Per K.K. Bhatia :

The appellants M/s. Nathpa Jhakri Power Corporation (NJPC) are a joint venture between the Government of India and Govt. of Himachal Pradesh, set up for the purpose of construction of a power project between the towns of Nathpa - Jhakri in Himachal Pradesh known as Nathpa Jhakri Power Corporation funded by the World Bank. The civil work relating to the project was allotted to three construction companies viz., M/s. Continental Foundation Joint Venture (CFJV), M/s. Nathpa Jhakri Joint Venture (NJJV) and M/s. Jai Prakash Hyundai Consortium, (JPHC). The agreement was entered into by M/s. NJPC and the construction companies to provide inter alia 'mix concrete' for execution of various items of work under the contract.

2. The Commissioner of Central Excise, Chandigarh issued a show cause notice dated 20.1.99 to all the above parties alleging that the construction companies employed by M/s. NJPC were manufacturing 'Ready Mix Concrete (RMC)' on which no central excise duty is being discharged. It is averred that the said RMC falls under Chapter Heading No. 3824.20 of the Schedule to the Central Excise Tariff Act and is subject to central excise duty. It is stated that all the three parties are adopting the same method of manufacture of RMC for which the rock is blasted from the designated quarry of M/s. NJPC. It is transported to the crusher and crushed to the specified sizes and specific quantity at the project site. Some aggregate, cement and sand are also produced from the crushing plant set up at the site. Some natural sand is also used. The aggregate and sand are transported and stored in bins adjacent to the automatic batching plant. The cement purchased from the market is stored in the cement silos at the site. The batching plant is an automatic plant which regulates and delivers the specified sizes and quantities of aggregate, sand and cement into the mixing drums through the built-in conveyor. The admixture for water reduction or air entraining are incorporated in the concrete as per the approved mix design given by the NJPC. The whole process is fully automatic and is electronically controlled. It is averred that the concrete of approved mix design and the specified quantity is manufactured in the batching plant strictly in accordance with IS: 456-1978 as stipulated in the contract with M/s. NJPC. The concrete so produced is transported by transit mixers upto the location of placement and is placed at the specified location by concrete pumps or placers before the setting time of concrete, which varies depending upon the type of cement used. It is alleged that noticee companies are manufacturing RMC but with some motive, they are naming it as mixed concrete to evade the central excise duty. It is stated that there is a difference between the process and method of manufacture of RMC provided in the BIS literature under IS: 4926/1976 and the Board's letter No. 368/1/98-CX dated 6.1.98 [reported in 1998 (24) RLT M53]. In this Circular of the Board, the process of manufacture of RMC is spelt out and it is clarified that RMC is a dutiable product. It is further averred that the matter was referred to the Bureau of Indian Standards who vide their letter dated 23.10.98 reported that the query raised by the department vide their letter dated 9.7.98 was considered by the Concrete Subcommittee and its views are as follows: "It is agreed that insofar as the process of manufacturing the concrete is involved, the process described in the letter of Central Excise is similar to the process given in IS: 4926 specification for 'Ready Mix Concrete".

3. It is stated that the noticee parties were asked to provide quantities and the value of the said RMC manufactured and delivered by them; that whereas the companies have given the particulars of the RMC supplied by them to the project but they have not shown the value of the concrete. Therefore, it is averred that the department has no option but to take the value of the comp