CESTAT: Concrete Mix Used for Thanneermukkom Barrage Not Liable as Ready-Mix Concrete, Excise Demand of Rs.17.53 Lakh Quashed

April 24, 2026 : The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside a central excise duty demand of Rs.17.53 lakh raised against Marymatha Infrastructure Pvt. Ltd., holding that the material manufactured for the Thanneermukkom Barrage project in Kerala was “concrete mix” and not “Ready-Mix Concrete (RMC)” liable to excise duty.

A Bench comprising Dr. D.M. Misra (Judicial Member) and Mrs. R. Bhagya Devi (Technical Member) observed that the Revenue failed to establish the essential ingredients necessary to classify the product as Ready-Mix Concrete, particularly the use of retarders and plasticizers that increase shelf life and distinguish RMC from ordinary concrete mix.

The Tribunal noted:

“We find that retarders and plasticizers were not added in the present case, as no evidence has been brought in this regard by the Revenue nor argued that retarders and plasticizers were used as admixture and added to the concrete mix.”

The dispute arose from construction activities relating to the third stage work of the Thanneermukkom Barrage in Alappuzha district, undertaken pursuant to an agreement dated June 27, 2014 with the Superintending Engineer, Kuttanad Development Circle, Kottayam. Since the actual construction site was located in the middle of the Vembanad Kayal and there was no possibility of storing materials or installing mixing machinery there, the Irrigation Department allotted land at Ambika Market in Kuduvechoor Kara for installation of a dedicated concrete mixing plant exclusively for the project.

The appellant manufactured concrete at the allotted site and transported it by transit mixers over a distance of less than two kilometres to the barrage construction site. The company contended that the entire quantity produced was exclusively used for the government project and no quantity was sold outside.

The department issued a show cause notice dated July 16, 2018 alleging that the appellant had manufactured Ready-Mix Concrete classifiable under Tariff Heading 3824 5010 and cleared the same without payment of excise duty. A duty demand of Rs.17,53,833 along with interest and penalty was proposed by invoking the extended period of limitation on the ground of suppression of facts.

Before the Tribunal, the appellant argued that the product was merely “concrete mix” exempted under Sl. No.144 of Notification No.12/2012-CE dated March 17, 2012, which grants nil duty to concrete mix manufactured at the construction site for use in construction work. It was further submitted that the manufacturing process involved only mixing aggregates, cement, water and admixtures and did not involve sophisticated machinery associated with Ready-Mix Concrete production. The appellant also highlighted that no retarders or plasticizers were used and that the product conformed to IS 456:2000 standards, whereas RMC is governed by IS 4926:2003 standards.

The Tribunal extensively relied on the Supreme Court’s decision in Larsen and Toubro Ltd. v. CCE, Hyderabad, where the distinction between concrete mix and Ready-Mix Concrete was explained on the basis of manufacturing process, machinery deployed, and use of retarders and plasticizers. The Bench observed that Ready-Mix Concrete is typically manufactured through sophisticated automated processes and delivered in a plastic condition using transit mixers to maintain continuous rotation during transportation.

Referring to the facts of the present case, the Tribunal held that the Revenue failed to establish the critical characteristics necessary for classification as Ready-Mix Concrete.

“The difference between concrete mix and Ready-Mix Concrete mainly rest on the machinery used, the process of manufacture and use of retarders and plasticizers which enhances the setting time of Ready-Mix Concrete,” the Bench observed.

The Tribunal also relied on CBEC Circular No.368/19/98-CX dated January 6, 1998 and its earlier decision in Ambit Concrete (P) Ltd. v. CCT to conclude that, in the absence of sophisticated machinery and processes associated with RMC production, the resultant product could only be classified as “concrete mix”.

On limitation, the Tribunal observed that the appellant had already disclosed all details regarding the manufacturing process and clearances to the department in January 2015 itself in response to departmental queries. Despite having all relevant information, the show cause notice was issued only in July 2018 by invoking suppression of facts.

The Bench held:

“When all the information are available with the department in the year 2015 itself, demanding differential duty after receiving the information for the subsequent period invoking suppression of facts, in our opinion, is unsustainable in law.”

Accordingly, the Tribunal held that the appellant succeeded both on merits and limitation, set aside the impugned order and allowed the appeal with consequential relief.

Case Title: M/s Marymatha Infrastructure Private Limited v. Commissioner of Central Tax, Central Excise and Customs (Appeals)
Case No.: Central Excise Appeal No. 20641 of 2021
Coram: Dr. D.M. Misra (Judicial Member) and Mrs. R. Bhagya Devi (Technical Member)