1995 (3) TMI 204 - AT - Central Excise

Summary

Issues Involved:
1. Classification of agglomerated marble blocks/tiles under Heading 25.04 or Heading 68.07 of the Central Excise Tariff.
2. Eligibility of agglomerated marble tiles for exemption under Notification No. 59/90, dated 20-3-1990.

Issue-wise Detailed Analysis:

1. Classification of Agglomerated Marble Blocks/Tiles:
The primary issue was whether agglomerated marble blocks/tiles should be classified under Heading 25.04 as claimed by the respondents or under Heading 68.07 as held by the Collector (Appeals). The respondents argued that their products, being composed mainly of marble, were classifiable under Heading 25.04. However, the Department contended that these products, being manufactured items made from crushed marble, cement/resin, and other additives, should be classified under Heading 68.07.

The Tribunal examined the competing headings, 25.04 and 68.07, and noted that Heading 25.04 covers "marble," a mineral product, whereas agglomerated marble is not a mineral product but a manufactured one. The Tribunal concluded that agglomerated marble, made from crushed marble mixed with cement, resin, and other materials, should be classified under Heading 68.07, which covers articles produced mainly out of crushed marble. The Tribunal found no infirmity in the Collector (Appeals)'s finding that agglomerated marble blocks/tiles are classifiable under Heading 68.07.

2. Eligibility for Exemption Under Notification No. 59/90:
The second issue was whether agglomerated marble tiles, if classified under Heading 68.07, were eligible for exemption under Notification No. 59/90, dated 20-3-1990, which exempts "mosaic tiles" from duty. The respondents claimed that their agglomerated marble tiles were known in the trade as "mosaic tiles" and thus eligible for exemption. They relied on affidavits from certain parties and the dictionary meaning of "mosaic" to support their claim.

The Tribunal scrutinized the affidavits and found them to be identically worded, suggesting they were procured by the respondents to suit their purpose. The Tribunal referred to the Supreme Court's ruling in Novopan India Ltd. v. Collector of Central Excise & Customs, Hyderabad, which held that affidavits prepared to bolster a party's case without technical backing are unreliable. Consequently, the Tribunal rejected the affidavits as unreliable.

The Tribunal also examined the respondents' commercial literature and sales invoices, which described the product as "Marbella agglomerated marble" and "Marbellam Tiles," not as "mosaic tiles." This evidence indicated that the tiles were not commercially known as "mosaic tiles." The Tribunal referred to the Supreme Court's ruling in Dunlop India Ltd. and Madras Rubber Factory Ltd. v. Union of India, which emphasized the importance of the trade's acceptation of a term in a taxing statute. Thus, the dictionary meaning of "mosaic" and the Chemical Examiner's report were deemed irrelevant.

The Tribunal reviewed the Tribunal's decisions in Mridul Enterprises v. CCE and Shon Ceramics Pvt. Ltd. v. CCE, where tiles were classified as "mosaic tiles" based on commercial acceptance. However, in the present case, the respondents failed to provide credible evidence that their agglomerated marble tiles were known as "mosaic tiles." Therefore, the Tribunal held that the decisions in Mridul Enterprises and Shon Ceramics Pvt. Ltd. were not applicable.

Conclusion:
The Tribunal concluded that agglomerated marble blocks/tiles are classifiable under Heading 68.07 of the Central Excise Tariff. It also held that the agglomerated marble tiles were not commercially known as "mosaic tiles" and thus not eligible for exemption under Notification No. 59/90, dated 20-3-1990. The appeal was allowed, and the impugned order was set aside.