1987 (7) TMI 123 - HC - Central Excise

Summary

Issues:
Whether sawing rough marble blocks into rough marble slabs on job basis constitutes a manufacturing process under Section 2(f) of the Central Excises & Salt Act, 1944.

Analysis:
The petitioner-firm, engaged in sawing rough marble blocks into rough marble slabs, contended that this process does not amount to manufacturing under the Act. The firm applied for exemption under notification No. 105/80, stating the machinery cost was within Rs. 20 lakhs. However, authorities found the machinery value exceeded the limit, leading to a dispute. The petitioner argued that the process of sawing marble blocks into slabs does not qualify as manufacturing under Section 2(f) of the Act.

The respondents disagreed with the petitioner's interpretation, asserting that the process of converting marble blocks into slabs using a diamond gang saw machine costing over Rs. 20 lakhs is excisable. They threatened seizure of goods and factory closure, prompting the petitioner to file a writ petition. The Court admitted the petition, issuing a stay on further proceedings.

A crucial precedent was cited where the Customs, Excise and Gold (Control) Appellate Tribunal held that sawing marble blocks into slabs, even with expensive machinery, does not amount to a manufacturing process. This decision was upheld by the Supreme Court. Subsequently, another case supported this view, emphasizing that no significant transformation occurs during the process.

Relying on these precedents, the Court ruled in favor of the petitioner, declaring that cutting marble blocks into slabs does not involve a manufacturing process under the Act. The impugned notices threatening seizure and closure were quashed, and no costs were awarded. This judgment aligns with previous decisions and establishes that excise duty is not applicable to the petitioner's operations.