2018 (3) TMI 166 - AT - Central Excise

Classification of goods - Chequered Tiles, Rockard designer Tiles, Plain cement Tiles and Paver blocks etc. - benefit of N/N. 10/2003-CE dt 1.3.2003 - It was alleged that the Respondent has cleared the Chequered Tiles, Rockard designer tiles and decorative Interlocking paver blocks which are not commercially known as Mosaic Tiles by misclassifying the same as Mosaic Tiles - Held that - The revenue has not brought any fact on record that the tiles were not Mosaic or commercially not known as Mosaic - the dictionary meaning of Mosaic means a picture of decorative design made by the small coloured pieces of stones or tiles into a surface or the process of art of making such pictures or design. No adverse allegation is appearing in SCN against the Respondent that the Tiles manufactured by them do not fulfill the above criteria of Mosaic - what is important is that the goods under reference must belong to the category of Mosaic Tiles so as to eligible for exemption from duty. The term Mosaic is a germ and once the goods belong to the category of Mosiac, the category of goods would not debar it from the category of Mosaic. In the present case the Tiles as per the terminology used are Chequered , Rockard etc to represent them individual species of the germ Mosaic Tiles . If only genus is covered by the exemption and not the individual species in that case no exemption would be available where the genus is named in exemption and not the individual species. The Hon ble Court in the case of KEDIA AGGLOMERATED MARBLES LTD. Versus COLLECTOR OF CENTRAL EXCISE 2003 (1) TMI 104 - SUPREME COURT OF INDIA held that the Tiles in question would merit classification as Mosaic Tiles despite the fact that the commercial name of the Tiles was not Mosaic Tiles and were sold by unique name to each product - In the present case following the same analogy of the Hon ble Apex Court as above, it can be held that an individual tile, which has an inherent well defined visible pattern or design contributed by the marble or stone chips mixed in the cement, is without any doubt, a mosaic tile, notwithstanding the fact that the goods are marketed by the manufacturer by using the Trade Name coined by the manufacturer. The goods of the Respondent would also merit classification as Mosaic tiles and would be eligible for exemption - the individual name of Tiles as Chequered, Roackard or plain tiles would not exclude them from claiming exemption as the goods in question are commercially known as Mosaic Tiles . Appeal dismissed - decided against Revenue.

Issues Involved:
1. Misclassification of goods.
2. Eligibility for exemption under Notification No.10/2003-CE.
3. Commercial identification of the products.
4. Validity of affidavits and evidence provided.
5. Interpretation of the term "Mosaic Tiles" in the exemption notification.

Detailed Analysis:

1. Misclassification of Goods:
The core issue revolves around whether the Respondent misclassified their products, such as Chequered Tiles, Rockard designer Tiles, Plain cement Tiles, and Paver blocks, as "Mosaic Tiles" to avail exemption under Notification No.10/2003-CE. The adjudicating authority initially set aside the demand and penalties, concluding that the goods were correctly classified as "Mosaic Tiles."

2. Eligibility for Exemption Under Notification No.10/2003-CE:
The Notification No.10/2003-CE exempts goods classified under sub-heading 6807.90 if they are commercially known as "Mosaic Tiles." The revenue argued that the products were not commercially recognized as "Mosaic Tiles" but by their specific names like Chequered Tiles, Rockard designer Tiles, etc., thus not qualifying for the exemption. However, the Respondent contended that these products are indeed "Mosaic Tiles" despite the commercial names used in invoices and catalogues.

3. Commercial Identification of the Products:
The Revenue's stance was based on the argument that the goods were commercially recognized by their individual names rather than as "Mosaic Tiles." This was supported by statements from industry representatives. Conversely, the Respondent produced affidavits from well-known builders and contractors affirming that the products are commercially known as "Mosaic Tiles." The adjudicating authority accepted these affidavits, noting that the Revenue failed to provide contrary evidence.

4. Validity of Affidavits and Evidence Provided:
The adjudicating authority considered affidavits from industry professionals, which supported the Respondent's claim that their products were commercially known as "Mosaic Tiles." The Revenue's reliance on product catalogues and statements from certain individuals was deemed insufficient to disprove the Respondent's classification. The Tribunal upheld the validity of the affidavits provided by the Respondent, emphasizing the lack of contrary evidence from the Revenue.

5. Interpretation of the Term "Mosaic Tiles" in the Exemption Notification:
The Tribunal analyzed the term "Mosaic Tiles" as used in the exemption notification. It concluded that the term encompasses tiles with a visible pattern or design made from small pieces of stone or tiles, regardless of the commercial names used. The Tribunal referenced the Supreme Court's judgment in Kedia Agglomerated Marbles Ltd. vs. CCE, which supported the interpretation that tiles marketed under different names could still qualify as "Mosaic Tiles" if they fit the technical and commercial definition.

Conclusion:
The Tribunal upheld the adjudicating authority's decision, confirming that the Respondent's products were correctly classified as "Mosaic Tiles" and thus eligible for exemption under Notification No.10/2003-CE. The appeal by the Revenue was rejected, and the impugned order was sustained. The Tribunal emphasized the importance of commercial understanding and the inherent characteristics of the tiles in determining their classification and eligibility for exemption.

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