TMI Blog1993 (11) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of manufacturing marble agglomerated slabs/tiles. They are made from lumps/chips of naturally excavated marble which are purchased from market. They are crushed and pigments and binding agents are mixed with it. The mixture is poured into moulds. Thereafter, pressure is applied to the mixture and it is subjected to vacuum vibral process. Marble agglomerated blocks are formed and therefrom slabs are prepared by sawing them. The slabs are trimmed, polished and finally cut into slabs/tiles of the required sizes. Marble agglomerated blocks contain more than 90% natural marble and 6 to 8% pigments and binding agents. They have all the characteristic qualities of natural marble. There is no difference in between marble slabs and tiles obtained from excavated marble blocks and marble slabs and tiles obtained from agglomerated marble blocks, except that the latter contains pigments and binding agents. According to Section 3 of the Act of 1944, duty of excise is on manufacture and production of goods specified in the Schedule to the Act of 1985. No duty is exigible where process of manufacture is not involved in the making of goods. Manufacture must bring into existence a new commercial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition of pigments and binders differentiate its product from the natural marble. The peti- tioner's product is a new commercial commodity. The Collector, Central Excise did not issue any instructions. Demand notice Annexure 7 was served to save limitation. Reasonable opportunity of hearing was duly given to the petitioner. 4.Arguments of the learned counsel for the parties have been heard and their written arguments have been perused. 5.Taxable event under the Act of 1944 is manufacture. The question for consideration is whether the aforesaid processes amount to manufacture? The definition of the word `Manufacture' given in Section 2(f) of the Act of 1944 is inclusive in nature. It itself does not give the meaning of "Manufacture". It may be mentioned here that in the Notes given in Chapter 25 of the Schedule of the Act of 1985, extended meaning of manufacture has not been given as has been given in other chapters, namely, 13, 24, 33 and 52. As such amendment made in Section 2(f) of the Act of 1944 by Act No. 5 of 1986 has not changed the position. Mere change is insufficient. A new and different product should emerge having distinctive name, character and use. There must be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... United States (52 L.Ed 336, 338), the Court said : "Manufacture implies a change, but every change is not manufacture and yet every change in an article is the result of treatment, labour and manipulation. But something more is necessary ............There must be transformation; a new and different article must emerge, `having a distinctive name, character or use." And further : "At some point processing and manufacturing will merge. But where the commodity retains a continuing substantial identity through the processing stage we cannot say that it has been "manufactured." 8.Now, the question is whether marble agglomerated block is a new product. It is not in dispute that preparation of agglomerated marble blocks involve the following processes : Crushing of lumps/chips of marble,1. Mixing of pigments and binding agents i.e. Polyster, resin,2. white cement etc. (6% to 8%) with crushed marble (over 90%) Pouring the mixture in the moulds; and3. Application of pressure.4. The petitioner has stated in para No. 4 of its rejoinder that the properties and characteristics of agglomerated marble remains the same as that of excavated marble, it remains as marble even after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly cut with a normal hand cutting machine used for cutting natural marble or ceramic tiles. About repolishing Yes VILLA NOVA can be repolished by the same machine as natural marble is polished to get back its luster after it becomes dull on prolonged use and improper maintenance. VILLA NOVA, because of its unique structure will look as new, even after repolishing. About Shade variation Due to the basic raw material itself being non-uniform in nature, there may be a possibility of minor shade variations. However, accuracy in uniformity is achieved to an extent not found in nature. About stains VILLA NOVA has the same staining characteristics as marble. It is prone to the staining effect of the following substances." 11.Certificates of Gem Marbles, Royal Marble House and Sri Mani-dhari Stones have been filed to the effect that agglomerated marble is known in the trade market and is being sold as natural marble. Along with the affidavit dated July 27, 1993, the petitioner has also filed certificate (Annexure 29) of Technical Assistant R.S. Sharma dated October 12, 1992. It states - "It is certified that the natural marble blocks and agglomerated marble blocks (produced b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in common parlance. It has not been defined in the Act and being a word of every day use it must be construed in its popular sense meaning that sense which people conversant with the subject matter with which the statute is dealing would attribute to it. It is to be construed as understood in common language." 14.The word Agglomeration is defined in W.K.V. Gale, the Iron and Steel Industry - A Dictionary of Terms, published by David and Charls, Newton Abbot at page 8 as under :- "Agglomeration — Collecting together into lump form of fine iron ores, dust and other materials which could not otherwise be smelted, Sintering (qv) and pelletizing or balling (qv) are the common processes used today." 15.In Punjab Industries v. Collector of Central Excise, 1989 (43) E.L.T. 314 (Tribunal), it has been held that no new commodity emerges by conversion of coal dust into coal briquettes by mixing molasses. It has been held in Bharat Forge Press Industries (P) Ltd. v. Collector of Central Excise, 1990 (45) E.L.T. 525 (SC), that merely because goods after processing become different commercial commodity or have a distinctive name does not change Excise classification if they continue to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the change in the HSN. 18.There is no substance in the contention of the learned counsel for the respondents that goods prepared by the petitioner fall under the Entry 68.07, "All other articles of Stone, Plaster, Cement, Asbestos, Mica or similar materials not specifically mentioned or given in the first note of this Chapter (No. 68)." It is mentioned in Chapter 68 itself that it does not cover the goods of Chapter 25. It is well settled law that a more specific item should be preferred to one less so. The above quoted rule says that any reference to material or substance in a heading shall include reference to combination of that material or substance with other material or substance and that the classification of goods consisting of more than one material shall be as per Rule 3. Rule 3(a) says that in case of composite material the heading which provides more specific description shall be preferred. The petitioner's products are described as marble and, therefore, they can only fall under Heading 25.04. It is not in dispute that the petitioner's goods contain more than 90% excavated marble. As such it has to be classified under Chapter 25 and not under Chapter 68. 19.It was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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