ORIENTAL TILES LTD Vs. UNION OF INDIA UOI

JUDGEMENT

(1.) By this application the writ petitioners in substance want a declaration that additional duty equal to excise duty is not leviable on imported marble materials under the provision of the Custom Tariff Act, 1975 (hereinafter referred to as the said Act). The petitioner has been carrying on business of importing and exporting of polished marble and marble slabs. While carrying on business they import polished marble slabs from different countries namely Oman, Srilanka, Spain, Italy, Greece, Egypt and Turkey observing all legal formalities. The petitioners enjoy exemption from payment of basic customs duty in respect of the import of polished marble slabs from Srilanka on the strength of notification issued under Section 25 of the Customs Act, 1962. The said notification has been issued in view of bilateral free trade agreement entered into by and between Republic of India and Socialist Republic of Srilanka. There is no dispute about the aforesaid fact. The petitioner had hitherto been paying additional duty under the said Act at the rate of 16 per cent of the invoice value. The levy of the additional duty under the said Act is co-related to the excise duty leviable on similar product if produced in this country. The Supreme Court in case of Aman Marble Industries Pvt. Ltd. v. Collector of Central Excise, Jaipur has held following the previous judgment of the same Court reported in case of Rajasthan State Electricity Board v. Association of Stones Industries and Anr. amongst others that cutting and polishing of marbles into slabs did not amount to manufacture of goods. The word 'manufacture' generally and in the ordinary parlance in the absence of its definition in the Act, should be understood to mean a new and different Article having distinctive name, character or use after undergoing some transformation. When no new product as such comes into existence, there is no process of manufacture. The cutting and polishing of stones into slabs is not a process of manufacture for obvious and simple reason that no new and distinct commercial product came into existence as the end product still remains same and thus its original identity continue.

(2.) Mr. Panja learned Senior Advocate appearing with R. N. Das Senior Advocate and Mr. D.P. Dutt learned Advocate in support of this petition contends that the intention of the Government is to make the import of the polished marble slabs duty free either under the Customs Act, 1962 or under any other Act. The bilateral trade agreement as aforesaid has extended the benefit to the exporter of Srilanka into this country. In recognition of this bilateral relationship exemption has been granted from payment of Customs Duty in relation to the import of polished marble slabs either wholly originated from Srilanka or partially. In case of partial origination f.o.b value should not exceed 65 per cent. It is clear from the aforesaid judgment of the Supreme Court, polishing and cutting and sizing of marble slabs do not involve manufacturing process nor the same emerge a new product so as to bring within the purview of Excise Duty under the Central Excise Act.

(3.) He contends further that the Supreme Court judgment has made it clear that no Excise Duty is leviable on the indigenous similar product. He has drawn my attention to the language of Section 3 of the said Act and contends that tax event under the said Act is closely related to the Tax event of Excise Duty in respect of these materials. There is no separate provision for the mode of calculation or imposition of duty under the said Act and the mode and method as provided in Excise Act is adopted. When the excise duty is not leviable at all on this material, there is no basis for imposition of additional duty.