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TMI Blog2013 (9) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... uments relating to production and clearance of goods. This exercise continued till the evening of 28-8-2001. On scrutiny of daily stock account and other documents, it was found that stock available at the premises was in excess to the extent of total 1152.613 sq. mtr. of marble slabs, 380.66 sq. mtr. of marble tiles and 1356.73 sq. mtr. of polished marble tiles. Aforesaid excess quantity of marble slabs, marble tiles were seized by the official of excise department. Accordingly, a show cause notice was issued to the appellant on 14-12-2001 which was contested vide order-in-original dated 31-1-2002. The adjudicating authority vide order-in-original ordered confiscation of the seized goods. He, however, gave the respondent an option to redeem the seized goods on payment of redemption fine of Rs. 75,000/-, penalty of Rs. 40,000/- was also imposed on the respondent. 4. Being aggrieved of the order-in-original, the respondent filed appeal and the Commissioner (Appeals) relying upon the judgement of Supreme Court in the case of M/s. Aman Marble and Industries v. C.C.E., Jaipur reported in 2003 (58) RLT 595 (S.C.) = 2003 (157) E.L.T. 393 (S.C.) concluded that the process of cutting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 6 to Chapter 25 of the Central Excise Tariff Act. The respondent has also relied upon the judgment of Tribunal in the matter of Oriental Trimex Ltd. v. C.C.E., Noida reported in 2010 (249) E.L.T. 259 (Tri.-Del.) wherein it was held that sizing of marble blocks/slabs resulting into specific size slab tiles did not amount to manufacture prior to 1-3-2006. 8. We have considered the rival contention and perused the record. Rule 25 of the Central Excise Rules, 2001 deals with confiscation and penalty which reads thus :- RULE 25. Confiscation and penalty. - (1) Subject to the provisions of Section 11AC of the Act, if any producer, manufacturer, registered person of a warehouse or a registered dealer, - (a) removes any excisable goods in contravention of any of the provisions of these rules or the notifications issued under these rules; or (b) does not account for any excisable goods produced or manufactured or stored by him; or (c) engages in the manufacture, production or storage of any excisable goods without having applied for the registration certificate required under section 6 of the Act; or (d)&nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account". 11. On reading of above, it is evident that Section 2(f) does not define the word "manufacture" precisely but it only lays down an inclusive definition. The most generic meaning of the term "manufacture" is action or its process of producing the articles or material by application of physical labour, mechanical power or some chemical process. Other limited meaning of the word implies transformation of raw material into a new commercial commodity or finished product which has a separate identity. The Supreme Court in the matter of Union of India v. DCM reported in AIR 1963 SC 791 = 1977 (1) E.L.T. (J 199) (S.C.) while dealing with the definition of "manufacture" inter alia observe thus :- "According to the learned counsel "manufacture" is complete as soon as by the application of one or more processes, the raw material undergoes some change. To say this is to equate "processing" to "manufacture" and for this we can find no warrant in law. The word "manufacture" used as a verb is generally understood to mean as "bringing into existenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticle having distinct identity and character or use. Unless this occurs, the process, however elaborate it might otherwise be, would not graduate itself into 'manufacture'. The article that results from applying the process must be commercial known as another and different article. Such a question can be decided on evidence as to how the article is known and recognized by those in the trade, industry or commerce dealing with the article. The finding of the court must be based on such evidence and not on its own perceptions of the matter. In this case, evidence on the point is conspicuous by its absence. Indeed, in a sense, there was nothing to traverse. Appellant, so far as the proceedings in judicial review are concerned could well have remained content with a demurrer. The Court cannot reach a conclusion on its own perception and appreciation of the matter". 13. The legal position which emerges from the above referred judgments is that, whether or not a product has come into existence as a result of process covered within the definition "manufacture" would depend upon the factor whether as a result of application of the process upon the basic material a new and commercial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... still remained stone and thus its original identity continued." and this position was further reiterated as follows :- "... It is not possible to accept that excavation of stones and thereafter cutting and polishing them into slabs resulted in any manufacture of goods". 15. Coming to the marble tiles polished and unpolished, in order to find out whether the process of production of marble tiles amounts to manufacture under Section 2(f)(1) of the Act, it is necessary to understand the process for bringing into being the marble tiles. The Supreme Court in the matter of Income Tax Officer, Udaipur v. Arihant Tiles (supra) while dealing with this issue under Income Tax proceedings have concisely reproduced the stepwise activities undertaken by the procedure to bring into existence marble tiles polished and unpolished and held that process of bringing into being marble tiles amounts to manufacture. The relevant observation of Supreme Court in the aforesaid case are reproduced thus :- "6. To answer the above issue, it is necessary to reproduce the details of stepwise activities undertaken by the assessee(s) which read as follows :- "(i) Marble blocks exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he most important reasons for saying so is that in all such cases, particularly under the Excise law, the Court has to go by the facts of each case. In each case one has to examine the nature of the activity undertaken by an assessee. Mere extraction of stones may not constitute manufacture. Similarly, after extraction, if marble blocks are cut into slabs per se will not amount to the activity of manufacture. 15. In the present case, we have extracted in detail the process undertaken by each of the respondents before us. In the present case, we are not concerned only with cutting of marble blocks into slabs. In the present case we are also concerned with the activity of polishing and ultimate conversion of blocks into polished slabs and tiles. What we find from the process indicated herein-above is that there are various stages through which the blocks have to go through before they become polished slabs and tiles. In the circumstances, we are of the view that on the facts of the cases in hand, there is certainly an activity which will come in the category of "manufacture" or "production" under Section 80-IA of the Income Tax Act. As stated herein- above, the judgment of this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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