Manufacture under excise law requires a new commercial commodity; marble slab processing did not attract fresh duty.

Cutting, polishing, resin coating and fibreglass reinforcement of duty-paid marble slabs did not create a new and distinct commercially marketable commodity; the essential character remained marble slabs, so the processes did not amount to manufacture and no fresh excise duty arose. The limitation question for the demand on marble tiles from 9 August 1996 onward was remanded for re-examination because departmental knowledge and the effect of the correspondence had to be reconsidered on the facts. The composite penalty was also remanded, as it depended on the final determination of duty and limitation issues.

---

---

Issues: (i) Whether cutting, polishing, resin coating and fibreglass reinforcement of duty-paid marble slabs amounts to manufacture and gives rise to fresh excise duty liability; (ii) whether the demand on marble tiles for the period from 9 August 1996 onwards is barred by limitation; (iii) whether the composite penalty requires interference.

Issue (i): Whether cutting, polishing, resin coating and fibreglass reinforcement of duty-paid marble slabs amounts to manufacture and gives rise to fresh excise duty liability.

Analysis: The processes applied to the marble slabs did not bring into existence a new and distinct commercial commodity. The essential character of the goods remained marble slabs, and the earlier decisions holding that cutting, sizing and polishing of marble blocks or slabs did not amount to manufacture were treated as applicable. The applicable tariff and the definition of manufacture did not specify these processes as amounting to manufacture in relation to marble slabs.

Conclusion: The processes did not amount to manufacture, and the cleared marble slabs were not exigible to fresh duty.

Issue (ii): Whether the demand on marble tiles for the period from 9 August 1996 onwards is barred by limitation.

Analysis: The correspondence exchanged with the department had a bearing on departmental knowledge of the activity and the extent of power used. Since the factual position regarding disclosure, knowledge, and the bearing of the letters on limitation required re-examination, the question was not finally decided on merits in the remand order and was sent back for reconsideration by the adjudicating authority.

Conclusion: The limitation issue for the period from 9 August 1996 onwards was remanded for re-examination.

Issue (iii): Whether the composite penalty requires interference.

Analysis: The penalty question was linked to the reassessment of the surviving duty demand and the other remanded issues. In the final majority disposition, the penalty aspect was not finally sustained and was sent back for reconsideration in the light of the findings on duty, limitation, and related reliefs.

Conclusion: The penalty issue was remanded to the adjudicating authority.

Final Conclusion: Relief was granted on the manufacture issue concerning marble slabs, while the connected questions on limitation and penalty were left open for reconsideration by the adjudicating authority.

Ratio Decidendi: Manufacture under excise law requires emergence of a new and distinct commercially marketable commodity; absent such transformation, duty cannot be levied on the processed goods as a fresh excisable product.

---