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TMI Blog2009 (5) TMI 415X X X X Extracts X X X X X X X X Extracts X X X X ..... ocates, for the Appellant. Ms. Sudha Koka, SDR, for the Respondent. [Order per: T.K. Jayaraman, Member (T)]. - This appeal has been filed against OIO No. 22/2006, dated 23-11-2006 passed by the Commissioner of Central excise & Customs, Calicut. We heard both sides. 2. The appellants are engaged in the manufacture of various tiles mosaic tiles chequered tiles, paving tiles, inter locking tiles etc. Mosaic tiles are exempted from payment of Central Excise duty. Only for a brief period from 1-3-2002 to 28-2-2003 they were subjected to a concessional rate of duty of 4%. The Revenue conducted certain investigations against the appellants. Certain records were seized and statements of various persons were taken. On the basis of the investigation, a show cause notice dated 25-10-2005 was issued for the period 1-4-2001 to 31-10-2004 alleging that the appellants did not manufacture mosaic tiles and therefore they would not be entitled for the benefit of the exemption. Consequently, show cause notice for differential duty was imposed. In the show cause notice the following allegations were made:- (i) The appellants had never used mosaic chips in the manufacture of tiles, except for the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtue of several successor notifications which we do not think are to be enumerated here. He referred to Notification right from Notification No. 50/86, dated 10-2-1986 to Notification No. 3/2001, dated 1-3-2001. The exemption from excise duty granted in 1974 was withdrawn and duty @ 4% was imposed on mosaic tiles w.e.f. 1-3-2002. The 4% duty continued upto 28-2-2003. Again on 1-3-2003 excise duty was withdrawn and full exemption from excise duty hitherto available was restored. Full exemption was again withdrawn w.e.f. 21-3-2005 and the tiles were subjected to concession rate of 8% as against the tariff rate of 16%. The said concessional rate was also withdrawn w.e.f. 1-3-2006. Consequently the said tiles attract tariff rate of 16% w.e.f. 1-3-2006. It was urged that the benefit of exemption is available to tiles that are commercially referred to as mosaic tiles. Our attention was invited to the decision of the Tribunal in the case of Empire Industries Ltd. v. CCE - 1985 (19) E.L.T. 572 (Tri.) wherein it was held that the glass mosaic tiles would not be covered as article of glass but would be covered as tiles. This view was upheld by the Supreme Court in 1995 (77) E.L.T. A103 (S.C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... informed to the investigating authorities by Shri Balagopal in the statement recorded by the Department on 25-11-2004. The appellants have also produced ledger extracts of various periods from 2001-02 to 2005-06 which shows the increased purchase of stone dust. The definition of mosaic tiles would make it clear an individual tile which has an inherent will defined visible pattern or design or an abstract undefined pattern or design is considered a mosaic tiles and that the contents thereof are irrelevant to decide whether the product is mosaic tiles or not. Irrespective of the ingredients of the tile, any tiles whether unicoloured or multicolour, which collectively contribute to a mosaic design when these are fixed at a given site are called as mosaic tiles. These tiles could be either in square, rectangle or in any other geometric shape. The Tribunal in the Mridul Enterprises case reported in 1988 (37) E.L.T. 279 held that even unicoloured glass tiles are mosaic tiles. Once it has been decided by the judicial fora that the content of a tile is irrelevant to decide what the tile is commercially known as mosaic tiles or not, the entire discussion of the commissioner regarding the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined by sieving stone dust. Therefore, wheat is relevant is whether or not stone dust was purchased and not whether mosaic chips per se was purchased. (4) The mosaic tiles manufactured by them which are used for external purposes are sold under commercial invoices wherein it has been termed as "Grooved mosaic tiles" along with the code of the individual tile. The Revenue has recorded statements from six dealers and three statements from end users and two statements from other manufacturers. The above statements indicate that the conclusion that the tiles 'manufactured by the appellant are commercially not known as mosaic tiles emerges from the fact that tiles are used externally, are not polished and are known as paving tiles. It is not disputed by the dealers that the invoices under which the goods are received referred the goods as 'Grooved Mosaic Tiles'. It was submitted that the same dealers on enquiry made by the appellants have subsequently given letters stating that the goods can be called as mosaic tiles for external use. The said evidence was also produced before the adjudicating authority during the time of personal hearing. The appellants have produce evidences/affidavi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llular or foam glass in blocks, panels, plates, shells, or similar forms.' The use of the expression 'for mosaic' in the eight digit classification both under Chapter 68 and Chapter 70, clearly shows that the tiles are to be used for forming a mosaic. The eight digit classification shows that by placing the article, be it made of cement or glass, a design/pattern or mosaic may be formed and that the tiles by themselves need not contain any 'mosaic'; or a design/pattern. The department's contention that the absence of chips makes the tiles under dispute as 'non-mosaic' there, is erroneous. Presently, the appellants are discharging Central Excise duty at merit rate under falling under heading 68101910. The chapter heading 68101910 refers to as 'cement tiles for mosaic'. The classification is not disputed by the department and the payment of duty has been accepted. Once the classification as 'cement tiles for mosaic' is acceptable to the department for the purpose of collection of duty, it is submitted that the department cannot also reject the claim for exemption of duty on the ground that the products are not mosaic tiles. (5) The ld. Advocate has drawn our notice to several decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturns etc. This registration was cancelled once the exemption was restored. During this period, both the appellants and the department accepted the impugned goods as mosaic tiles. It is submitted that the Department was fully aware of the fact that the appellant had claimed the classification of the said goods as mosaic tiles, after indicating the individual trade name of the product along with the term mosaic in the relevant clearance documents. The department in the impugned proceedings has disagreed with the claim, relying upon the same trade opinions. Merely because some trade opinions do not support the claim of the appellant, for the reason, that claim of the appellant does not become a misstatement. When facts are know to both sides there cannot be allegation of suppression as held by the Hon'ble Supreme Court in the following cases: (i) Pushpam Pharmaceuticals Co. v. CC, Bombay [1995 (78) E.L.T. 401 (S.C.)] (ii) CCE, Vadodara v. Pioneer Scientific Glass Works [2006 (197) E.L.T. 308 (S.C.)]. (iii) Anand Nishikawa Company Ltd. v. CCE [2005 (188) E.L.T. 149 (S.C.)]. (iv) CCE, Bombay v. Bell Granite Ceramics [2006 (198) E.L.T. 161 (S.C.)]. Neither the show cause notice no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd moulded in a mosaic tile mould, two more layers one of dolomite and cement and another of cement and sand, in definite proportions, are moulded and all these three are pressed using a hydraulic press and the tile is taken out. The thickness of the tile is 20mm. The said tiles purchased by the customers are usable only after being laid on the concrete floor, ground and polished by a polishing machine and such finished tiles having the appearance of mosaic chips in different designs. These tiles are usually used inside the building and have a smooth surface. Based on the above, the Commissioner has stated it is mosaic tile have mosaic chips. The tiles are ground and polished after laying, the finished tiles have mosaic chips in different designs to produce surface decoration. He has also referred to the test results of the Chemical Examiner, Cochin in para 58.2. His conclusion is that the presence of mosaic chips or stone chips are essential to form surface decoration and to called tiles as mosaic tiles. In the absence of these materials, the product cannot be called as mosaic tiles. He has also referred to interlocking blocks and their thickness and he has stated that by no stret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statement at the time of investigation and the date during which they were given letters to the appellants, they cannot be accepted. He has also recorded that the perusal of the letters shows that they are all under the impression that these tiles contain stone chips or mosaic chips and on that basis they have stated that these are mosaic tiles. Therefore, these subsequent letters produced before him are all based on wrong assumptions and have no evidentiary value whatsoever. He has dealt with the decisions of the other Commissionerates in para 58.7 and has distinguished the facts of those cases. With respect to the decisions of the Addl. Commissioner of Central Excise, Chandigarh, the test report revealed that in that case product was classifiable as tiles. Further in the investigation, no evidence from the trade was collected. In the order passed by the Commissioner of Central Excise, Mumbai-III, the investigation did not seek any opinion from the trade regarding how the products was known in the market whereas, the manufacturer produced affidavits from the trade and the products are known as mosaic tiles in the market. Accordingly, the Commissioner classified the goods as m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ured by the appellant can be called as 'mosaic tiles' and whether the relevant exemption' notification benefit for the period in question can be granted or not to the appellant. There is no dispute about the fact that the items are classifiable under 68.90. As far as the exemption is concerned, the description given in the exemption Notification is as follows:- "mosaic tile that is to say tiles known commercially as mosaic tiles. So the point is the products manufactured by the Appellants should be known commercially as mosaic tiles. The description of the product as given in the show cause notice and in the order-in-original, reads like this: - "chequered tiles, paving tiles, interlocking tiles, etc. According to the Revenue, these tiles are not commercially known as mosaic tiles. Therefore, the exemption notification cannot be given. The Commissioner has relied on, first of all, the Chemical Examiner's report, then the statement of the some of the dealers who purchased the said items and also the statements of the General Manager of the company. He has also taken into consideration the chemical examiner's report and the view that the mosaic tiles should necessarily contain stone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision is taken by the Commissioner, the question also should have been whether there is the presence of chips or not. When such a question is not asked and when there is no definite answer to it, based on the report, the Commissioner cannot come to the conclusion that they had not used the stone chips. Further, the Commissioner's conclusion is also based on the investigation, which according to him revealed that except for a short period, the appellants never purchased this stone chips. This is based on the documents/registers seized form the appellants premises. Even the General Manager Sh. Balagopal in his statement dated 25-11-2004 referring to the manufacture of tiles has stated that the stone chips are being used which are obtained by sieving stone dust. So, the ld. Advocate explained that the stone chips are purchased and they are sieving it and from that they are getting the stone chips. Therefore, in our view the conclusion of the Commissioner that the appellant had not used stone chips is not based on a sound evidence. Further, the Commissioner has relied on the statements of some of the dealers, who have said commercially this product is not known as mosaic tiles. Later ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but use only for external applications though these are also mosaic tiles. These chequered tiles can in my opinion be used in internal floor applications also like staircase, bathroom etc." 11. The appellant, also in the invoices, describes the product as mosaic tiles. Even though the allegation of the Department is that for a long time they have been described it as mosaic and in their brochures, they are describing in a different styles. It was also argued by the ld. SDR that these items are used to only for external applications and by no stretch of imagination they can be called as mosaic. It was emphasized normally the mosaic tiles are used in the interior places in the buildings and not outside. In any case, on going through the various decisions submitted by the ld. Advocate, we find that similar products have been considered as mosaic tiles and benefits have been given the benefit of exemption notification. For examples, in the case of M/s. Basant Flooring Pvt. Ltd., the impugned items were similar to the paving tiles, which are interlocking pavers. Revenue proceeded against the appellant and then it was decided to drop the proceedings and this has not been appealed agains ..... X X X X Extracts X X X X X X X X Extracts X X X X
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