1 The Hon'ble CESTAT Delhi vide order dated 05.09.2014 in the
noticees' own case reported at 2015 (317) ELT 505 (T) has held that
concessional rate of duty would be applicable for the supply of cement
made to builders, contractors, government bodies, RMC manufacturers
and industry.

2.3.2 Again in the case of the noticees', the Hon'ble CESTAT Delhi in
UltraTech Limited (Rawan, Hirmi and Vikram Plant) v. CCE vide
Order No. A/52598-52601/2015-Ex-DB dated 12.08.2015 has
followed the decision dated 05.09.2014 (supra) and allowed the appeal in
favour of the assessee.

2.3.3 Similarly, the Hon'ble CESTAT Hyderabad in the noticees' own

case reported at 2018 (2) TMI 1396 - CESTAT HYDERABAD decided
the issue in the case of cement cleared by the noticee to construction
companies in 50 kg bags at concessional rate of 12% and set aside the
demands of differential excise duty.

2.3.4 Further, the Hon'ble CESTAT in the case of Mysore Cements

(Heidelberg Cement Group) v. CCE- 2010 (249) ELT 398 (T) and
Chettinad Cement Corporation v. CCE - 2015 (329) ELT 845 (T) held
that cement cleared to construction industry in 50 kg bags is not required
to be affixed with MRP and is eligible for benefit of exemption notification
no. Sr. No. 1C of Notification No. 04/2006-CE as amended, which is
parimateriato the exemption under SI. No. 52 of Notification No.12/2012-
CE dated 17.03.2012 as amended. The aforesaid decision of the Hon'ble
CESTAT in the case of Mysore Cements Ltd. has been upheld by the
Hon'ble High Court of Karnataka in the judgment reported at 2010 (259)
ELT 30 (Kar).

2.3.5 The noticee also relied on the decisions rendered in the

following cases:-

(i) Parasakti Cement Industries Ltd. v. C.C.E., Guntur [2019 (2) TMI
1095 - CESTAT Hyderabad]
(ii) M/s Jaypee Sikandrabad Cement v. C.C.E. & S.T., Noida [2019 (3)
TMI 512 - CESTAT Allahabad]

Page 13 of 37
 OIO/Ultratech

(iii)M/s Bharathi Cement Corporation (P) Ltd. v. CCE & ST, Tirupathi
[2019 (5) TMI 44 - CESTAT Hyderabad]
(iv) Shree Digvijay Cement Co. Ltd. v. C.C.E. & S.T., Rajkot [2019 (6)
TMI 1543 - CESTAT Ahmedabad]
(v) ACC Ltd v. C.C.E. - [2018 (359) ELT 572 (T)]
(vi) Birla Corporation Ltd v. C.C.E. - [2018 (360) ELT 124 (T)]
(vii) Prism Cement Ltd v. C.C.E. - [2017 (357) ELT 1003 (T)]
(viii)C.C.E.v. Lafarge India Pvt Ltd - [2017 (348) ELT 289 (T)]
(ix) India Cements Ltd v. C.C.E. - [2009 (235) ELT 145 (T)]
(x) Dalmia Cements (Bharat) Limited vs. CCE [2009-TIOL-255-
CESTAT-MAD]
(xi) Madras Cements v. C.C.E. [2009-TIOL-CESTAT-MAD]

2.3.6 In view of the above decisions, the show cause notice is liable
to be dropped in its entirety. The noticees further submit that a slew of
decisions passed by the Hon'ble CESTAT were challenged by the
Department before the Hon'ble Supreme Court. The Hon'ble Supreme
Court vide its order dated 27.11.2019 has dismissed all the 42 appeals
filed by the revenue and settled the issue in favour of the assessee.

2.4 The noticee further submitted that similar issues had been
raised in various other jurisdictions across the country in respect of
clearance made by many cement companies including the noticees. The
concerned adjudicating authorities dropped the duty demand and
extended the benefit of the notification to the assessee. The details of the
Order-in-Original are as follows:
Sr Party Name Order-in- Authority Customers involved in the
No Original No. matter
& Date
1 M/s Order-in- Commissio 1. Education, social, religious
Ultratech Original ner of organizations & Bodies who
Cement No.69 to Central have bought cement for
Ltd. 73/ BVR Excise, construction of building for
3afarabad Commission Bhavnagar their use; Builders, developers,
er/2008 contractors and construction
dated firms; I nfrastru ctu ra I
31.12.2008 Development projects;
Industrial units' Contractors of
roads bridges etc.;
Government Bodies; Self
consumption
2 M/s Order-in- Commissio 1. Education, social, religious
Ultratech Original No. ner of organizations & Bodies who
Cement 63 to Central have bought cement for
Ltd. Gujarat 68/BVR Excise, construction of building for
Cement Commission Bhavnagar their use; Builders, developers,
Works en/ 2008 contractors and construction
dated firms; Infrastructural
31.12.2008 Development projects;
Industrial units' Contractors of
roads bridges etc.;
Government Bodies; Self
consumption
3 Shree Order-in- Commissio Manufacture of RMC Pipes etc.'
Cement Ltd. Original No. ner of Builders; Trusts and

Page 14 of 37
 OIO/Ultratech

Beawar 43- Central institutions etc.' educational

44/2008/ Excise, institutions; Government and
CE/JP-II Jaipur corporations; contractors
dated
7.11.2008
4 M/s J.K. Order-in- Commissio Builders; Group Housing
Cements Ltd. Original No. ner of Societies; Contractors;
Mangrol 41- Central Government and Semi-
42/2008/ Excise, Government; Education
CE/JP-II Jaipur Institutions; societies and
dated Charitable Trust;
5.11.2008 Manufacturers.
5 M/s C.No.V/25/ Commissio Government agencies and
Rajashree 15/31/2008 ner of construction companies
Cement, -Adjn dated Central
Malkhed 8.10.08 Excise,
Belgaum
6 M/s.Vasavda OM No. Commissio Builders, Government
tta Cement, V.25/15/30 ner of Agencies, Industrial
Sedam /2008-Adjn Central manufacturers and internal
dated Excise, Consumption.
30.9.2008 Belgaum
7 M/s. Aditya Order No. Commissio Builders, contractors,
Cement (a 31/2009/CE ner of Government supplies etc
unit of /JP-II dated Central
Grasim 25.3.2009 Excise
Industries Jaipur
Ltd.)
Shambhurpu
ra
8 M/s Aditya Order No. Commissio Builders, contractors,
Cement, (a 50/CE/JP- ner of Industries using for
unit of 11/2009- Central construction, self-consumption
Grasim COMMR Excise,
Industries dated Jaipur
Ltd.) 30.11.2009
Shambhurpu
ra
9. M/s Ambuja Order-in- Commissio Educational, Social, Religious
Cement Ltd., Original No. ner of organizations,
Junagarh 09 to Central Builders/developers &
14/BVR/Co Excise, construction contractors,
mmissioner Bhavnagar Infrastructural Development
/2009 Projects, Industrial units who
dated have bought cement for use in
09.01.2009 their factory, Govt. bodies like
Gujarat State Civil Supplies
Corporation, Captive
consumption by the assessee

2.4.1 At para 18 in page 19 of the order-in-original dated

25.03.2009 the Commissioner of Central Excise, Jaipur recorded that an
order-in-original dated 08.10.2008 passed by the Commissioner of Central
Excise, Belgaum in the case of Rajshree cement was accepted by the
department. Similarly, at para 22 of the order-in-original dated
30.11.2009 (SI.No.8 of the table given above) the Commissioner of
Central Excise, Jaipur had recorded that the orders passed by
Commissioners on identical issue dropping the proceedings were accepted

Page 15 of 37
 OIO/Ultratech

by the Committee of the Chief Commissioners and therefore no appeal

had been filed against those orders.
2.4.2 Recently, in their own case for other units of the noticee, the
demands raised on identical grounds as the present show cause notice
have been dropped by the adjudicating authorities vide the following
orders:
Sr Unit Name Order-in- Authority Customers involved in
No Original No. & the matter
Date
1 M/s Ultratech 283- Commissioner Builders, contractors
Cement Ltd. 313/CEX/2020 of GST & working on govt.
Awarpur /C/NGP-1 Central Excise, projects, educational
Cement Works, dated Nagpur - 1 institutions, charitable
Chandrapur 07.07.2020 trusts, government
owned enterprises
2 M/s Ultratech 54 to 65/ Commissioner Builders, contractors and
Cement COMMRCE/20 of GST government bodies
Limited, 20 dated &Central
Reddipalayam 25.03.2020 Excise,
Tiruchirapalli
3 M/s Ultratech 05-06/ Commissioner Builders, contractors and
Cement COMMR/CEX/J of GST & government bodies
Limited, BP/2020 Central Excise,
Maihar, Satna dated Jabalpur
(M.P.) 25.09.2020
4 M/s Ultratech 07-08/ Commissioner Builders, contractors and
Cement COMMR/CEX/J of GST & government bodies
Limited, BP/2020 Central Excise,
Maihar, Satna dated Jabalpur
(M.P.) 25.09.2020
5 M/s Ultratech 03/CE/JC/NGP Joint Builders and contractors
Cement -11/2020 Commissioner
Limited, dated of GST &
Nagpur Cement 28.07.2020 Central Excise,
Works Nagpur - II
6 M/s Manikgarh 248-278/CEX Commissioner Builders and contractors
Cement /2020/C/NGP- of GST &
1 dated Central Excise,
06.07.2020 Nagpur - 1
7 M/s Manikgarh 282/CEX/2020 Commissioner Builders, contractors,
Cement, Unit - /C/NGP-1 of GST & educational institutions,
II dated Central Excise, government owned
07.07.2020 Nagpur - 1 corporations

2.4.3 They contended that all the above 7 Orders-in-Original have

dropped the demand after rightly observing that the issue is no longer res
integra and that the same has been settled by the Hon'ble Supreme Court
by way of dismissal of the 42 department appeals vide order dated
27.11.2019.

2.5 The noticee contended that the term 'industrial consumers' as

per the explanation/definition of LM Rules covers those consumers who
buy packaged commodities directly from the manufacturers/packers for

Page 16 of 37
 OIO/Ultratech

using in their industry for production, etc. The buyers to whom the noticee
cleared cement can be categorized as "Industrial Consumers". The
industrial manufacturers and other industries purchased cement in
packaged form from the noticee for use in construction of factory/building
etc. The said construction of building is in their industry for production
only.

2.5.1 They further submitted that department did not dispute the
fact that these industries/manufacturers which/who purchased the cement
from the noticees used the cement in their 'industry'. Therefore, it is an
undisputed fact that they are consumers who purchased the cement from
the manufacturer for using cement in their industry. Therefore, the
industries/manufacturers who purchased the cement from the noticees for
construction purpose in their own industry would be covered by the
definition of "industrial consumers" under Rule 2 of the LM Rules and the
quantities of cement sold to them in packaged form are liable to duty at
the rate specified in SI. No.52 of Notification No.12/2012-CE dated
17.03.2012 as amended.

2.6 The Noticee further submitted that the department alleged that
packaged commodity referred to in the LM Rules meant for institutional
consumers were commodities such as toiletries, butter, ketchup, soap, ice
cream, etc which were used for providing services to people by the service
institutions like hotels, airways, railways, hospitals etc. They contended
that no rules or provisions articulated under the LM Rules list the names
or the nature of the commodities which are meant to be supplied to
institutional consumers. The department tried to insert certain restrictions
and conditions into the provisions of the LM Rules which is not admissible.
Further, it is submitted that the department cannot go beyond the
provisions stipulated under the law. The department has also not
produced any evidence or cited any case laws to prove that only
commodities like soap, ketchup etc are meant to be supplied to
institutional consumers. Therefore, the aforesaid allegation in the show
cause notice is perverse and incorrect and the show cause notice is liable
to be dropped.

2.7 The noticee contended that the department failed to

appreciate that since there is no retail sale involved in the present case,
the question of applying LM Rules does not arise and therefore benefit

Page 17 of 37
 OIO/Ultratech

under Sr. No. 52 of Notification No. 12/2012-CE dated 17.03.2012 is

admissible to the noticees on this ground alone since the benefit is
available to cement cleared in packed condition where retail sale price is
not required to be affixed under the LM Rules. Chapter II of LM Rules is
applicable to packages intended for retail sale only as the provisions
contained in the said Chapter II are for affixing retail sale price on the
packaged commodities. Chapter II of LM (PC) Rules, 2011 starts with the
following heading:
"PROVISIONS APPLICABLE TO PACKAGES INTENDED FOR RETAIL
SALE"

2.7.1 Rule 2(1) of the LM (PC) Rules defines 'retail sale' of a

commodity to mean the sale, distribution or delivery of such commodity
through retail sales shops, agencies or other instrumentalities for
consumption by an individual or a group of individuals or any other
consumer. Thus, there must be sale or distribution or delivery by
whatever name called. Such sale must be through retail sale shops,
agencies or other instrumentalities. Such sale must be for consumption of
commodity by an individual or a group of individuals or any other
consumer. The fact is that in all instances in the present case the sales
were made directly to the consumer from the factory. The same is also
not disputed in the show cause notice.

2.7.2 They further contended that if the definition of retail sale is

read in whole then it would mean that sale has to take place through
someone. In other words, definition could also be read as 'sale,
distribution or delivery of such commodity through ....other
instrumentalities for consumption by an individual or a groups of
individuals or any other consumer'. However, there is no such agency or
instrumentality in the sales made to the categories of buyers in dispute in
the present case and the same have been directly sold to such buyers for
their own consumption. Once it is held that the sale is not a retail sale
then provisions of Chapter II, which applies only to packages intended for
retail sale, will not be applicable and therefore the provisions of LM Rules
will not apply and the noticees are not liable to declare retail sale price on
such quantity of cement sold in packed condition.

2.7.3 In view of the above, the noticee rightly determined the duty
payable on such quantity of cement and no differential duty as demanded

Page 18 of 37
 OIO/Ultratech

in the show cause notice is payable by them. The show cause notice is
liable to be dropped on this ground alone.

2.8 The Noticee further contended that excise authorities were not
having jurisdiction to decide whether the sales were made to industrial
consumers or institutional consumers or not. The excise department has
no jurisdiction to decide the applicability of LMPC Rules to the products
manufactured by the noticee. They further contended that even if the
department is of the opinion that the exemption is not available under
Rule 3, they ought to have sought clarification from the Controller of Legal
Metrology of the concerned State Government.

2.8.1 The aforesaid submission is supported by CBEC Circular No.

625/16/2002 — CX dated 28.2.2002 wherein it was clarified as under:
"7. The Standards of Weights & Measures Act, 1976, and the rules
made thereunder, are administered by the State Governments.
Instances of dispute could arise between the deptt. and the
assessee as to whether, in respect of a particular
commodity/transaction, the assessee is exempted from declaring
the retail price or not. In case of such doubt a clarification may be
obtained from the concerned Deptt. (generally the Metrology Deptt.)
of the State Government."

2.8.2 In the case of Castro! India ltd. v. CCE, Vapi - 2008 (223)
ELT 638 the Hon'ble Tribunal has held that the authorities under the
Standards of Weights and Measures Act are the best judge to decide as to
whether a product is required to be affixed with a MRP under the said Act
or not.

2.8.3 They further contended that since the provisions of LMPC

Rules are administered by the Legal Metrology Department and the fact
that the bags were marked with 'not for retail sale', no cause of action has
been initiated by the Legal Metrology department of the State, it is not
open to the Central Excise authorities to enter into the domain of another
department. Law is well settled that where there is another department
involved for implementation of the enactment to which such department is
associated with, it is not open for the other department to venture into
other's domain. For example, in regard to interpretation of Foreign Trade
Policy, Customs Department is not supposed to interpret the provisions of
the Policy in their own way. Number of Circulars have been issued by the
CBEC in this regard and a catena of judgments of the Hon'ble Tribunal and
various High Courts have also held so. Therefore, if at all any doubt is
there, the matter ought to have been referred to the Legal Metrology

Page 19 of 37
 OIO/Ultratech

Department of the State as per Circular dated 28.02.2002.

2.8.4 Ultimately whether a particular customer in the facts of the

case is an institutional consumer of industrial consumer will be decided by
the authorities under relevant statute and since in the present case there
is no such objection by the said authorities, the exemption cannot be
denied on the ground that the buyers were not institutional or industrial
consumers under the LM Rules. The show cause notice is liable to be
dropped on this ground alone.

2.9 The noticee contended that Section 11A(4) of the Central

Excise Act, 1944 provides for invocation of extended period of limitation of
five years in cases of fraud, suppression, etc. The department in the show
cause notice has invoked Section 11A(1) of the Central Excise Act, 1944
which provides for normal period of limitation of two years. Hence, the
demand beyond the normal period of limitation is not sustainable on this
account alone. They further contended that extended period cannot be
invoked in the present case as there is no suppression of facts with intent
to evade payment of duty. The present show cause notice dated
04.01.2018 proposed to recover an amount of Rs.136,45,18,225 in
respect of clearances of cement made to the various customers like
government departments, educational institutions, builders, contractors,
etc under the benefit of Notification No. 12/2012-CE during the period
from December 2012 to June 2017. However, the noticee submit that the
duty demand for the period from December 2012 to December 2015 is
beyond the normal period of limitation of two years.

2.10 They further contended that there was no suppression

whatsoever on the part of the noticee and the departmental authorities
possessed full information with regard to the present case. The
department was aware of the final products being manufactured by the
notice and the noticee were regularly filing monthly returns with the
departmental authorities from time to time. These returns clearly showed
that at all points of time, the departmental authorities were aware of the
finished goods being cleared by the noticee and the applicable duty rate
on the same. It is admittedly fact that the show cause notice arose from a
scrutiny of the ER-1 returns filed by the noticee. They further contended
that the factory of the noticee was regularly audited by the Central Excise
department. The records of the noticee were always available for

Page 20 of 37
 OIO/Ultratech

departmental scrutiny and they furnished all information required, as and

when sought by the department. Hence, there is no question of any
suppression or misstatement of facts, more so with intent to evade
payment of duty on the part of the noticee. For the above reasons, the
extended period of limitation cannot be invoked and the demand beyond
the normal period of limitation is liable to be dropped.

2.11 They further contended that the onus is on the department to

prove that the noticee had committed fraud or willfully suppressed facts
with intent to evade payment of duty. The show cause notice failed to
prove that the noticee acted with any malafide or fraudulent intent. There
is nothing on record to show the existence of fraud, collusion or
suppression of materials facts or information.

2.11.1 In this regard, the noticee relied upon the decision of the
Hon'ble Supreme Court in the case of Continental Foundation v. CCE -
2007 (216) ELT 177 (SC), wherein the Hon'ble Apex Court has held as
under:
"10. The expression "suppression" has been used in the proviso to
Section 11A of the Act accompanied by very strong words as 'fraud'
or "collusion" and, therefore, has to be construed strictly. Mere
omission to give correct information is not suppression of facts
unless it was deliberate to stop the payment of duty. Suppression
means failure to disclose full information with the intent to evade
payment of duty. When the facts are known to both the parties,
omission by one party to do what he might have done would not
render it suppression. When the Revenue invokes the extended
period of limitation under Section 11A the burden is cast upon it to
prove suppression of fact. An incorrect statement cannot be equated
with a willful misstatement. The latter implies making of an incorrect
statement with the knowledge that the statement was not correct."
(Emphasis supplied)

2.11.2 Further, the Hon'ble Supreme Court in the case of Padmini

Products - 1989 (43) ELT 195 (SC) held as under:

"8. .... As mentioned hereinbe fore, mere failure or negligence on

the part of the producer or manufacturer either not to take out a
licence in case where there was scope for doubt as to whether
licence was required to be taken out or where there was scope for
doubt whether goods were dutiable or not, would not attract Section
11-A of the Act. In the facts and circumstances of this case, there
were materials, as indicated to suggest that there was scope for
confusion and the appellants believing that the goods came within
the purview of the concept of handicrafts and as such were exempt.
If there was scope for such a belief or opinion, then failure either to
take out a licence or to pay duty on that belief, when there was no
contrail/ evidence that the producer or the manufacturer knew that
these were excisable or required to be licensed, would not attract

Page 21 of 37
 OIO/Ultratech

the penal provisions of Section 11-A of the Act. ... For the reasons
indicated above, the tribunal was in error in applying the provisions
of Section 11-A of the Act. There were no materials from which it
could be inferred or established that the duty of excise had not been
levied or paid or short-levied or short-paid or erroneously refunded
by reason of fraud, collusion or any wilful mis-statement or
suppression of facts, or contravention of any of the provisions of the
Act or of the rules made thereunder."
(Emphasis supplied)

2.11.3 In this regard, the noticees also relied on the following

decisions:

(i) Tamil Nadu Housing Board v. Collector [1994(74)ELT 9 (SC)]

(ii) CCE v. Chemphar Drugs [1989 (40) ELT 276 (SC)]
(iii)Jai Prakash Industries Limited v. CCE [2002(146)ELT 481 (SC)]

2.12 They further contended that there were various orders of the
Commissioners, Hon'ble CESTAT and Hon'ble High Court in the notice's
own case wherein the said dispute was decided in the favour of the
noticee time and again. Hence, they were under a bonafide belief that the
cement was cleared to the customers by correctly availing the benefit of
Notification No. 12/2012-CE as amended. The Hon'ble Supreme
Court has consistently held that in order to invoke the larger period of
limitation under the proviso to Section 11A(1), the revenue must establish
that the assessee deliberately failed to disclose correct information with
intention to evade payment of duty. There must be some positive act on
the part of the assessee to allege willful suppression. The Hon'ble
Supreme Court has held that when the information was in the knowledge
of the department, larger period cannot be invoked. They relied on
following judgements:-
(a) Anand Nishikawa Co. Ltd. Vs. CCE [2005 (188) ELT 149 (SC)]
(b) Pushpam Pharmaceuticals Company Vs. CCE [1995 (78) ELT 401
(SC)]
(c) Tata Iron and Steel Co. Ltd. Vs. Union of India [1988 (35) ELT
605 (SC)]

2.13 The Noticee further contended that the department alleged

that the noticee intentionally and deliberately mis-stated the facts by
considering their bulk consumers as institutional and industrial consumers
and by wrongly availing the benefit of payment of duty at concessional
rate. They submitted that the noticee were correct in availing the benefit
of Sr. No. 52 of Notification No. 12/2012-CE and Notification No. 12/2015-
CE in respect of the clearances made to the industrial & institutional
consumers. Further, the department merely proposed to impose penalty

Page 22 of 37
 OIO/Ultratech

under Rule 25 without even mentioning the sub-clause under which

penalty is to be recovered. It is a well-settled principle of law that where
there is no demand of duty, penalty cannot be imposed.

2.13.1 They contended that it is further alleged in the impugned

notice that the noticee contravened Rule 4, 6 & 8 of the Central Excise
Rules, 2002 with a clear intent to evade payment of duty. The noticee
submit that they have not contravened any of the provisions of the
Central Excise Act and Rules with intent evade payment of duty. The
noticee have followed the procedure prescribed under the Central Excise
Rules when the allegation that they have contravened the provisions of
Central Excise Rules is wholly incorrect and unsustainable in law. The
noticee submit that they have correctly availed the benefit of the
concessional rate of duty available under abovementioned notification in
respect of the cement cleared to Industrial/Institutional consumers. The
noticee further contended that penalty cannot be imposed under Section
11AC.

2.13.2 They further contended that mens rea is an essential

ingredient for imposition of penalty. In the present case, there is no
evidence on record to show that the noticee had deliberately not disclosed
the facts with intention to evade payment of duty. Mere failure is not
sufficient. It is an admitted position in the present case that there is no
suppression of facts. The noticee were under bonafide belief that the
view adopted by them was correct in law. The view entertained by the
noticee was supported by case laws and prevailing judicial opinion.
Hence, no penalty can be proposed to be imposed on the noticee.

2.13.3 In the matter of M/s. Hindustan Steel Ltd. v. State of

Orissa — 1969 (2) SCC 627, the Hon'ble Apex Court has observed as

under:

" Penalty will not be imposed merely because it is lawful to do so.

Whether penalty should be imposed for failure to perform a
statutory obligation is a matter of discretion of the authority to be
exercised judicially and on consideration of all the relevant
circumstances. Even if a minimum penalty is prescribed, the
authority competent to impose penalty will be justified in refusing to
impose penalty, where there is a technical or venial breach of the
provisions of the act or where the breach flows form the bonafide
belief that the offender is not liable to act in the manner prescribed
in the statute."

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2.13.4 The above decision of the Apex Court was followed by the
Hon'ble Tribunal in the case of Kellner Pharmaceuticals Ltd. Vs. CCE -
1985 (20) ELT 80 (T). The Hon'ble Tribunal held that proceedings under
Rule 173Q are quasi-criminal in nature and as there was no intention on
the part of the appellants to evade payment of duty. Therefore, proposal
for imposition of penalty cannot be justified. The ratio of these decisions
squarely applies in all force to the present case. In the present case, there
was neither any nnalafide intention nor any intention to evade payment of
duty.

2.13.5 The Noticee further contended that in any case the matter
involves an interpretation of the statutory provisions and it is settled law
that the proposal to impose penalty on the assessee is not sustainable
when the issue is one of pure interpretation. In this regard, they relied on
the following case laws:

(a) CCE Vs. Swaroop Chemicals, [2006 (204) ELT 492 (T)]
(b) Haldia Petrochemicals Vs. CCE, [2006 (197) ELT 97 (T)]
(c) CCE Vs. TELCO, [2006 (196) ELT 308 (T)]
(d) Siyaram Silk Mills Vs. CCE [2006 (195) ELT 284 (T)]
(e) CCE Vs. Sikar Ex-Serviceman Welfare Coop. Society Ltd.
[2006 (4) STR 213 (T)]
(f) Hindustan Steel Vs. State of Orissa [1978 (2) ELT (3 159) (SC)]
(g) Fibre Foils Ltd. Vs. CCE[2005 (190) ELT 352 (T)]
(h) ITEL Industries Vs. CCE[2004 (163) ELT 219 (T)]
(i) Birla Corporation Vs. CCE[2002 (148) ELT 1249 (T)]

2.14 The noticee further contended that it is a settled principle of

law that in cases where the original demand is not sustainable, interest
cannot be proposed to be recovered.

3. In the matter, the personal hearing in virtual mode through video

conferencing was held on 15.01.2021, which was attended by Shri Anand
Nainawati, Advocate(Authorised Representative) and Shri Bidhan Batik,
Assistant Manager(Accounts) on behalf of the Noticee and stated that the
Noticee has correctly availed the banefit of Sr. No. 52 of Notification
No.12/2012-CE and Notification No. 12/2015-CE in respect of the
clearances made to the Industrial & Institutional consumers. Shri Anand
Nainawati, Advocate reiterated in his submissions that Hon'ble Supreme
Court has dismissed all the 42 appeals filed by the Revenue and settled
the issue in favour of the assessee. Further they requested to drop the
subject Show Cause Notice.

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 OIO/Ultratech

DISCUSSION & FINDINGS:-

4. I have carefully gone through the facts the case, allegations leveled
in the Show Cause Notices, evidences available on record, applicable
provisions of law and the judicial pronouncements having bearing on the
issue. In the instant SCN, the issue before me is as to whether the
concessional rate of duty as per Sr. No. 52 of Notification No. 12/2012-
CE, dated 17.03.2012 as amended by Notification No. 12/2015-CE,
dated 01.03.2015 is applicable to the cement bags cleared in packages
of 50kg by the Noticee. It is alleged in the show cause notice that these
50 kg bags were illegally shown to be sold to 'Institutional/Industrial
Consumers' by stretching the definition of ' Institutional/Industrial
Consumers' to claim the undue benefit of concessional rate of duty in
terms notification cited supra.

5.1 As per the impugned SCN, the Noticee is engaged in the

manufacture of Cement and Clinker falling under sub heading No. 252329
of the Central Excise Tariff Act, 1985 (5 of 1986). The Noticee claimed to
have manufactured and cleared cement in 50 Kgs bags to
industrial/institutional buyers without declaring the retail sale price in
accordance Rule 3 of the Legal Metrology (Packaged Commodities) Rules,
2011. The Notification No. 12/2012-CE, dated 17.03.2012 as amended,
provided that the Cement cleared in packaged form will attract duty as
per the 'retail sale price' declared on those packages. It also provided
that where the retail sale price of the goods is not required to be declared
under the Legal Metrology (Packaged Commodities) Rules, 2011 and thus
not declared, the duty shall be determined as is in the case of goods
cleared in other than packaged form, which attract lower rate of duty.
Rule 3 of Legal Metrology (Packaged Commodities) Rules, 2011 specifies
category of consumers where if the goods are sold in packaged form, the
provisions of Chapter II of the Legal Metrology (Packaged Commodities)
Rules, 2011 shall not apply. It was alleged in the impugned show cause
notice that 50 Kgs of cement bags even if cleared to
Industrial/Institutional consumers are required to be declared retail sale
price and the concessional rate of duty under the Sr. No. 52 of
Notification No. 12/2012-CE dated 17.03.2012 as amended will not be
available on such clearances.

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 OIO/Ultratech

5.2 It was therefore alleged in the impugned show cause notice that
the Noticee has short paid Central Excise duty on clearances of cement
bags of 50 Kgs to Industrial/Institutional buyers by paying duty in respect
of such clearances, under Sr. No. 52 of Notification No. 12/2012-CE dated
17.03.2012, as amended vide Notification No. 12/2015-CE dated
01.03.2015 @ 12 or 12.5% ad valorem, instead of paying duty @ 12.5%
ad valorem + Rs.120/- PMT or Rs.125/- PMT, as applicable from time to
time, under Sr. No.51 of the said Notification, in as much as (a) they
have manufactured and cleared the goods in packaged form of bags of 50
Kgs only; (b) Such clearances were not excluded from applicability of the
Legal Metrology (Packaged Commodities) Rules, 2011 and (c) they have
suppressed the facts of clearances in bags of 50Kgs and illegally claimed
such clearances of cement made to industrial / Intitutional consumers.
Hence, the demand of differential Central Excise duty of
Rs.136,45,18,225/- alongwith interest was proposed in respect of
2646332.3 MT Cement cleared during December, 2012 to June, 2017

6. The Noticee in their defense submission has stated that they

cleared cement in packed form (in 50kg bags), inter alia to various rural
and urban retail consumers through dealer's network where maximum of
their cement is used and directly to end consumer like Govt.
Departments, builders/ developers, industrial manufacturers who use
cement for construction or as raw material for their products. These
buyers are covered by the definition of 'industrial consumer' or
institutional consumer' under explanation to Rule 2A Standards of Weight
& Measures (Package commodities) Rules, 1977 and Rule 3(ii) of Legal
Metrology (Packaged Commodities) Rules, 2011 during the period of
show cause notices.

6.1 In terms of Rule 2A(b) of the Standard of Weight & Measures

(Packaged Commodities) Rules, 1977 and in terms of Rule 3(ii) of Legal
Metrology (Packaged Commodities) Rules in respect of packages of
commodities meant for industrial consumers of institutional consumers,
the requirement of declaring MRP on the packages is not applicable. They
added that on all such bags of cement cleared to buyers viz. a) Social,
religious and charitable organizations, h) Builders, developers,
contractors and construction firms, c) Infrastructural development
projects, d) Government bodies, e) Manufacturers of finished goods, f)
Captive consumption, they did not declare MRP and specifically declared

Page 26 of 37
 OIO/Ultratech

as "Not for Resale". They also added that there is no dispute that they
are clearing the goods viz. Cement to various bulk buyers in package
form of 50 kg bag with specific declaration on the bag "Not for Resale"
and goods are not meant for further retail sale therefrom; but are to be
consumed by buyers for their own use. They have rightly claimed
concessions as per the provisions of Sr. No. 52 of Notification No.
12/2012-CE, dated 17.03.2012 and 12/2015-CE; dated 01,03.2015 and
the goods were cleared by paying duty as appropriate rate on 100%
transaction value for every consignment meant for industrial /
institutional buyers.

6.2 The contention of the Noticee is also that since the clearance of
goods 'under consideration has been made to Institutional/Industrial
consumers, they were not required to declare the RSP (Retail Sale Price)
on these 50 kg cement bags in terms of the provisions of Standard of
Weight and Measures Act, 1976 and the rules made thereunder. The
Noticee has further stated that the cement in 50 kg packaged form to
various to institutional / industrial customers like builders/contractors/
industrial consumers/ Government/ready-Mix-concrete producers/other
institutional consumers etc and submitted illustrative copies Of purchase
orders, copies of the relevant documents like work orders issued by
Govt. organization, registration certificate as Govt. Contractor etc. In
Support of their contention, they relied upon the decision of Hon'ble
Supreme Court dated 27.11.0219 in case of Commissioner of Central
Excise vis Madras Cement Company and others (Civil Appeal No:
6983/2009 and 41 Civil Appeals). The Noticee also relied upon
various decisions of Hon'ble CESTAT and requested to drop the
proceedings.

7. It would be relevant at this juncture to peruse the basic Notification

No. 4/2006-CE dated 01.03.2006 and as also amended by Notification
No. 12/2012-CE, dated 17.03.2012 meant for Cement Industries. The
relevant portions of the said Notifications are reproduced below:-

Under the first schedule to the Central Excise Tariff Act, 1985, a
tariff rate of Rs.400 per MT was specified for cement classified under
Chapter Sub Heading 252329. The tariff rate was raised to Rs.600 per MT
with effect from 01.03.2007. However, a concessional rate of duty was
provided for cement sold to certain categories of buyers vide Notification

Page 27 of 37
 OIO/Ultratech

No. 04/2006-CE dated 01.03.2006 as amended by Notification No.

04/2007-CE dated 01.012007. The relevant part of the Notification No.
04/2006 dated 01.03.2006 as amended by Notification No. 04/2007-CE
dated 01.03.2007 reads as under:

SI. Chapter Description of excisable Rate Condition

No. sub- goods
heading
"1. 2523 All goods manufactured in
29 a mini cement plant and
cleared in packaged form Rs.220 1
- per tonne
(1) ... Rs.370 1
(ii) ... per tonne

1A. 2523 All goods, whether or not

29 manufactured in a mini
cement plant, not covered
in S.No.1 and cleared in Rs.350
packaged form - —
per tonne
(i) of retail sale price not
exceeding Rs.190 per 50 12% of
kg bag or of per tonne retail sale —
equivalent retail sale price price
not exceeding Rs.3800;
(ii) of retail sale price
exceeding Rs.190 per 50
kg bag but not exceeding
Rs.250 per 50 kg bag or
of per tonne equivalent
retail sale price exceeding
Rs.3800 but not
exceeding Rs. 5000;
1B. 2523 All goods, manufactured Rs.250 1
29 in a mini cement plant, per tonne
other than those cleared
in packaged form;
1C. 2523 All goods, whether or not 14% or
—
29 manufactured in a mini Rs.400
cement plant, not covered per
in S. No. 1B, other than tonne,
those cleared in packaged whichever
form; is higher
Explanation. - For the
purposes of S. Nos. 1, 1A,
1B and 1C -
1. ...
2. "retail sale price"
means the maximum price
at which the excisable
goods in packaged form
may be sold to the
ultimate consumer and
includes all taxes, local or
otherwise, freight,
transport charges,
commission payable to
dealers, and all charges
towards advertisement,
delivery, packing,
forwarding and the like, as

Page 28 of 37
 OIO/Ultratech

the case may be, and the

price so printed is the sole
consideration for the sale:
Provided...
Provided...

Provided also that where

the retail sale price of the
goods are not required to
be declared under the
Standards of Weights and
Measures (Packaged
Commodities) Rules,
1977, and thus not
declared, the duty shall be
determined as is in the
case of goods cleared in
other than packaged
form;
3....

7.1 Thus, vide Sr. No. 1C of the Notification No. 04/2006-CE dated
01.03.2006 as amended by Notification No. 04/2007-CE dated
01.03.2007, a concessional rate of duty was available to cement cleared
in packaged form but where retail sale price of the goods is not required
to be declared under the PC Rules and thus not declared. The
concessional rate of duty under Sr. No. 1C of the Notification No.
04/2006-CE dated 01.03.2006 was amended from time to time.

7.2 From 17.03.2012 onwards, the earlier Notification No.04/2006-CE

dated 01.03.2006 was rescinded by Notification No.12/2012-CE dated
17.03.2012. Thereafter, the rates at which excise duty is to be paid on
cement was given under Sr.No.51 and 52 of Notification No.12/2012-CE
dated 17.03.2012. The terms and conditions given under Sr. No.51 and
52 are similar to the terms and conditions laid down earlier under
Sr.No.1A and 1C of Notification No.04/2006-CE respectively.

7.3 During the relevant period i.e. December 2012 to June 2017, the
tariff rate of duty on cement classified under Chapter Sub Heading
252329 of the first schedule to the Central Excise Tariff Act, 1985 was
Rs.900 per MT from December 2012 to February 2015 and Rs.1000 per
MT from March 2015 to June 2017. However, under Sr. No. 52 of
Notification No. 12/2012-CE dated 17.03.2012, as amended, concessional
rate of duty @ 12% ad valorem was available during December 2012 to
February 2015 and 12.5% ad valorem was available during March 2015
to June 2017, to the cement cleared in packaged form where retail sale
price of the goods is not required to be declared under the LM Rules and

Page 29 of 37
 OIO/Ultratech

thus not declared. Relevant portion of the notification dated 17.03.2012

is reproduced below:

(i) During December 2012 to February 2015:

SI. Chapter or Description of excisable Rate Condition

No. heading or goods No.
sub-heading
or tariff
item of the
First
Schedule
52 2523 29 All goods, whether or not
manufactured in a mini
cement plant, other than 12%
those cleared in packaged
form

Provided that where the

retail sale price of the
goods are not required to
be declared under the
Legal Metrology (Packaged
Commodities) Rules, 2011
and thus not declared, the
duty shall be determined
as is in the case of goods
cleared in other than
packaged form.

Explanation -
...

(ii) During March 2015 to June 2017:

SL Chapter or Description of excisable Rate Condition

No. heading or goods No.
sub-heading
or tariff
item of the
First
Schedule
52 2523 29 All goods, whether or not
manufactured in a mini
cement plant, other than 12.5%
those cleared in packaged
form

Provided that where the

retail sale price of the
goods are not required to
be declared under the
Legal Metrology (Packaged
Commodities) Rules, 2011
and thus not declared, the
duty shall be determined

Page 30 of 37
 OIO/Ultratech

as is in the case of goods

cleared in other than
packaged form.

Explanation -
...

Further, the Notification No. 12/2012-Central Excise dated 17.03.2012

has been amended by the Notification No.15/2015-Central Excise dated
01.03.2015 and the rate of Central Excise duty at Sr.. No. 51 has been
revised ©12.5% + Rs.125/- PMT for cement, manufactured and cleared in
packaged form. At SI. No. 52 of the said Notification, the rate of central
excise duty has been revised ©12.5% for cement, manufactured and
cleared in other than those packaged form. From a plain reading of the
Notifications, especially the third proviso to entry at Sr. No. 1C, it is clear
that if the declaration of retail price is not required to be made in terms of PC
Rules, then such goods are deemed as Cleared in 'other than packaged form'
and the rata of duty prescribed under SI. No. IC would apply. The position
is the same in respect of NotifiCation No. 12/2012 also, as amended by
Notification No. 12/2015.

8. Upon going through the available material on records, I find that

the issue is no longer res integra. It is observed that the impugned issue
has been discussed and examined by various Benches of Hon'ble CESTAT
and in different cases, Hon'ble CESTAT has consistently held that cement
cleared in packaged form (50 kg. bags) to charitable organizations,
builders/developers/ready mix concrete (RMC) manufacturers,
contractors and construction firms, infrastructural development projects,
educational institutions, societies and hospitals, government bodies,
captive consumption etc by manufacturers of cement will qualify as sale
to industrial/institutional customers and there is no need of declaration
of RSP on cement bags of 50 kg because there is no resale of goods in
retail in all such cases.

8.1 I also find that present issue has undergone extensive litigation
before Hon'ble CESTATs. It has been held in the following cases that
cement cleared in packaged form (50 kg bags) to charitable
organizations, builders/developers/ready mix concrete (RMC)
Manufacturers, contractors and construction firms, infrastructural
development projects, educational institutions, societies and hospitals,
government bodies, captive consumption etc by manufacturers of cement

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 OIO/Ultratech

will qualify as sale to industrial/institutional customers.

(i) Sanghi Industries Ltd. v. CCE, 2017-VIL-462-CESTAT-AHM-CE

(ii) Arnbuja Cement Ltd. v. CCE [2017-TIOL-189-CESTAT-DEL]
(iii)Prism Cement Ltd. v. CCE v. M/s. Prism Cement, 2016-VIL-776-
CESTAT-DEL-CE
(iv)Heidelberg Cement (India) Ltd. v. CCE, [2015 (315) E.L.T. 53
(Tri.:Mum)]
(v) Ultratech Cement Ltd. V. CCE,.[2015 (317) E.L.T. 505 (Tri.-Del)]
(vi)CCE v. Mysore Cements Ltd., [201,0 (259) E.L.T. 30 (Kar.)]
(vii) Mysore Cements Ltd. v. CCE, [2010 (249) E.L.T. 398 Bang.)]
(viii)Grasim Industries Ltd: (Unit-I) y. CCE, [2009 (238) E.L.T. 655 (Tn.
—Chennai)]
(ix)Shree Cement Ltd. v. CCE, 2016-VIL-1020-CESTAT- DEL-CE
(x) Chettinad Cement Corp. Ltd. v. CCE, [2015 (329) E.L.T. 845 (TH. -
Chennai)]
(xi)Grasim Industries Ltd. v. CCE, [2004 (175) E.L.T. 779 (Tn. -Del.)]

8.2 The Tribunal in the case of SANGHI INDUSTRIES LTD. Versus CCE&
S.T., RAJKOT- 2018 (361) E.L.T. 909 (Tn. Ahmd.) has held as under :-

Cement - Exemption - Sale in 50 kg. bags to industrial/institutional

customers - issue no longer res, integra having been decided in catena
of decisions e.g. 2018 (30) E.L. T, .121 (Tribunal); 2017 (357) E.L.T.
1003 (Tribunal), etc. - Builders, Developer's, Contractors, Construction
Firms, Manufacturers; Government bodies, Social/Educational, Religious
and Charitable orgahiiations, Infra structural development projects
covered under category of industrial/institutional consumer - Exemption
under Notification No. 4/2006-C. E: admissible; there being no
requirement to declare RSP on these goods Under Standards .of Weights
and Measures law:[par as 4, 4.1,.4.2,.4.3, 4.6]

8.3 The Tribunal in the case of ACC LTD. Versus COMMISSIONER OF C..
EX: COIMBATORE-2018 (359) E.L.T. 572 (Tn. - Chennai) has held as
under:-

Cement - Exemption - Sale of cement in packs of 50 kgs. to

manufacturers, users, asbestos and cement/pipe manufacturers,'
ready-mix concrete manufactures or otherwise to builders, as
infrastructure/buildings/government projects construction, educational
institutions, hospitals and societies would fall under the category of
Institutional Consumer or Industrial' Consumer - Rule 2A of Chapter II
of The Standards of Weights and .Measures (Packaged. Commodity)
Rules, 1977 not applicable - Benefit of exemption available- under
Serial No. IC of Notification No. 4/2006-C:E. [paras .5; 4.7]

Interpretation of Statute - Rule. 2A of The Standards of Weights and

Measures (Packaged Conimodity) Rules, 1977 - Two categories
excluded frompro visions of Rules- First category being packaged
commodity, in case of cement,' a quantity of more than 50 kg. and
second category being packaged commodity meant for industrial or
institutional consumers - Both, clauses separated by a 'semi-colon'
thereby clearly indicating that the word 'and' between the two clauses
to be read disjunctively and not conjunctively - Pro Visions of mks not
applicable in respect of both categories. [para 4.6]

Page 32 of 37
 OIO/Ultratech

Cement Exemption - Cement for "self-consumption" inside the

factory and unSold quantity at warehouses cannot be considered as
"retail sales" under Rule 3(q) of The Standards of Weights and
Measures (Packaged Commodity) Rules, 1977 - Benefit of exemption
available. under Notification No. 4/2006-C.E. [paras 4.8, 4.9]

The Revenue appeal against the said order, was also dismissed by
the Supreme Court on monetary limit on 06.02.2019.

8.4 The Tribunal in the case of ULTR.ATECH CEMENT LTD. Versus

'CCE, Wore - 2015 (317) E.L.T. 505 (Tn. - Del.) in para 5 & 6 of its order
has held as under :-

5. It is seen that CESTAT in the case of M/s. Heidelberg Cement

(India) Ltd /M/s. Ultra Tech Cement Ltd. v. CCE, Nagpur/Raigad
(supra) has clearly held that ,cement in 50 Kg bags sold to
builders/developers qualifies as sales to institutional consumers and
benefit of serial number 1C of Notification No. 4/2006-C.E., is
available .to such clearances. Regarding the demand Pertaining to
clearances to industries like M/s. Grasim industries, M/s. Vikram
Cement, M/s. Gwalior Chemical Industries Ltd., the adjudicating
authority has opined that ,the said industries have not used such
cement for manufacture of any excisable goods, having used
cement for constructing factory building, residences and roads and
repair work and hence such consumers cannot be called industrial
consumers but at the same time, ready-mix-concrete producers
who have actually used the cement for manufacturing excisable
goods namely ready-mix-concrete, have also been denied the
benefit available to industrial, consumers. Further even if it is co.
ntended that the industries like M/s. Grasim Industries, Gwalior
Chemicals, etc. did not use cement for producing excisable goods,
they admittedly used the same for construction and w
ould. therefore qualify to be reckoned in the category of builders.
Government also would qualij) as institutional buyer. it is also not
,the case of Revenue that RSP was required to be printed on such
sales as per the requirements of Metrology Act.

6. Further, the issue has been settled in favour of the appellants

by judicial pronoUncements. in the case .of M/s. Heidelberg Cement
(India). Ltd & .M/s. Ultra Tech Clement Ltd (suPra), Mysore Cements
Ltd „v. CCE,. Bangalore-II (supra), .Grasim Industries Ltd. (Unit-I) v.
CCE, Tricky, .200 (238) ELT. 655 (Tri.-Chennai) as is fairly conceded
by the Id. AR.

8.5 Finally the present issue went up to Apex Court and The Hon'ble
Supreme Court on 27-11-2019 has dismissed the following 42 Civil
appeals filed by the Revenue in case of Commissioner of Central
Excise vis Madras Cement Company and others. :-

(i) Civil Appeal No. 6983 of 2009

(ii) C.A. Nos. 6238-6239, 6877 and 6227 of 2009, 86 of 2010, 1901-1905
of 2011,
(iii) S.L.P. (C) Nos. 15416-15417 of 2011,
(iv) C.A. Nos. 6514-6515 and 6824 of 2015, 3125-3126 and 2603 of 2016,

Page 33 of 37
 OIO/Ultratech

(v) C.A. Diary No. 3674 of 2017,

(vi) C.A. Nos. 8974-8975,101,93, 15037-15038, 11205-11206 and
16924 of 2017, 48954896, 6176-6177, 7023, 8048,7448,
9550,10030, 10847 & 10108-10109 of 2018 and 7323.; 7324 of
2019.
(vii) C.A. No. 6983 of 2009 filed by CCE against the. CESTAT Final Order
No. 1397/2008, dated 10-12-2008 as reported in .2009 (245) E.L.T.
502 (Tribunal) Madras Cements Ltd. v. Commissioner).
(viii)CA. Nos. 6238-6239 of 2009 filed by CCE, Trichy against the
CESTAT Final Order No. 1430/2008, dated 17-12-2008 as rePorted
in 2015 (329) E.L.T. 845 (Tribunal) (Chettinad Cement Corporation
Ltd v. Commissioner).
(ix) C.A. No. 6227 of 2009 filed by Commissioner of Central Excise,
Trichy against the CESTAT Final Order No. 1169/2008, dated 20-10-
2008 as reported in 2009 (238) E.L.T. 655 (Tribunal) (Grasim
Industries Ltd. v. Commissioner).
(x) C.A. Nos. 1901-1905 of 2011 filed by Commissioner of Central Excise,
Hyderabad-II against the CESTAT Final Order Nos. 771-775/2010,
dated 8-4-2010 as reported in 2010 (256) E.L.T. 616 (Tribunal)
(Commissioner v. Sagar Cements Ltd.).
(xi) S.LP. (C) Nos. 15416-15417 of 2011 filed by Commissioner of Central
Excise; Bangalore-II against the C.E.A. No. 144 of 2009, decided on
26-8-2010 as reported in 2010 (259) E.L.T. 30 (Kar.) and the C.E.A.
No 143 of 2009, decided on 9-9-2010 as reported in 2015(320)
E.L.T. A122 (Kar.) (Commissioner y. Mysore Cements Ltd.).
(xii) C.A. No. 6824 of 2015 filed by Commissioner of Customs, Central
Excise and Service Tax, Guntur against the C.E.A. No. 82 of 2014,
decided on 20z9-2014 as reported in 2015 (319) E.L.T. A252 (A.P.)
(Commissioner V. Madras Cements Ltd.).
(xiii)C.A. No. 2603 of 2016 filed by CCE, Guntur against the CESTAT
Final Order No. 26570/2013, dated 10-9-2013 as. reported in 2017
(346) E.L.T. 463 (Tribunal) (Madras Cements Ltd. v.
Commissioner);
(xiv)C.A. Nos. 8974-8975 of 2017 filed by CCE, Bhopal against the CESTAT
Final Order Nbs. A/50521-50522/2017-EX(DB), dated 24-1-2017 as
reported in 2017 (352) E.L.T. 177 (Tribunal) (Diamond Cement v.
Commissioner,).
(xv) C.A. Nos. 15037-15038 of 2017 filed by. CCE, Bhopal against the
CESTAT Final Order Nos. A/5355L53856/2016-EX(DB),.dated 28-9-
2016 as reported in 2017 (357):E.L.T. 1003 (Tribunal). (Prism Cement
Ltd. v Commissioner). ,
(xw) C.A.Nos 11205-112.06 of 2017 filed by CCE, Bhopal against the
CESTAT Finals Order Nos. 50523-59524/2017, dated 24-172017 as
reported. in 2018(360) E.L.T.. 124 (Tribunal) (Birla Corporation Ltd. v.
Commissioner).
°MO C.A. No. 16924 of 2017 filed by CCE, 'Bhopal 'against CESTAT Final
Order No. 55298/2016, dated 3-1 1-20 16 as reported in 2018 (360)
E.L.T: 98 (Tribunal) (Commissioner v. Jaypee Revva Plant).
(xlnii) C.A. 'Nos. 4895-4896 of 2018 filed .by CCE& Service Tax, Tirupati
against the CESTAT Final Order Nos. 55507755508/2017, dated 10-7-
2017 as reported in 2018 (361) E.L.T. 917 (Tribunal) (Dalmia Cements
.(Bharat) Ltd. v. Commissioner).
(xix) C.A. Nos. 9550 & 10108-10109 of 2018 filed by CCE, Customs and
Service Tax, Tirupati 'against the. CESTAT Final Order Nos. A/30088-
30093/2018, dated 30-1-2018 as. reported in 2018 (362) E.L.T. 718
(Tribunal) (Zuari Cement Ltd. v. Commissioner).

8.6 While dismissing the appeals, the Hon'ble Supreme Court passed
the following order:

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"Delay condoned
Having gone through the records of the case, we are of the considered
opinion that the appeals/SLP, being devoid of any merit, are liable to
be dismissed and, are dismissed accordingly.

However, we make it clear that where the sale has not been found to
be in favour, of industrial or institutional consumers, the concession in
question shall not be available."

8.7 In addition to above, I also take note of CBEC instructions issued

under F.No. 124/02/2008CX-3, dated 12.06.2008 vide which the
clarification about the effective rate of duty on cement cleared w.e.f.
01.03.2007 in terms C.E. Notification No. 04/2006-CE, dated 01.03.2006
was issued. The relevant part of said instructions is reproduced as under;

2. The matter has been examined. As per the provisions of Standard of

Weight and Measures Act, 1976 and the rules made thereunder, in the
following circumstances sale of goods even in packaged from will not
attract the provisions of said act or the rules made there under:

(i) In case the size of the bag is more than 50kg.

(ii) Where the sale is no an Institutional/industrial consumer as
defined under SWMR(PC) rules;
(iii) The sale is not a retail sale as per the definition of 'retail sale'
under the aforesaid rules.

3. No RSP required to be printed on the goods in respect of above mentioned

categories of sale. Hence they will be covered under S. No. IB or IC of the
notification 4/2006-CE, by virtue of second proviso to Explanation II In
the notification 4/2006 dated 1.3.2006 as amended.

4. It is requested to determine the duty accordingly and resolve all pending

disputes in light the aforesaid clarification.

8.8 Although above clarification is in the context of S. No. IB or IC of

Notification No. 04/2006-CE, dated 01.03.2006 as amended, I find that it
is equally applicable to the Sr. No. 52 of Notification No. 12/2012-CE,
dated 17.03.2012 as amended by Notification No. I2/2015-CE, dated
01.03.2015 because both deal with same issue and are worded
identically.

9. Further, I find that there is no evidence on record to show that any

of the buyers of the Noticee is not an Institutional/Industrial consumer.
Moreover, different types of buyers like charitable organizations,
builders/developers/ready mix concrete (RMC) manufacturers,
contractors and construction firms, infrastructural development projects;
educational institutions, societies and hospitals, government bodies,
captive consumption etc are consistently held as Institutional/Industrial

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consumer by Hon'ble CESTAT in various decisions which has also been

affirmed by Hon'ble Supreme Court as discussed in aforesaid paras. As
such I find that the total sales of cement of 50 kg bags by the NotiCee
qualifies as sale to Institutional/Industrial consumer. Therefore, I find.
that there is no need to declare RSP on these cement bags of 50 kg in
terms of Standards of Weights and Measures (Packaged Commodities)
Rules, 1977 [Now Legal Metrology (Packaged Commodities) Rules, 2011]:

10. In addition to above, I also find that there is no evidence on record

to show that there is resale of goods in retail in any such clearances of 50
kg bags of cement by the Noticee or that such goods were meant for
resale in retail. So in the absence of evidence of any retail sales in case of
these 50 kg cement bags cleared by the Noticee, I find that there is no
need to declare RSP on these packages in terms of clarification issued by
the CBEC vide instruction issued under F.No. 124/02/2008CX-3, dated
12.06.2008.

11. Accordingly, I find that as per the proviso to entry at Sr. No. 52 of
Notification No. 12/2012-CE, dated 17.03.2012 as amended by
Notification No. 12/2015-CE, dated 01.03.2015, it is clear that if the
declaration of retail price is not required to be made in terms of PC Rules,
then such goods are deemed to be as cleared in 'other than packaged
form' and the Concessional rate of duty prescribed under Sr. No. 52 of
Notification No. 12/2012-CE, dated 17.03.2012 as amended by
Notification No. 12/2015-CE, dated 01.03.2015 would apply. The same is
also supported by various judgments as discussed supra.

12. In view of the dismissal of the Revenue appeals by the Apex Court,
the matter has attained the finality. Therefore, the cement cleared to
builders/contractors/ industrial consumers/ Government/ ready-
mix-concrete producers/ captive consumption would be eligible for the
benefit of serial number 1C of the table appended to Notification No. 4/2006-
C.E., dated 1-3-2006 as amended. Consequently, the notices issued to the
assessee in respect of clearances to bulk consumers/captive consumption do
not survive.

13. In view of discussion and my findings in aforesaid paras, I find that

the demand of differential Central Excise duty of Rs.136,45,18,225/-
(including cess) in Show Cause Notice No. Commr./15/2017-18, dated

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 OIO/Ultratech

04.01.2018 raised against the Noticee is not sustainable and liable to be

set aside.

14. Further, once I have reached to the conclusion that the demand of
Central Excise under Section 11A(1) of the Act is neither attracted nor
legally sustainable on merits alone in the instant case, other issues of
interest and penal provisions, including that of limitation etc are
rendered redundant. As a result the demand of Central Excise duty of
Rs.136,45,18,225/-, being unsustainable in law, is liable to be dropped.

15. Accordingly, I pass the following order:

ORDER

The proceedings initiated vide show cause notice SCN No.

Commr/15/2017-18 dated 04.01.2018 for demand of Central Excise
duty amounting to Rs.136,45,18,225/- (including cess) covering the period
from December, 2012 to June, 2017 are hereby dropped.

(PRAMOD A. VASAVE)
Cornmissioner,
Central GST & Central Excise,
Kuthch, Gandhidham

F. No. V/15-412/Adj./2017-18 Date: 23.04.2021

BY REGISTERED POST AD/SPEED POST/HAND DELIVERY

To,
M/s. UltraTech Cement Ltd.,
Survey No.: 24/25/27/30,
Sevagram, Vayor, Naliya,
Kutch.

Copy to,

1. The Principal Chief Commissioner, Central Excise & GST Ahmedabad

Zone, Ahmedabad.
. The Deputy Commissioner, Central GST Division, Bhuj.
,o,A2Z
3. The Superintendent, CGST Range-V, Central GST Division, Bhuj
\)!Guard File.

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