Granite slab processing and excisability: tribunal required duty pre-deposit but granted relief from penalty pre-deposit.

Cutting granite blocks into slabs and polishing one side was not accepted, at the prima facie stage, as clearly non-excisable manufacture for waiver of pre-deposit, because the distinction between mere cutting-to-size and converting blocks into slabs with polishing was treated as material. The duty demand also arose from clearance by a 100% EOU to its sister concern in the domestic tariff area without permission and without duty payment. On that basis, pre-deposit of the demanded duty was directed, while waiver of pre-deposit and stay of recovery were granted for the penalty amount.

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Issues: Whether the activity of cutting granite blocks into slabs and polishing one side thereof was, prima facie, non-excisable manufacture for the purpose of waiver of pre-deposit; and whether pre-deposit of the demanded duty and stay of recovery of penalty were warranted.

Analysis: The order records that the duty demand arose on granite slabs cleared by a 100% EOU to its sister concern in the domestic tariff area without permission and without duty payment. The plea that the activity was not manufacture was not accepted at the prima facie stage, since the distinction between mere cutting-to-size and cutting blocks into slabs, coupled with polishing by using imported raw materials, was treated as material. On that basis, a strong prima facie case against the duty demand was not found, though relief was granted in respect of the penalty.

Outcome: Pre-deposit of the demanded duty was directed, while waiver of pre-deposit and stay of recovery were granted for the penalty amount.

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