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TMI Blog2009 (8) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... fication code in the Tariff on 1-3-2005, unless by Section Note or Chapter Note of the Tariff or by wording of the relevant heading or sub-heading, the said process has been specified as “manufacture”. Hence the demand of duty and penalty are not sustainable. - E/1125 and 1647/2008 - 507-508/2009-EX(PB), - Dated:- 10-8-2009 - S/Shri M. Veeraiyan, Member (T) and P.K. Das, Member (J) Shri V. Lakshmi Kumaran, Advocate, for the Appellant. Shri K.P. Singh, DR, for the Respondent. [Order per: P.K. Das, Member (J)] . - Common issue is involved in these appeals and, therefore, both are being taken up together for disposal. 2. The relevant facts of the case as per record, in brief, are that the appellants were purchasing marble blocks and marble slabs for processing thereon. The blocks were subjected to processing of sizing to make it rectangular and cut into slabs of uniform thickness by using Gangsaw machines. The slabs got cracks and pin holes in some cases and pasted fibre glass sheets on one side and resin is applied to fill-in holes the cracks on the other side of the slabs for smooth transportation. The final products are rough marble slab, cut to size marble slab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CC 141 (cutting and polishing of stones into slabs). (iii) Aman Marbles Industries v. CCE - 2003 (157) E.L.T. 393 (S.C.) (Cutting into marble slabs). (iv) Bell Granito Ceramica Ltd. v. CCE , 2006 (198) E.L.T. 161 (S.C.) (Polishing of tiles). (v) Anmol Granites v. Union of India , 2006 (199) E.L.T. 769 (Raj.) cutting and polishing of granites into slabs. (vi) Calcutta High Court in the case of Oriental Tiles Ltd. v. Union of India vide its judgment dated 18-5-2006. (cutting of marble into slabs and polishing). (c) The Central Government introduced 8 digit classification in Central Excise Tariff with effect from 1-3-2005. CBEC vide Circular no. 808/5/2005-CX., dated 25-2-2005 clarified that Government had no intention to vary the duty structure on goods while transition from 6 digits to 8 digits. (d) In view of the above CBEC Circular, the Department cannot change its stand post 1-3-2005 and the decisions are applicable even in 8 digit tariff. (e) There was a uniform practice all over the country that no marble processing unit was paying duty during that period. (B) From 1-3-2006 and Notification No. 4/2006-C.E., dated 1-3-2006. (a) Note 6 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocess undertaken by them are sizing, surfacing, applying fibre paste, filling of resin, cutting in sizes, edge trimming, polishing, etc., and such processes are cleary beyond the process of cutting of crude or roughly trimmed marble. He also submits that Shri S.C. Anand, DGM (Operation) in his statement dated 6-7-2006 stated that the stone blocks are subjected to the processes like sizing and surfacing of the faces before being cut into slabs of uniform thickness by Gangsaw machine. It is his submission that on physical examination of the goods, it was found that the goods were neither in crude form nor merely cut by sawing etc. So, it would not come within the purview of Chapter 25. 6. He submits that decision of the Hon'ble Supreme Court in the case of Aman Marble Industries Pvt. Ltd. (supra) would not apply for the reasons that in the said case, the process was simply mere cutting of marble blocks into slabs. But, in the present case, the appellants were undertaking various processes by which the goods does bring into existence a distinct commodity. He also submits that marble blocks and slabs were further worked to the varieties of stone referred to in Heading No. 2515 or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustries Pvt. Lid. v. Collector of Central Excise, Jaipur reported in 2003 (157) E.L.T. 393 (S.C.) held that the cutting of blocks into marble slabs involves only sawing of the marble blocks and thereby does not bring into existence as distinct commodity so as to state that when such activity is completed a new substance has come into existence and marble will remain marble and, therefore, this activity does not amount to manufacture. (d) The Hon'ble Rajasthan High Court in the case of Anmol Granites v. Union of India reported in 2006 (199) E.L.T. 769 (Rajasthan) allowed writ petition, wherein, the issue was involved as to whether cutting and polishing of granite slabs and tiles from block amounts to manufacture and the end-product becomes subject to charge of excise duty under the Central Excise Act, 1944. (e) The Tribunal in the case of NITCO Tiles Ltd. v. CCE, Mumbai-II reported in 2004 (165) E.L.T. 50 (Tribunal-Mumbai) held that marble slabs obtained by cutting, polishing and fibre glass reinforcement of marble slabs does not amount to manufacture as no new distinct commodity having emerged. (f) The Tribunal in the case of R.K. Marble Pvt. Ltd. v. CCE, Jaipur-I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase as the said cases pertain to the period prior to 1-3-2005 (i.e. date of introduction of 8 digit Tariff). We are unable to accept the finding of the Commissioner. We find that ratio of the above decisions are squarely applicable in this case. The activities carried out by the appellants on the marble blocks and slabs do not amount to manufacture even after introduction of 8 digit classification code in the Tariff on 1-3-2005, unless by Section Note or Chapter Note of the Tariff or by wording of the relevant heading or sub-heading, the said process has been specified as "manufacture". 9. We find that Note 6 was inserted in Chapter 25 of the Tariff with effect from 1-3-2006, as under:- "In relation to products of heading 2515 and 2516, the process of cutting or sawing or sizing or polishing or any other process, for converting of stone blocks into slabs or tiles, shall amount to "manufacture". It is observed by the Commissioner in the impugned order that Note 6 to Chapter 25 is clarificatory in nature. It is also observed that even if note 6 was not in existence before 1-3-2006, the processes undertaken by the appellants rendered their product classifiable in a Chapter oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g therefore covers stone which has been further processed than mere shaping into blocks, sheets or slabs by splitting, roughly cutting or squaring, or squaring by sawing (square or rectangular faces). The heading thus covers stone in the forms produced by the stone-mason, sculptor, etc." 12. It is not the case of department that the goods in question are monumental or building stone or the stone in the form produced by stone-mason, sculptor, etc. So, the classification of goods under Chapter 68 and demand of duty after 1-3-2006 are not justified. 13. It is seen that the CBEC vide Circular No. 134/02/2006-CX., 4 dated 3-9-2008 clarified as under:- "A question has arisen as to whether marble slabs on which resin and hardner are applied on one side and fibre net on the other side would be covered by the exemption under notification no. 4/06-C.E., dated 1-3-2006. 2. The process of manufacture is that glass fibre net is applied on one side of the marble slabs to strengthen the slabs which are fragile and to enable safe handling and transportation. On the other side of this slab, polyester resin is applied to repair the cracks and pin holes in the slabs. The surface of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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