POLAR MARMO AGGLOMERATES LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS writ petition has been filed for quashing the show cause notice dated October 14, 1991 (Annexure- 5) and demand notice dated October 25, 1991 (Annexure-7), for declaring that Item No. 2504 of Chapter 25 of the Schedule appended to the Central Excise Tariff Act, 1985 (In short 'act of 1985') is ultra vires of the charging Section 3 read with Section 2 (f) of the Central Excise and Salt Act, 1944 (In short 'act of 1944') and for holding that preparation of agglomerated marble slabs/tiles do not involve manufacturing process and no excise duty is leviable on them and, in the alternative, for holding that agglomerated marble slabs and tiles are exigible to excise duty under Item No. 2504. 21 and 2504. 31 and not under Item No. 68. 04 of the said Schedule.

(2.) THE case of the petitioner is thus. It is engaged in the business 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 commodity having distinct name, characteristics and use. Making of slabs/tiles from agglomerated marble blocks does not involve any process of manufacturing. Marble blocks, slabs and tiles have been specifically classified under heading 25. 04 of the Schedule appended to the Act of 1985. No extended definition has been given in the Notes of Chapter 25 of the said schedule. Despite this, the Central Excise Authorities insisted upon the petitioner to obtain Central Excise Licence and also to submit classification list. Classification List was submitted, classifying the said products under sub-heading 2504. 90 and claimed exemption from duty under Notification No. 16/90/ce dated October 20,1990. THE Superintendent, Central Excise, Range II, Udaipur (respondent no. 40 directed the petitioner to submit revised classification list- classifying marble slabs and tiles under heading 2504,21 and 2504. 31 respectively. THE petitioner did so under protest but it was not formally approved by the Assistant Collector. On the instructions of the Collector, Central Excise (respondent no. 2), the Assistant Collector (respondent no. 3) issued notices Annexure 5 to the petitioner to show cause as to why its product may not be classified under heading 68. 07 of the Act of 1985 relying upon Explanatory Note given under Chapter 68 of HSN. THEreafter, demand cum show cause notice Annexure 7 was issued; Reply was filed, seriously opposing the said notices. M/s Kedia Agglomerated Marble Ltd. , Halol (Gujrat) is the only other factory engaged in making similar marble agglomerated slabs/tiles. THE Assistant Collector approved their classification under heading 2504. 21 and 2504. 31. Reasonable opportunity of hearing is not being given by the Central Excise Authorities. THE petitioner has no alternative but to approach this Court under Article 226 of the Constitution of India.

(3.) IN Deputy Commissioner of Sales Tax vs. Pio Food Packer (2), it has been observed as under: - "referring to Anheuser Busch Brewing Association v. United States (52 L. Ed. 336, 338) the Court said: "manufacture implies a change, but every change is note 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. "