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TMI Blog1998 (11) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... he Central Excise Tariff Act. One of the raw materials used is felspar powder which is a mineral and is used along with other minerals to manufacture the resultant product. The appellants were issued with show cause notice dated 22-2-1990, wherein it has been alleged that during the course of checking the records the intelligence department found that during the course of manufacture of electrical insulators the material viz. felspar powder was being used and that the contention of the department was that the said material fell under Chapter Heading 2505.00. It was further alleged that on enquiry it was found that the appellants were supplying raw materials to M/s. Panchmahal Stone Milling Industries, Godhra and M/s. Sreenathji Mineral Industries, Godhra for crushing into felspar powder and that the said powder has been received by them without payment of Central Excise duty and the goods had been utilised by them in the manufacture of electrical insulators without discharging the duty liability by the said two other concerns mentioned above. Thus, the demands were raised on the basis of clearance of felspar powder said to have been manufactured without obtaining any licence during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the product what manufactured through job worker which is classifiable and chargeable to duty under sub-heading No. 2505.00 is leviable to be paid by M/s. Jayashree Insulators. In that view of the matter, he confirmed the duty for the period Feb., 1985 to 29th August, 1989 under Rule 9(2) of Central Excise Rules, 1944 read with Proviso to sub-section (1) of Section 11A of the Act. He also ordered for confiscation of 166.66 MT of felspar powder valued at Rs. 2,18,491.26 and further granting them redemption on payment of redemption fine of Rs. 25,000/-. He imposed penalty of Rs. 10,000/- on M/s. Jayashree Insulators, Kalol. He has also imposed penalty of Rs. 10,000/- on the either of two job workers M/s. Panchmahal Stone Milling Industries and M/s. Shrinathji Mineral Industries. 5. We have heard Shri M.A. Rangaswamy, the learned Advocate for the appellants and Shri A.K. Madan, the learned DR for the Revenue. 6. Both the sides reiterated the pleas. 7. The learned Advocate submitted that the issue pertaining to conversion of felspar lumps into powder was considered by the Tribunal in large number of judgments and it was held that crushing of stones into chips powder amounted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cement Works which has been followed in the earlier judgment of the Tribunal rendered in the case of Ajanta Marble Chemical Industries v. Collector of Central Excise, as reported in 1991 (53) E.L.T. 457 and another judgment of the Tribunal rendered in the case Collector of Central Excise v. Deen Fertilizers Minerals, Dehra Dun and Another as reported in 1991 (56) E.L.T. 551 (Tribunal) = 1991 (17) ETR 505. The Larger Bench also overruled the judgment of the Tribunal rendered in the case of SAIL v. Collector of Central Excise, as reported in 1991 (54) E.L.T. 414 (Tribunal) = 1991 (17) ETR 535 in view of the judgment of the M.P. High Court. There was a single Bench judgment of the M.P. High Court and also Division Bench judgment of the same High Court on this issue hence the matter was referred to the Larger Bench. The Larger Bench in the case of Kher Stone Crusher (supra) of the M.P. High Court held that the item is to be regarded as goods and it is excisable and dutiable. Relying on the Supreme Court s judgment, the Larger Bench of the High Court held that conversion of lime stones into chips and powders amounted to manufacture. In view of these citations, the aspect pertaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respects to the Hon ble Judicial Member, my views and orders are as follows :- 12. I observe that the conversion of felspar lumps into powder by grinding/crushing is the basic issue which is required to be considered in the context of Section 2(f) of the Central Excise Act and Chapter Note 2 of Chapter 25 of the Tariff. These provisions have been interpreted by the Tribunal in its Order in the case of SAIL reported in 1991 (54) E.L.T. 414; And in my opinion it is incorrect to say that this order of the Tribunal has been over-ruled by M.P. High Court in the case of Kher Stone Crusher or a Larger Bench of the Tribunal. The judgment of the M.P. High Court in the above case has been passed with reference to the Sales Tax Act and the Hon ble Court had come to the conclusion in the facts and circumstances of the case before them that conversion of boulders or stone into `gitti amounts to manufacture as there is transformation of the stone and a new different commercial article is produced. It has nowhere referred to or mentioned the Tribunal s Order in SAIL case (supra). In the SAIL case on the one hand, Section 2(f) and Chapter Note of the Chapter had been referred to, on the other h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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