Circular No.237/71/96-CX dated 12/8/96

Government of India
Ministry of Finance Department of Revenue,
New Delhi

Subject: C. E.- Classification of the product Ready Mix Concrete

I am directed to say that doubts have been expressed regarding ex-cisability and classification of the product "Ready Mix Concrete" a mixture of duty paid cement, sand, course aggregates and a few chemicals in fixed proportions and involving strict qualify control and sample tests as to whether the same is excisable and merits classification under tariff entry 68.07 as opposed to 38.23 of the Schedule to Central Excise Tariff Act, 1985. The trade is claiming classification of the product under heading No. 68.07 with benefit of exemption from central excise duty in terms of Notification No. 36/94-CE dated 1.3.1994 (Now Notification No. 8/96-CE dated 23.7.1996) which exempts the goods manufactured at the site of construction for use in construction work at such site.

2. The Ready Mix Concrete plant consists of stone crushers, conveyors, vibrator screen to segregate different sizes of stone aggregates, and sand mill to produce sand from stones. A central batching plant is also installed in wh^i all aggregates are weighed, batched by electrical controls and limit switches. Cement from site is carried to the batching plant by a screw conveyer operated with automatic weighing gauges. Water is fed through flow meters after subjecting such water to chemical analysis. The mixture of stone aggregates, sand, cement and water is mixed in a mixer. The mixture so obtained is loaded on a transit mixer mounted on truck chasis, which is transported to the site of the customers and the same is discharged at site for use in further construction of building etc. The qualities accruing to the Ready Mix Concrete so obtained far out weigh to those of the site mixed concrete. The final product Ready Mix Concrete is a material in plastic, wet process state and not a finished product like blocks or prc.cast tiles or beams.

3. In the instant case, the activity engaged for making the product "Ready Mix Concrete" very much falls within- the ambit of the meaning of the word "manufacture", as envisaged under Section 2(f) of CESA, 1944 and in view of the pronouncements of the Hon"ble Supreme Court, as a new product with a new name emerges. As regards, the marketability vis-a-vis the shelf life of the impugned goods, it is quite apparent that inspite of the fact that the goods have a short shelf life, the same are marketable. Thus to put it simply, the prod lid "Ready Mix Concrete" is marketable though within the time frame of its short shelf life. As such, the product satisfies the twin test of "goods" and "marketability" which are needed if they are to be held as chargeable to Central Excise duty under CETA 1985.

4. Regarding classification it is stated that the impugned goods which are non-refractory and used in the construction/building activity is more akin to"Non-refractory mortars and concrete". As per H.S.N. Explanatory note on page 540-541, "Non-refractory Mortars and Concrete" fall under Heading No. 38.23, Sub-heading 3823.50. Further, the CETA, 1985 (Chapter 38 of the same) is fully aligned to the HSN. Therefore, applying the Rules of interpretation, viz., Rule 2(b) it is seen that the classification of the goods under reference is appropriate under Heading No. 38.23 (Sub-heading 3823.00) of CETA, 1985.5. In view of the above and the case law on the subject, the Board has taken a view that Ready Mix Concrete is an excisable product and would merit classification under Heading No. 38.23 of the CETA, 1985. Accordingly, it is clarified that Ready Mix concrete, the condition in which it is put up for sale is excisable and is appropriately classifiable under Heading 38.23 of Central Excise Tariff Act, 1985 and chargeable to appropriate rates of duty.

6. All pending disputes/assessments on the issue may be settled in the light of these guidelines.

Sd/-
(Mrs. Mallika Arya)
Under Secretary to The Government of India

(Note:- See

1. Cir. No.601/38/2001-CX, dt. 20/11/2001)

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