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Subject : CE- Classification of Portland Slag Cement & Portland Pozzolana Cement during the period 1.3.92 to 28.2.94- Clarification regarding.
I am directed to say that doubts have been expressed regarding correct classification of Portland Slag Cement and Portland Pozzolana Cement as to whether under sub-heading 2502.29 or 2502.90 during the period 1.3.92 to 28.2.94. The doubts have arisen in view of the changes effected in Chapter 25 of the Central Excise Tariff Act, 1985 in the Budget of 1992-93.
2. The issue was discussed in the South Zone commissioners' Conference held in Coimbatore on 27th and 28th December, 1993 and it was decided to obtain the views of TRU, as to whether it was the intention of Government of extend the concessional rate of duty to slag based cement which is available to portland cement falling under sub-heading No. 2502.29 in terms of Notification No. 7/92-CE dated 1.3.1992 as amended by Notification No. 56/92-CE dated 31.3.1992 and Notification No. 5/93-CE dated 28.2.1993. The matter was further discussed in the West Zone Commissioners' Conference held in Aurangabad on 14th & 15th July, 1994, where a view was taken that the products in question may appropriately be classifiable under sub-heading No. 2502.90 attracting higher rate of duty than ordinary Portland Cement during the material period. It was never the less felt that the government had no intention to charge higher duty on Portland Slag cement and Portland Pozzolana Cement than ordinary Portland Cement. Therefore, with a view to invoking the provisions of Section 11-C of CESA, 1944 the Board vide letter of even number date 23.9.94 has floated a survey among the Central Excise field formations to ascertain the general practice of assessment in this regard and directed the CCEs not t enforce the demands raised on this account till further orders. The Survey showed that there were divergent views regarding the classification though a majority of the Commissioners were of the view that the correct classification was sub-heading 2502.29.
3. The Board while considering the proposal to invoke Section 11-C observed that the issue to classification of the goods in question has to be decided before the proposal could be considered. Therefore the classification issue was examined further in consultation with TRU, DG(AE), DG(I) and all the Chief Commissioners of Central Excise. The view that emerged was that the goods in question merit classification under sub-heading No. 2502.29 during the material period.
4. The matter has sine been carefully examined by the Board. The Board has taken note of the fact that prior to the Finance Bill 1992 Portland Slag Cement was classified under Heading 2502.20 which covered Grey Portland Cement which included Ordinary Portland cement, Portland Pozzolana Cement, Portland slag cement etc. with effect from 1.3.92, the Tariff structure relating to heading 25.20 was amended and a generic entry in the name of Portland Cement was introduced without expressly mentioning that this included Portland Cement, portland Pozzolana Cement and Portland Slag Cement etc. as was the case prior to 1.3.92. It appears that the generic name Portland Cement included all the categories of cement which were mentioned in heading 2502.20 before 1.3.92. It has two sub classifications i.e. white cement under sub-heading 2502.21 and all other types of Portland Cement under sub-heading 2502.20. All varieties of Portland Cement including Pozzolana and Slag Cement other than white cement should fall under 2502.29. The Tariff changes effected w.e.r. 1.3.94 have also covered these categories of Cement under 2501.29. On the other hand Heading 2502.90 covers other types of cements not mentioned in the Heading 2502.21 to 2502.50 i.e. cements other than Portland Cement, Aluminous Cement, High alumina refractory cement etc.
5. The effective rate of duty for cement under sub-heading No. 2502.29 in terms of Notification No. 7/92-CE dated 1.3.1992, as amended, is Rs. 303/-per tonne and under sub-heading 2502.90 the tariff rate is 40%. It would be highly inequitable to charge 40% to Portland slag cement and Portland Pozzolana Cement because the price of the two cements is more or less the same as Portland cement. The intention of the Government was also never to charge a higher rate of duty for Portland Slag Cement and Portland Pozzolana Cement. Therefore these would continue to be classified under the category of portland cement and attract the same rate of Excise duty applicable to Ordinary Portland Cement prior to and after the tariff amendment of 1992. The Tariff amendments were carried out to avoid disputes regarding classification of white cement so as to make the classification of white cement more explicit.
6. Thus it is apparent that treating portland slag cement and Porland Pozzolana Cement as a different class of cement from portland cement is not correct particularly when the tariff does not specifically mention it to be different from the portland cement. The classification of portland slag cement and Portland Pozzolana cement therefore should be correctly done as others, under sub-heading 2502.29 during the period March, 92 to February, 94.
7. In view of the above it is clarified that Portland cement (including ordinary portland cement, portland pozzolana cement and portland slag cement) would merit classification under Sub-heading 2502.29 during the period 1.3.92 to 28.2.94.
8. Trade and Field formations may be advised accordingly.
pending disputes/ assessments may be finalised in view of the above guidelines.