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PETITIONER: M/S. INDIAN RAYON & INDUSTRIES LTD., M/S. J.K. WHITE CEMENT

       Vs.

RESPONDENT: COLLECTOR OF CENTRAL EXCISE, JAIPUR

DATE OF JUDGMENT:       12/05/1998

BENCH: SUJATA V. MANOHAR, D.P. WADHWA

ACT:

HEADNOTE:

JUDGMENT:                             With                CIVIL APPEAL NO. 6030 OF 1994                       J U D G M E N T Mrs. Sujata V. Manohar, J.      M/s. J.K   White Cement Works and M/s. Indian Rayon and Industries Ltd.,  the two  appellants herein, are engaged in the manufacture of rapid hardening white cement. The dispute relates to  the classification  of white  cement produced by these appellants under the Central Exciso Tariff in force at the relevant  time. In  the case of J.K. White Cement Works, the  period   of  disputed  classification  if  16.21985  to 28.2.1986 and  1.3.1986 to  28.2.1992. In the case of Indian Rayon and  Industries Ltd.  the relevant period is 26.4.1991 to 28.2.1992.      For the  period prior to 28.2.1986, the relevant Tariff Entry for  cement was  Tariff Entry  23. After  coming  into force of  the new Excise Tariff from 28.2.1986, the relevant Entry is  2502. There  was a  change in  the Entry 2502 with which we  are concerned,  w.e.f. 1.3.192. The amended Tariff Entry  2502.21  thereafter  covered  rapid  hardening  white cement. The  relevant Entries  for the  three periods are as follows :                    (a) Prior to 28-2-1986 ------------------------------------------------------------ 23. CEMENT ALL VARIETIES      Rs. 250/-       10% of the (i) Grey Portland Cement      Per MT          basic duty ch- (including Ordinary Portland                  argeable Cement, Portland-Pozzolana Cement and Portland slag cement), masonry cement, rapid hardening cement, low heat cement and waterproof (hydro- phobic) cement. (ii)  All Others               40% ad        -do-                                valorem ------------------------------------------------------------                     (b)  From 28-2-1986 ------------------------------------------------------------ Heading  Sub-       Description of goods       Rate of Duty          Heading

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------------------------------------------------------------ 25.02              Cement Clinkers; Cement all                            sorts ------------------------------------------------------------         2502.10       Cement Clinkers              12% ------------------------------------------------------------         2502.20   Grey Portland Cement (including                   ordinary portland cement, prot-  Rs. 225                   land pozzolana cement and port-  Per Tonne                   land slag cement), masonry cement,                   rapid hardening cement, low-heat                   cement and water-proof hydrophobic                   cement. ------------------------------------------------------------                     ............... ------------------------------------------------------------                   .................... ------------------------------------------------------------        2502.90    Other                                40% ------------------------------------------------------------                      (c)  From 1-3-1992 ------------------------------------------------------------ Heading      Sub-      Description of goods        Rate of            Heading                                 Duty ------------------------------------------------------------ 25.02                 Cement clinkers; cement                       all sorts ------------------------------------------------------------           2502.10     Cement clinkers Portland     10%                       Cement ------------------------------------------------------------           2502.21     White Cement, whether or     40% + Rs.                       not artificially coloured    250 per                       and whether or not with      tonne                       rapid hardening properties ------------------------------------------------------------          2502.29      Other                        40% + Rs.                                                    250 per                                                    tonne ------------------------------------------------------------                      .................... ------------------------------------------------------------      In respect  of  the  period  prior  to  28.2.1986,  the Tribunal has  held that  Entry 23(i)  is applicable  only to grey portland  cement. "Rapid  hardening  cement"  in  Entry 23(i) refers,  according  to  the  Tribunal,  only  to  grey portland cement  which has  a rapid hardening quality. Since the Item  manufactured by the appellants is white cement and not grey cement with rapid hardening quality, it falls under the Residuary Entry 23(ii). According to the assessees, each item in  Tariff Entry 23(i) has to be read separately. Rapid hardening cement  whether it  is grey  or  white  will    be covered by  Entry 23(i).  Hence it will not fall under Entry 23(ii). In  the same manner from 28.2.1986, to 1.3.1992, the Tribunal has  held that  the correct  classification of  the Item produced  by the  appellants is  under 2502.90 which is the Residuary Entry. While according to t he appellants, the correct classification  would be  under Entry 2502.20. These Entries are  similar to  old Entries  23(i) and 23(ii). From 1.3.1992, Entry 2502.21 covers the case because it expressly deals with  white cement whether or not with rapid hardening quality.      The Tribunal  has held  that white cement will not fall under Entry  23(i) of  2502.20. The  appellants had produced considerable literature before the Tribunal in order to show

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that  the  cement  produced  by  them  has  rapid  hardening quality. In  this connection,  the appellants  relied on the publicity catalogue  of white  cement called ‘The Technology of White  Concrete’ published  by Aalborg Portland, Denmark. The catalogue  mentions, "Danish white cement is produced in special plants  which  are  completely  separated  from  the production of  grey cement  and Danish  White Cement fulfils the  requirements   of  most  countries  to  rapid-hardening cement, thus  for instance,  the British standard 12 : 1958. The most essential differences from ordinary rapid-hardening cement are whiteness and a particularly low alkali-content." The appellants  also relied  upon a  test  certificate  from Shriram Institute  for Industrial  Research which  tested  a sample of  rapid  hardening  J.K.  White  Cement.  The  test results  are  set  out  in  the  test  certificate  and  the Institute has  certified that  the sample  conformed to IS : 8041.78 is  to the  Indian standard  specification for rapid hardening cement.  The appellants  possess a licence for the manufacture of  IS :  8041.78 rapid  hardening  cement.  The Appellants have  also relied  upon the  test report  of  the Department of Civil Engineering, University of Roorkee which states that  J.K. White  Cement has also got rapid hardening property as it has satisfied the requirements of IS:8041.78. It is  also mentioned  there that J.K. White Protland Cement can be  used as rapid hardening portland cement since it has got  all  the  properties  of  rapid  hardening  cement.  In general, white  cement can be ordinary or of rapid hardening nature like  grey rapid  hardening and  grey ordinary cement because the rapid hardening property of white or grey cement is due  to its physical and chemical properties irrespective of colour.   The  colour of the cement is not t he criterion for achieving  rapid  hardening  property.  Rapid  hardening white cement  can be  used in  the  preparation  of  masonry structural finishes.      Another report was also obtained by the Department from the National  Council  for  Cement  and  Building  Material, Ballabhgarh testing  the physical  properties of  the  white cement manufactured  by the  appellants. The test report has stated that  the compressive stress of cement on one day was 230 kg/CM2  as against  "not less  that 160 kg/CM2 per rapid hardening cement".  These test results also confirm that the cement produced  by  the  appellants  conforms  to  the  ISI specifications for rapid hardening portland cement IS : 8041 : 1978.  In fact, the adjudicating officer has held that the white cement  manufactured by the appellant thus conforms to the properties  of rapid  hardening cement. However, because it is  white in colour, the Department has held that it will fall under Tariff Entry 23(i) or 2502.20.      Learned  counsel  for  the  respondent  has  drawn  our attention to  a decision  of this  Court (to which one of us was a  part) in  the case  of Kajaria Exports Ltd. & Ors. V. Union of  India &  Ors. (1995  Supp. (3)  SCC 61) where this Court held  that white  cement and  ordinary  grey  portland cement are  two different  commercial  commodities  both  in commercial parlance  and in  technical composition.  In  the present case, however, the appellants do not seek to include ordinary white  cement without rapid hardening properties in Tariff Item  23(i) or  2502.20. In these two Tariff Entries, apart from  grey portland  cement, there  are other kinds of cement which  are mentioned  without any  reference to their colour but  with reference  to their  properties. Thus,  the Entry includes  rapid hardening  cement, low heat cement and water proof hydrophobic cement. The appellants have produced enough technical  material  to  show  that  rapid  hardening cement can  be grey  portland or white. Since these Items in

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the Tariff  Entry 23(i)  and 2502.20, have no nexus with the colour of  the  cement,  unlike  the  first  Item  which  is expressly grey  portland cement, we do not see why the other kinds of  cement referred to in the Entry should be confined only to  cement of grey colour. The rapid hardening property has no  correlation with the colour of the cement. Hence, in our view,  the Tribunal  was not  right in  excluding  rapid hardening cement  having white  colour  from  classification under the  Head "Rapid  Hardening Cement"  in Entry  23.1 or 2502.20. It  is also  necessary to note, in this connection, that   ISI    specification   also    has   two    different specifications, 8041.78  for rapid hardening cement and 8042 : 1978  for rapid hardening cement and 8042 : 1978 for white cement. The product of the appellants is licensed under both these specifications.  The Tribunal  has placed  emphasis on the cement  manufactured by  the appellants  being  sold  as white cement.  This emphasis  does not appear justified. All white cements do not possess rapid hardening properties. The cement manufactured  by the  appellants is a special kind of white cement  having rapid  hardening properties. It is used for giving  a finish  to structures and for other decorative purposes. Since  it possesses  rapid hardening qualities and is cement,  it must be classified as rapid hardening cement. It cannot,  therefore, fall  under the Residuary Item 23(ii) or 2502.90.      In the  premises, the appeals are allowed, the impugned judgment and  order of  the Tribunal  is set  aside and  the appellants’ contention  that prior  to  28.2.1986  the  Item manufactured by  them was  classifiable  under  Tariff  Item 23(i) while  after  28.2.1986  and  upto  1.3.1992,  it  was classifiable  under  Tariff  Item  2502.20  is  upheld.  The appellants will  be entitled to all consequential reliefs in accordance with  law. There will, however, be no order as to costs.