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TMI Blog2007 (8) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... Y.D. Banga, SDR, for the Respondent. [Order per : Jyoti Balasundaram, Vice-President]. - The appellants herein who are manufacturers of ceramic tiles falling under Chapter 69 of the Schedule to the CETA, 1985, imported honed marble slabs under bills of entry dated 23-3-2004, claiming exemption from Customs duty under Notification 26/2000-Cus., dated 1-3-2000, claiming that the goods were of Sri Lankan origin. The goods were required to discharge liability to additional customs duty (countervailing duty) equivalent to Central Excise duty leviable. The department was of the view that the correct classification of the product was under CET sub-heading 2504.21 attracting duty @ 16%. Cenvat credit on such goods was restricted to Rs.30/- per sq. mtr. as per Rule 3(6)(i)(c) of the Cenvat Credit Rules, 2002. During the examination of the bills of entry, it was noticed that the appellants had misdeclared the Central Excise Tariff heading as 6807.90 (instead of 2504.21) with a view to avail credit to the extent of full CVD paid and overcome the restriction under the Cenvat Credit Rules. The bills of entry which were initially provisionally assessed, were finally assessed for the purpose o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. v. CCE, Jaipur, 2003 (157) E.L.T. 393 (S.C.), the question that arose for consideration was whether cutting of marble blocks into marble slabs amounts to manufacture for the purpose of levy of basic excise duty under the Central Excise Act. The appellants contended that the activity carried out by them does not amount to manufacture, as cutting of blocks into slabs involves only sawing, and thereby does not bring into existence a distinct commodity so as to bring into existence a new substance and even after such activity is completed, the marble remains marble. On the other hand, the Revenue contended that the activity has been specifically covered by Chapter Heading 25.04 and when certain processes are applied to a commodity to make it marketable, it certainly amounts to manufacture and attracts duty under the above mentioned chapter heading. The Apex Court relied upon its earlier decision in Rajasthan State Electricity Board v. Associated Stone Industries, JT 2000 (6) S.C. 522 wherein it was held that excavation of stones from a mine and thereafter cutting and polishing into slabs did not amount to manufacture for the reason that no new and distinct commercial product came i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ured or produced in India and then to see what amount of excise duty was leviable thereon.' The brief background of the case is that the appellants who used asbestos fibre as a raw material, imported the same into India prior to 1986; a demand of additional duty of Customs under Section 3(1) of the Customs Tariff Act, 1975 was raised by the department; the appellants represented that no duty was payable, as asbestos fibre which was imported had not been manufactured or produced but was a natural mineral; the Collector of Central Excise, Hyderabad, issued a trade notice on 3-8-1997 taking the view that asbestos fibre as processed and graded had a distinct character different from asbestos rock and the said item was covered within TI 22F of the Schedule to the erstwhile Central Excise Tariff and there was a liability to pay excise duty thereon. The appellants were also informed vide letter dated 17-8-1997 of the Ministry of Finance that the process by which the asbestos fibre was obtained was a process of manufacture and the said item fell within TI 22F. The consequence of this was that the demand of additional duty under Section 3(1) of the CTA was raised because the imported item, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, we are clearly of the opinion that additional duty can be levied only if on a like article excise duty could be levied. The decision in Khandelwal Engineering Works case to the extent it takes a contrary view, does not appear to lay down the correct law." 6. A similar view was taken in CCE, Bhubaneswar v. TISCO, 2003 (154) E.L.T. 343 (S.C.), rejecting the contention of the Revenue that duty leviable under Section 3 of the Customs Tariff Act is a countervailing duty which is levied merely on the import of goods and that no other consideration should come into the picture, holding that this issue stood concluded against the Revenue by the Hyderabad Industries decision cited supra (the goods in question were exempted at the relevant time from payment of Central Excise duty under Notification 75/84-C.E., dated 1-3-1984). 7. Since the process by which marble slabs are obtained from marble blocks does not amount to manufacture, as held in the case of Aman Marbles, the imported marble slabs cannot be subjected to countervailing duty in the light of the Hyderabad Industries and TISCO decisions cited supra. Since the appellants have already taken Cenvat credit of CV duty alre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in PSL Holdings Ltd. v. CCE, Rajkot, 2003 (156) E.L.T. 602, Vinayak Industries v. CCE, 2003 (159) E.L.T. 456, Creative Enterprises v. CCE, Surat - 2004 (60) RLT 342, Silvassa Wooden Drums v. CCE, Vapi 2005 (184) E.L.T. 392 and Systematic Steel Industries Ltd. v. CCE, Vapi - 2005 (191) E.L.T. 663. 10. Recovery of balance credit of Rs. 82,69,447/- is sought on the ground that in terms of Rule 3(6)(i)(c) of the Cenvat Credit Rules, 2002, credit or CV duty paid on inputs falling under CET sub-heading 2504.21 is restricted to Rs. 30/- per sq. mtr. and the amount abovementioned is in excess of Rs. 30/- per sq. mtr. and is therefore recoverable. However, since the imported marble slabs are not liable to levy of countervailing duty, the question of holding that CV duty has been paid on goods falling under CET sub-heading 2504.21 is erroneous and hence the restriction contained in Rule 3(6)(i)(c) of the Cenvat Credit Rules, 2002 does not cover the present case. 11. In the light of the above, we set aside order dated 8-11-2006 of the Commissioner of Central Excise, and allow appeal No. E/238/07 as above. 12. The appeals are allowed in the above terms. (Pronounced in Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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