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2009 (8) TMI 454

..... nd 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. Show cause notice issued and make a demand of penalty. Held that- the commissioner observed that the case of Associated Stone Industries (Kotah) Ltd. and Aman Marbles Ltd. are not applicable in the present case 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”. Hence the demand of duty and penalty are not sustainable. - E/1125 and 1647/2008 - 507-508/2009-EX(PB), - 10-8-2009 - S/Shri M. Veeraiy .....

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..... ranite Blocks and Granite Tiles are classifiable under sub-heading no. 6802 23 10 and 6802 93 00 of the Tariff respectively. 4. Ld. Advocate on behalf of the appellants submits that the entire period of demand of duty may be divided in two parts, as under: (A) From April, 2005 To February, 2006 (i.e. Prior to 1-3-2006) (a) The processes are cut-to-size rough marble slabs cut-to-size marble slabs (basically rectangular pieces of slabs) and polished marble tiles. (b) It is well settled by the various decisions that the processes do not amount to manufacture prior to 1-3-2006:- (i) Associated Stone Industires (Kotah) Ltd. v. CCE, 1992 (60) E.L.T. 639, affirmed as reported at (2003) 10 SCC 771 (cutting into marble slabs and tiles). (ii) Rajasthan SEB v. Associated Stone Industries - (2000) 6 SCC 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 Orient .....

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..... ion out of Chapter 25. (g) It is stated that all the marble slab processors are availing concessional rate of duty under the said notification and the appellants should not be treated separately. (h) Without prejudice to the above contention, it is submitted that the demand of duty was not properly quantified and cum-duty benefit was not extended. 5. Ld. DR on behalf of the Revenue reiterates the findings of the Commissioner. He submits that the Commissioner classified the goods under Chapter 68 for the entire period. He submits that the process undertaken by the appellants is not merely cutting by saw. He submits that besides cutting a number of processes were being undertaken by them on the raw materials received by them. The process 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 th .....

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..... ore the Hon ble Supreme Court against the order of the Tribunal in the above case of Associated Stone Industries (Kotah) Ltd. (supra). The Hon ble Supreme Court dismissed the appeal filed by the Revenue as reported in (2003) 10 SCC 771 (Collector of Central Excise, Jaipur v. Associated Stone Industries (Kotah) Ltd. held as under:- 2. We have gone through the judgment and order passed by the CEGAT. It cannot be held that cutting, edging, trimming, polishing and other processes on the marble slabs amount to a process of manufacture as it does not bring in a distinct product. Hence, this appeal is dismissed. There shall be no order as to costs. (c) The Hon ble Supreme Court in the case of Aman Marble Industries 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 .....

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..... able under Chapter 68 of the Tariff. We find that this issue came before the Tribunal in the case of Nitco Tiles Ltd. (supra), whereas the Tribunal held that the process of polishing, Resin coating and fibre glass reinforcement of marble slabs does not amount to manufacture. In the present case, the appellants are undertaking the similar processes. Therefore, the ratio of above decision is applicable, in the facts of the present case. In view of the above decision, the impugned order is set aside. The appeal is allowed. 8.The Commissioner observed that the case of Associated Stone Industries (Kotah) Ltd. (supra) and Aman Marbles Ltd. (supra) are not applicable in the present case 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 .....

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..... stone (including slate) 6802 21 10 Marble blocks tiles 11. It is clear that Note 1 of Chapter 68 specifically excluded the goods of Chapter 25. It is revealed from HSN Explanatory Notes, that Heading 6802 covers natural monumental of building stone (except slate), which has been worked beyond the stage of normal quarry products of Chapter 25 . In the present case, Commissioner observed that the activity carried out by the appellants are worked beyond the stage of normal quarry products of Chapter 25. We are unable to accept the finding of Commissioner in view of the HSN Explanatory Notes of Heading 6802 as under:- The heading 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 t .....

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