1984 (5) TMI 256 - AT - Central Excise

Summary

Issues Involved:
1. Whether the process of sawing marble blocks into slabs constitutes "manufacture" u/s 2(f) of the Central Excises and Salt Act, 1944.
2. Applicability of Tariff Item 68 to the marble slabs.
3. Burden of proof in cases of show cause notice issued by the Government to review the order passed by the Collector (Appeals).

Summary:

Issue 1: Whether the process of sawing marble blocks into slabs constitutes "manufacture" u/s 2(f) of the Central Excises and Salt Act, 1944.

The Respondents argued that mere slicing of marble slabs from marble blocks does not amount to "manufacture" as defined u/s 2(f) of the Central Excises and Salt Act, 1944. They contended that the identity of the cut slabs did not change and continued to be known in trade circles as "marble." The Appellate Collector supported this view, holding that mere sawing of rough marble blocks into slabs does not amount to "manufacture." The Tribunal agreed, stating that the marble slabs merely sawn from the marble blocks cannot be called a distinct commodity. The original identity of the marble continues despite the several processes undergone.

Issue 2: Applicability of Tariff Item 68 to the marble slabs.

Section 3 of the Central Excises and Salt Act, 1944, is the 'charging Section,' and duty is leviable on all excisable goods produced or manufactured in India as set forth in the First Schedule. The goods in question, viz. cut marble slabs, are not specifically enumerated in the First Schedule. Tariff Item 68 refers to "all other goods not elsewhere specified." The Tribunal held that Tariff Item No. 68 would not be applicable unless the goods are 'produced or manufactured' in India. Since the process of cutting marble blocks into slabs does not result in a new and distinct commodity, Tariff Item 68 does not apply.

Issue 3: Burden of proof in cases of show cause notice issued by the Government to review the order passed by the Collector (Appeals).

The Tribunal emphasized that the burden of proof in such cases is on the revenue. The Department did not specify any materials in the show cause notice to conclude that cut marble slabs could be considered a different and distinct commercial commodity. The Tribunal referred to several rulings, including 20 STC 520, 1979 E.L.T. 543, and 1980 E.L.T. 249, to support this view. The Tribunal concluded that there was no major transformation as a result of the treatment, and the appeal was dismissed.

Conclusion:

The Tribunal dismissed the appeal, holding that the process of sawing marble blocks into slabs does not constitute "manufacture" u/s 2(f) of the Central Excises and Salt Act, 1944, and Tariff Item 68 does not apply to the marble slabs. The burden of proof was on the revenue, and the Department failed to provide sufficient evidence to support its case.