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Issues:
1. Whether crushing of mineral lumps into powder amounts to manufacture under Section 2(f) of the Central Excises and Salt Act. Analysis: The appeal before the Appellate Tribunal CEGAT, New Delhi arose from an order passed by the Collector of Central Excise (Appeals), New Delhi. The appellants, engaged in manufacturing mineral powders, were alleged to have contravened Rules 9 and 174 by crushing mineral lumps into powder without obtaining a Central Excise License after crossing the exemption limit. The Deputy Collector and the Collector (Appeals) upheld the demand and penalty imposed on the appellants. The appellants contended that crushing mineral lumps into powder did not constitute 'manufacture' as per Section 2(f) of the Act. They relied on various judgments to support their argument, emphasizing that the chemical composition and nature of the mineral did not change through the process. On the other hand, the department argued that the products obtained after crushing were marketable and had distinct characteristics, thus constituting 'manufacture.' The main issue for consideration was whether crushing and grinding of mineral lumps into powder amounted to 'manufacture' under Section 2(f) of the Act. The appellants argued that the mineral powders retained their original properties and were also marketed in lump form, thus not undergoing a substantial transformation to be considered 'manufacture.' However, the Tribunal observed that the minerals in their natural form were not marketable and required processing to become usable in industries like ceramics and refractories. The Tribunal noted that the products obtained after crushing were distinct in name, character, and use from the mined lumps, making them marketable commodities. The Tribunal referred to the judgment in the case of Associated Soap Stone Distributing Co. (P) Ltd., where it was held that the conversion of soap stone lumps into powder constituted 'manufacture.' Relying on this precedent, the Tribunal held that the crushing and grinding of mineral lumps into powder or smaller lumps amounted to 'manufacture' under Section 2(f) of the Act. Despite the appellants' reliance on other judgments and decisions, the Tribunal found them distinguishable and not applicable to the current case. Consequently, the Tribunal dismissed the appeal and allowed the cross-objection filed by the department. In conclusion, the Tribunal upheld that the process of crushing and grinding mineral lumps into powder or smaller lumps of specified sizes constituted 'manufacture' under the Central Excises and Salt Act. The decision was based on the distinct marketability and characteristics of the processed minerals compared to their natural form, as established in previous judgments and the specific facts of the case.
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