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TMI Blog1997 (1) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... are not entitled for the benefit of the Notification No. 77/83. He also demanded duty to the extent of Rs. 5,70,074.05 by invoking the extended period of limitation under the proviso to Section 11A of the Central Excises and Salt Act and a penalty of Rs. 20,000/- was also imposed on the appellants. 2. The learned Consultant Shri C. Chidambaram on the outset stated that the demand could not have been invoked beyond a period of six months inasmuch as there was bona fide belief on the part of the appellant that the process undertaken by the appellant does not amount to manufacture. He also pointed out that the District Industrial Officer had certified that the value of plant and machinery does not exceed Rs. 20 Lakhs which is the limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bona fide belief that this process does not amount to manufacture. 4. It was also pointed out that the Karnataka High Court also has taken a view in this regard. He pointed out that a Division Bench of the Karnataka High Court in Order No. STNP/35/1991, dated 12-12-1994 has also held that, in the context of the proceedings under the Sales Tax Act that cutting and polishing granite block does not amounts to manufacture. He pointed out that the view of the Hon'ble High Court was that in spite of polishing the same, it continues to be a granite block. It was therefore pointed out that there were bona fides for the appellant to take the view that this does not amount to manufacture. Hence, he pointed out that there was no wilful suppress ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of all the items would be includible. Based on this also, the learned Consultant pleaded that the value falls short of Rs. 20 Lakhs. He pointed out that since he is only directing his arguments on plea of limitation he is not pressing all these points in this appeal. 5. The learned JDR, Shri S. Arulswamy on the other hand stated that the Tribunal in appellants own case had already held that the goods are excisable in terms of Order No. 385-1996-D, dated 24-5-1996. He also pointed out that there are other decisions of the High Court as well as Supreme Court to show that such activity amount to manufacture. He pointed out that those parts which are sought to be excluded are essential parts of the machine for keeping them in running co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra) and this view was upheld by the Supreme Court since the appeal filed by the Department was dismissed as it was rightly argued by the appellant's Counsel. It is not confined to slabs but also the marble tiles. Because in Para 7 of the order, it was clearly held that the original identity continues despite the several processes undergone. In the trade circles, marble slabs or the marble tiles that are manufactured after cutting the edges, trimming, polishing and other processes continue to be known as marble. Unless it is proved that by virtue of the sawing process, a different or distinct commodity comes into existence, the process cannot be equated to manufacture. Further, in Para 8 of the said order, it was observed that the manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the consultant for the appellants also did not put forward any serious arguments in this regard before us." Hence, the facts and ratio are distinguishable as it was rightly considered in the case of Associated Stone Industries. It is further seen that the Karnataka High Court in the case of M/s. Foredg Granite Pvt. Ltd. v. State of Karnataka also held that this activity does not amount to manufacture. In these circumstances, the appellants certainly had grounds to entertain a bona fide belief that the goods were not excisable. We, therefore hold that for this reason, it cannot be said that there was a wilful suppression on the part of the appellant. 7. In regard to valuation, it is seen that the District Industrial Officer had ..... X X X X Extracts X X X X X X X X Extracts X X X X
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