2001 (5) TMI 671 - AT - Central Excise

Issues Involved:
1. Classification of marble slabs and marble crazy under the Central Excise Tariff.
2. Determination of whether the process of converting marble blocks into slabs amounts to "manufacture."
3. Applicability of excise duty on marble slabs and marble crazy.
4. Interpretation of relevant legal precedents and amendments to the Central Excise Act, 1944.

Issue-wise Detailed Analysis:

1. Classification of Marble Slabs and Marble Crazy:
The appellants contested the classification of marble slabs under Sub-heading 2504.21 and marble crazy under Sub-heading 2504.90 of the Schedule to the Central Excise Tariff Act (CETA), 1985. They argued that these items were not excisable as they did not undergo a manufacturing process. The Assistant Collector and the Collector of Central Excise (Appeals) upheld the classification, leading to the appeal.

2. Determination of Manufacture:
The appellants argued that cutting marble blocks into slabs did not constitute "manufacture" based on earlier Tribunal decisions (Sangmermer India P. Ltd. v. CCE and CCE v. Jain Marbles). The Department countered that these decisions were based on the old tariff and that the new tariff and amendments to the definition of "excisable goods" made the goods subject to duty. The Assistant Collector held that the conversion of marble blocks into slabs amounted to manufacture since both items were known under different names in trade and were covered under different headings.

3. Applicability of Excise Duty:
The appellants paid duty under protest and cited several Tribunal decisions supporting their claim that cutting marble blocks into slabs did not amount to manufacture. The Department maintained that the goods were excisable under the specific entries of the new tariff schedule. The Tribunal referred to the Supreme Court's decision in Moti Laminates P. Ltd. v. CCE, which emphasized that mere inclusion in the tariff schedule does not make an item excisable unless it is manufactured and marketable.

4. Interpretation of Legal Precedents and Amendments:
The Tribunal analyzed various precedents, including decisions from the Rajasthan High Court and the Supreme Court, which consistently held that cutting marble blocks into slabs did not amount to manufacture. The Tribunal also noted that the relevant section or chapter notes in the new tariff did not specify that this process amounted to manufacture. Therefore, the Tribunal concluded that the goods in question were not excisable.

Separate Judgments Delivered:

Majority Judgment:
The majority opinion, delivered by Member (J) and supported by Member (T), held that the process of cutting marble blocks into slabs did not amount to manufacture. Consequently, the goods were not excisable. The impugned order was set aside, and the appeal was allowed with consequential relief to the appellants.

Vice-President's Judgment:
The Vice-President disagreed, arguing that the new tariff and amendments to Section 2(f) of the Central Excise Act changed the legal position. He emphasized that the tariff heading 2504.21 itself recognized the process of manufacture. He proposed remanding the case for de novo consideration to verify the factual aspects and determine whether the goods had reached a marketable stage.

Third Member's Judgment:
The Third Member supported the Vice-President's view, emphasizing that the tariff entries and chapter notes inherently recognized the manufacturing process. The case was remanded for de novo consideration with directions to re-examine the factual aspects and provide the appellants another opportunity to be heard.

Majority Order:
The impugned orders were set aside, and the case was remanded for de novo consideration in accordance with the law, with directions to re-examine the factual aspects and provide the appellants another opportunity to be heard.

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