Tariff classification and manufacture: tribunal found a prima facie case for interim relief in marble processing dispute.

For the period before 1-3-2005, a change from a six-digit to an eight-digit tariff did not by itself displace the earlier Supreme Court view on marble processing, because the statutory definition of manufacture and the relevant chapter notes had not changed. For the period after 1-3-2005, Chapter Note 6 to Chapter 25 created a deeming fiction treating the processes as manufacture, so the goods prima facie fell under Chapter 25 rather than Chapter 68. On that basis, the appellant established a prima facie case for interim relief against the duty demand, subject to a directed deposit for hearing of the appeal.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit in respect of the duty demand for the periods before and after 1-3-2005, and whether the disputed goods were classifiable under Chapter 25 or Chapter 68.

Analysis: For the period prior to 1-3-2005, the tribunal held that the earlier Supreme Court view on marble processing could not be distinguished merely on the basis of change from a six-digit to an eight-digit tariff, since the issue of manufacture remained unchanged in the absence of a corresponding change in the statutory definition or chapter notes. For the period after 1-3-2005, the tribunal noted that Chapter Note 6 to Chapter 25 created a deeming fiction treating the processes as manufacture, and in that setting the goods prima facie fell under Chapter 25 rather than Chapter 68. The notification relied upon by the appellant also prescribed the same duty rate for marble slabs irrespective of the chapter classification.

Conclusion: The appellant established a prima facie case for interim relief on the duty demand, and the tribunal directed a deposit of Rs. 25 lakhs for hearing of the appeal.

Final Conclusion: The matter was not finally decided on merits, and the appeal was allowed to proceed subject to the directed deposit.

Ratio Decidendi: A change in tariff classification alone does not displace an earlier finding on manufacture unless the statutory definition or chapter notes governing manufacture have also changed; where a deeming chapter note is introduced, it must be applied to determine the prima facie classification and relief.

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