1990 (12) TMI 205 - AT - Central Excise

Summary

Issues involved:
1. Classification of goods under Central Excise Tariff Act.
2. Eligibility for exemption under Notification 23/55.

Issue 1: Classification of goods under Central Excise Tariff Act:
The appeal challenged the order classifying limestone chips and powder under Heading 25.05 CETA '85 by the Collector of Central Excise. The process of crushing, grinding, and sieving limestone to obtain chips and powder was deemed a manufacturing process under the amended Sec. 2(f) of Central Excises & Salt Act, 1944. The Tribunal upheld this classification, citing relevant legal precedents where similar processes were considered manufacturing activities. The new definition of "manufacture" under the Act includes processes specified in the Central Excise Tariff Act, which encompass activities like crushing and grinding. Therefore, the conversion of limestone into chips and powder was deemed a manufacturing process. The Tribunal also noted that the denial of exemption under Notification 23/55 based on the goods not being used as fillers was incorrect. Previous decisions by the Tribunal established that proof of specific end-use was not required for exemption under the notification, and the goods were found eligible for the exemption.

Issue 2: Eligibility for exemption under Notification 23/55:
The appellants argued that the process of obtaining limestone chips and powder did not amount to manufacture, citing legal cases where similar processes did not result in a new product. However, the Tribunal held that the emergence of new products with distinct characteristics and uses after crushing, grinding, and sieving limestone constituted manufacturing activities. The products were considered marketable goods with different names, characters, and uses, aligning with the definition of manufacture under the Act. While the Assistant Collector rejected the classification under Chapter Heading 23.02, the Tribunal found no grounds to interfere with this decision. However, the lower authorities were deemed unjustified in denying the appellants' claim for exemption under Notification No. 23/55. Following the reasoning in the impugned order, the appellants were granted the exemption, and the appeal was allowed.