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TMI Blog2023 (7) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... ti, learned counsel appearing on behalf of the appellant at the outset submits that as regard the demand of duty on the granite slabs due to dispute in the classification whether the same is classifiable under tariff item no. 6802 23 90 or tariff item no. 2156 1200 the issue has been settled in favour of the appellant in the case of the following judgments:- * Aman Marbles Industries Pvt. Ltd. Vs. CE- 2003 (157) ELT 393 (SC) * Associated Stone Industries (Kotah) Ltd. Vs. CCE- 1992 (60) ELT 639 (T) affirmed by the Supreme Court of India- 2010 (251) ELT A147 (SC) * Oriental Trimex Ltd. Vs. CCE- 2010 (249) ELT 259 (T) * Classic Marbles Vs. CCE- 2013 (293) ELT 563 (T) * Classic Marbles Vs. CCE- 2014 (301) ELT 533 (T) 2.1 He submits that in view of the above judgments, it has been settled that by invoking chapter note of chapter 25 that the goods cannot be classified under 68022390 therefore, the demand of Rs.1,05,59,320/- on this count is not sustainable. 2.2 As regard the demand of Rs. 9,07,393/-, he submits that against the said demand an amount of Rs. 6,71,789/- has already been paid. As regard the demand of Rs.49,811, he does not press being a small amount. Similarly, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blocks, after being cut into natural marble slabs, are received in the factory of the assessee under the cover of Central Excise invoices from the job worker on discharge of Central Excise duty @ Rs. 30 per sq. mtr., after availing the benefit of Notification No. 4/2006-C.E., dated 1-3-2006. There is also no dispute that the agglomerated marble blocks, after being cut into agglomerated marble slabs, are received from the job workers under the cover of delivery challans on payment/discharge of Service Tax under the category of Business Auxiliary Service. 12. The adjudicating authority, in the entire Order-in-Original, has dedicated the findings as to whether the process of fibering of the marble slabs, filling of the marble slabs with resin, filling with color pigments in order to fill the cracks and pin holes present on the surface of the slabs, process of edge-cutting in which un-even sides of the slabs are being cut to give proper size to the slab and process of polishing wherein the front side of the slab is polished, will amount to manufacture as per the Section 2(f) of Central Excise Act, 1944 read with Chapter Note to Chapter 25 of Central Excise Tariff Act, 1985. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue. We find that the reliance placed by the adjudicating authority on the Chapter Note 6 of Chapter 25 is inserted w.e.f. 1-3-2006 would not have any applicability inasmuch as the said note would apply only when processes specified therein are undertaken for conversion of blocks into slabs or tiles. In order to appreciate correct position, we produce said Chapter Note 6 as under : "In relation to products of heading 2515 and 2516, the process of cutting or sawing or sizing or polishing or any other process, for converting of stone blocks into slabs or tiles, shall amount to "manufacture". 16. It can be seen from above reproduced chapter note that this note will be applicable to a situation wherein an assessee brings entire stone blocks into his factory, cuts into the slabs and tiles and does all other activities. It cannot be read into this Chapter note that an activity performed by the appellant on the duty paid slabs shall also amount to manufacture. We find that reliance placed by the Commissioner on the judgment on Hon'ble Supreme Court in the case of Emptee Poly Yarn Pvt. Ltd. is misplaced as the said judgment was rendered in context of Section 80 (IA) of Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocks till the polishing of the same would remain classifiable under Chapter 25 and would fall under Heading 2515 1220 and is eligible for benefit of Notification No. 4/2006. Our view is fortified by the decision of the Tribunal in the case of Oriental Trimex Ltd. (supra). We find in that judgment, the co-ordinate Bench of the Tribunal was considering an identical issue for the period prior to 1-3-2006 and also post 1-3-2006. In that case also, Revenue was canvassing a view that the product processed marble slabs would fall under Chapter 68. With respect, we reproduce the entire judgment, which is as under : "1. Common issue is involved in these appeals and, therefore, both are being taken up together for disposal. 2. The relevant facts of the case as per record, in brief, are that the appellants were purchasing marble blocks and marble slabs for processing thereon. The blocks were subjected to processing of sizing to make it rectangular and 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 sla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s reported at (2003) 10 SCC 771 (cutting into marble slabs and tiles). (ii) Rajasthan SED 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 Oriental Tiles Ltd. v. Union of India vide its judgment dated 18-5-2006. (cutting of marble into slabs and polishing). (c) The Central Government introduced 8 digit classification in Central Excise Tariff with effect from 1-3-2005. C.B.E. & C. vide Circular no. 808/5/2005-CX., dated 25-2-2005 clarified that Government had no intention to vary the duty structure on goods while transition from 6 digits to 8 digits. (d) In view of the above C.B.E. & C. Circular, the Department cannot change its stand post 1-3-2005 and the decisions are applicab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Item 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 laces before being cut into slabs of uniform thickness by Gangsaw machine. It is his submission that on physical examination of the goods, it was found that the goods were neither in crude form nor merely cut by sawing etc. So. it would not come within the purview of Chapter 25. 6. He submits that decision of the Hon'ble Supreme Court in the case of Aman Marble Industries Pvt. Ltd. (supra) would not apply for the reasons that in the said case, the process was simply mere cutt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rough 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. Ltd. 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 Anmol Granites v. Union of India reported in 2006 (199) E.L.T. 769 (Rajasthan) allowed writ petition, wherein, the issue was involved as to whether cutting and polishing of granite slabs and tiles from block amounts to manufacture and the end-product becomes subject to charge of excise duty under the Central Excise Act. 1944. (e)&em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 heading or sub-heading, the said process has been specified as "manufacture". 9. We find that Note 6 was inserted in Chapter 25 of the Tariff with effect from 1-3-2006, as under :- "In relation to products of heading 2515 and 2516, the process of cutting or sawing 01 sizing or polishing or any ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 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 16-3-2012, wherein C.B.E. & C. has specifically stated that the appropriate heading of polished marble slab shall be 6802 21 90 only and the benefit of exemption Notification No. 4/2006-C.E. would be admissible. The clarification issued by the Board would indicate that the appellant is eligible for the benefit of exemption Notification No. 4/2006-C.E. extending the analogy of the said Circular of C.B.E. & C., the duty liability, if any, arises on the appellant, on the marble slabs which they received prior to March 2006 from their job workers on payment of duty, the appellant is eligible to avail the CENVAT Credit on such amount and he would have been eligible for benefit of Notification No. 4/2006-C.E. and they would discharge of duty liability @ Rs. 30 per sq. mtr. as indicated in the said notification, which is revenue neutral position. 19. As regards leviability of duty on the processed agglomerated marble slabs for the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivity 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 26-2-2010, it is submitted by the ld. Counsel that the appellant has been discharging duty liability under the relevant Chapter 68. 20. As regards leviability of duty on the processed imported slabs, we find that the appellant is importing the marble slabs and does the process of fibre netting, resin filling, grinding, cutting and polishing as may be required. As already held by us hereinabove, by relying on the judgment of co-ordinate Bench of the Tribunal in the case of Oriental Trimex Ltd. (supra), this activity would not amount to manufacture during the relevant period on the imported marble slabs. 21. In view of the foregoing, we are of the considered view that the duty liability raised and confirmed against the appellant in both appeals E/1328-1331/2010 and E/70/2012 is not sustainable and consequently the penalties imposed are also not sustainable. 22. As we have decided the entire issue on the merits of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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