TMI Blog2023 (7) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... aid claim of the appellant and arrive at a correct computation of demand. Demand of Rs. 2,26,598/- in respect of clearance of marble slabs - HELD THAT:- The appellant has paid the duty of Rs. 2.24 lacs accordingly, the same may be verified by the adjudicating authority. Appeal allowed in part. - Excise Appeal No. 12268 of 2013- DB with Excise Appeal No. 12308 to 12310 of 2013 - A/11408-11411/2023 - Dated:- 3-7-2023 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. C L MAHAR, MEMBER (TECHNICAL) Shri, Anand Nainawati, Advocate for the Appellant Shri, Tara Prakash, Deputy Commissioner (AR) for the Respondent ORDER By the impugned order demand of Rs.1,05,59,320/- was confirmed on the ground that the polished granite slabs are classifiable under tariff item no. 6802 23 90 as per the revenue and not under tariff item no. 2156 1200 as claimed by the appellant. The demand of Rs. 9,07,393/- was confirmed on artificial marble slabs cleared after 26.02.2010. The amount of Rs. 49,811 was demanded on the clearance of 1612 square metres of marble slabs without payment of duty and duty demand of Rs. 2,26,598/- was confirmed on the clearance of 7,333.275 Square metres mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LES reported in 2013 (293) ELT 563 (Tri.) wherein, the tribunal has passed the following order :- 9 . We have considered the submissions made at length by both sides and perused the records. 10 . The period involved in these appeals is from 1-3-2006 to 30-9-2010. 10.1 The issue involved in this case is whether the imported natural marble blocks, imported agglomerated blocks and imported marble slabs after being subjected to processes such as cutting or sawing into slabs, fibre backing, resin filling, polishing and further edging etc. are classifiable under CSH No. 2515 12 20, 6810 19 90 and 6802 21 90 of Customs Excise Tariff Act, 1985 as contended by assessee or would merit same classification under CSH No. 6802 19 00, 6810 99 90 and 6802 91 00 of Customs Excise Tariff Act, 1985 as contended by the Revenue. 11. We find that the facts in issue are not in dispute from both sides. Both sides agree that the appellants herein are importing marble blocks both natural as well as agglomerated. From their factory, the same are sent to different job workers for processes of sawing/cutting i.e. the process of cutting the said blocks into slabs as the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed manufacturing activity. It is also undisputed that the job workers discharge the duty liability by availing the benefit of Notification No. 4/2006-C.E., dated 1-3-2006 @ Rs. 30 per sq.mtr. We find as recorded by us hereinabove that there is no dispute that the processes which the appellant is carrying out is resin filling, fibre backing/netting, grinding, edge cutting and polishing before the product i.e. processed natural marble slabs are sold in the market. In our view, the processes undertaken by the appellant on duty-paid natural marble slabs would not amount to manufacture in terms of Section 2(f) of Central Excise Act, 1944 as no new, distinct separately identifiable and marketable product emerges as a result of such processes. We find that principle of law, in respect of identical product i.e. marble slabs, the judgment of Hon ble Supreme Court in the case of Aman Marble Industries Pvt. Ltd., 2003 (157) E.L.T. 393 (S.C.) and the judgment in the case of Associated Stone Industries Ltd. - 2003 (10) SCC 771 (S.C.) = 2010 (251) E.L.T. A147 (S.C.) would apply. 15 . We also find that the decision of the Tribunal in the case of Nitco Tiles Ltd. - 2004 (165) E.L.T. 50 (Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , grinding, edge cutting and polishing before being dispatched for sale into the market. As we have already held hereinabove that this kind of activity of converting stone blocks into slabs or tiles would amount to manufacture including the processes undertaken if an assessee had done so in Mis factory premises by doing such activity on the stone slabs. We find that the appellant-assessee in this case, after doing such activity after March 2008, on natural marble slabs has discharged the duty liability under Heading 2515 12 20 on payment of duty @ Rs. 30 per sq. mtr. in terms of Notification No. 4/2006-C.E. It is the case of the Revenue that post March 2008, the appellant s activity of processing natural marble slabs into processed natural marble slabs would be classifiable under CSH 6802 91 00 and chargeable to duty at ad valerom basis is incorrect as the word polishing which is mentioned in Note 6 of Chapter 25 is to be read in respect of product which is falling under Heading No. 2515, 2516 and cannot be taken out and read independently in isolation, so as to read that the appellant is manufacturing polished natural marble slabs and would get covered under Chapter 68 of Custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd imposed penalties along with interest. 3. In the impugned orders, Commissioner held that after introduction of 8-digit classification code from 1st March 2005 in the Central Excise Tariff Act, 1985 the decision of the Hon ble Supreme Court in the case of Aman Marble Industries v. CCE, 2003 (157) E.L.T. 393 (S.C.). would not apply and the products are not classifiable under Chapter 25 of the Tariff. Rough Marble Slabs/Polished Marbles are classifiable under sub-heading no. 6802 91 00, Polished Marble Tiles are classifiable under sub-heading no. 6802 21 10 and Granite Blocks and Granite files 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) Associ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concessional rate of duty under Notification No. 4/2006-C.E., shall be available to them. (e) As per Chapter Note 1 to Chapter 68, products of Chapter 25 are excluded from the scope of Chapter 68. Thus, the products which are otherwise classifiable under Chapter 25 are excluded from Chapter 68. (f) Goods under CETH 6802 are shaped articles and worked by a stone-mason or sculptor. Marble slabs in question are not such goods which are simply sawn/cut from blocks. Net fibre pasting, resin filling of holes and cracks of such slabs, would not change the character, name and use of marble slabs to that of articles mentioned within the scope of Heading 6802. Such processes would thus not take out their classification out of Chapter 25. (g) It is slated 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. oil behalf of the Revenue reiterates the findings of the Commissioner. He submits that the Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. v. CCE - 1992 (60) E.L.T. 639 (Tribunal) held that the marble slabs that are merely sawn from the marble blocks cannot be called as distinct commodity. The end-product, which would come into existence after the activity is completed, would still be called marble . Thus, 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. It has been held that marble blocks and slabs after cutting edging, trimming, polishing and other processes, it does not amount to manufacture as there is no transmission of marble into any other commodity. (b) Revenue filed appeal before 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Tiling process, therefore, the processes undertaken by the appellant amount to manufacture as the marble slabs will not remain the marble in the crude form. In these circumstances, the goods, in question, are rightly classifiable under Chapter 68 of the Central Excise Tariff. We find, the appellant are engaged in the manufacture of Marble Slabs and clearing the same under the Chapter 25 of the Central Excise Tariff. During the process of slitting, of the blocks into slabs, in 10% to 12% marble slabs there are some cracks. The appellant undertakes the process such as applying Resin, Sawing and also applying fibre netting at the back and also filling the cracks. The Revenue s contention is that the process undertaken by the appellant amounts to manufacture and the resultant product is classifiable 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 of Chapter 68 of Tariff. For the convenience, the relevant portion of Chapter 68 is reproduced below :- CHAPTER 68 Articles of stone, Plaster Cement. Asbestos, Mien or similar materials Notes : 1. This Chapter does not cover : (a) goods of Chapter 25; xxx xxx xxx 2. In heading 6802, the expression worked monumental or building stone applies not only to the varieties of stone referred to in heading 2515 or 2516 but also to all other natural stone (for example, quartzite, flint, dolomite and steatite) similarly worked; it does not, however, apply to slate. xxx xxx xxx 6802 Worked monumental or building stone (except slate) and articles thereof, other than goods of heading 6801, mosaic cubes and the like, of natural stone (including slate), whether or not on a backing; artificially coloured granules, chippings and powder, of natural 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), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifiable under Chapter 25 and benefit of Notification No. 4/2006-C.E., dated 3-2-2006 are admissible. Hence, the demand of duty and penalty are not sustainable. The impugned orders are set aside. The appeals are allowed with consequential relief. 18. One another aspect which needs to be mentioned herein is that the adjudicating authority has denied the benefit of exemption Notification No. 4/2006 as regards polished natural marble slabs on the ground that the said slab will not fall under CSH 6802 21 90. We find that the adjudicating authority has failed to note that sub-heading 6802 91 00 and three sub-headings following it are a sub-classification of group of articles described as other which is preceded by - - . It would mean that sub-heading and three entries are in the nature of residual entries and can be considered only if the subject goods are not classifiable under preceding entries. In the case in hand, we find that the goods are polished marble slabs and are covered under sub-heading No. 6802.21 and hence merit classification under sub-heading No. 6802 21 90. We find that the position seems to have been clarified by the Board vide Budgetary Circular dated 16-3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Trimex Ltd. (supra), we find that the activity of resin filling, polishing by the appellant on agglomerated marble slabs will not amount to manufacture. Hence, the demand of duty on such processed agglomerated marble slabs for the period prior to March 2008 is un-sustainable in law. As regards the clearance of processed agglomerated marble slabs after March 2008 upto 26-2-2010, the activity undertaken by the appellant of cutting/sawing of agglomerated marble blocks into slabs during this period resin filling and polishing would not amount to manufacture as the judgment of Hon ble Supreme Court in the case of Aman Marble Industries Pvt. Ltd. is applicable in this case. With effect from 26-2-2010, vide Finance Bill, 2010, as a Chapter note was inserted in Chapter 68 declaring such activities as deemed manufacture, such declaration and chapter note inserted w.e.f. 26-2-2010 will be effective from that date and cannot be applied to an activity for the earlier period. In our view, the demand of duty raised and confirmed on processed agglomerated marble slabs falling under Chapter 68 for the period March 2008 to 26-2-2010 is not sustainable under the law. As a matter of fact, post 26-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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