1993 (11) TMI 67 - HC - Central Excise

Summary

Issues Involved:
1. Validity of show cause notice and demand notice.
2. Classification of agglomerated marble slabs/tiles under the Central Excise Tariff Act, 1985.
3. Whether the preparation of agglomerated marble slabs/tiles constitutes a manufacturing process.
4. Applicability of excise duty on agglomerated marble slabs/tiles.
5. Maintainability of the writ petition in light of alternative remedies and disputed facts.

Summary:

1. Validity of Show Cause Notice and Demand Notice:
The petitioner sought to quash the show cause notice dated October 14, 1991 (Annexure 5) and the demand notice dated October 25, 1991 (Annexure 7). The court held that the notices were issued based on a wrong assumption that the preparation of agglomerated marble slabs/tiles involves a manufacturing process, thereby wrongly acquiring jurisdiction.

2. Classification of Agglomerated Marble Slabs/Tiles:
The petitioner argued that their product should be classified under Item No. 2504.21 and 2504.31 of Chapter 25 of the Schedule appended to the Central Excise Tariff Act, 1985, and not under Item No. 68.04. The court agreed, stating that the product contains more than 90% natural marble and should be classified under Chapter 25, not Chapter 68.

3. Manufacturing Process:
The court examined whether the preparation of agglomerated marble slabs/tiles constitutes a manufacturing process u/s 2(f) of the Central Excises and Salt Act, 1944. It was determined that the process does not result in a new commercial commodity with distinct name, characteristics, and use. The court cited various precedents, including Collector of Central Excise, Madras v. Kutty Flush Doors and Furniture Co. (P) Ltd., and Deputy Commissioner of Sales Tax v. Pio Food Packer, to support this conclusion.

4. Applicability of Excise Duty:
The court held that the preparation of agglomerated marble slabs/tiles does not involve a manufacturing process and, therefore, no excise duty is leviable on them. The court referenced multiple cases, including M/s. Amrutsheele & Anr. v. Union of India and Ors., and Collector of Central Excise, Jaipur v. Fine Marble and Minerals Pvt. Ltd., to substantiate this point.

5. Maintainability of the Writ Petition:
The respondents argued that the writ petition was not maintainable due to the availability of alternative remedies and the involvement of disputed facts. The court rejected this argument, stating that the petitioner had challenged the vires of the entries of 2504.21 and 2504.31 of Chapter 25 of the Schedule of the Act of 1985, which the respondent authorities were not competent to decide. The court cited Beharilal Shyamsundar v. Sales Tax Officer, CUI Circle, Cuttak and Anr., and M/s. Raza Textiles v. Income Tax Officer, Kanpur, to support its jurisdiction.

Conclusion:
The writ petition was allowed, and it was held that the petitioner's product, Agglomerated Marble Slabs/Tiles (VILLA NOVA), is not exigible to tax under the Act of 1944. The show cause notice (Annexure 5) and the demand notice (Annexure 7) were quashed. No order as to costs.