2006 (10) TMI 62 - AT - Central Excise

Cutting Marble Blocks into Tiles Not Manufacturing: CESTAT Delhi Upholds Decision

The Appellate Tribunal CESTAT, New Delhi, dismissed the Revenue's appeal, affirming that sawing Marble Blocks into slabs and Marble Tiles did not amount ... Manufacture – Revenue contended that the appellant activity of sawing of marble blocks into slabs and marble tiles are amount to manufacture – Comissioner(Appeal)rejecting the revenue contention Issues:Whether sawing of Marble Blocks into slabs and Marble Tiles amounts to manufacture or not.Analysis:The issue before the Appellate Tribunal CESTAT, New Delhi pertained to the period 1999-2001 and revolved around determining whether the process of sawing Marble Blocks into slabs and Marble Tiles constituted manufacturing. The Commissioner (Appeals) in Jaipur had relied on the Supreme Court's decision in a previous case to support the argument that cutting and polishing stones into slabs did not amount to a manufacturing process as the end product retained its original identity as stone. The Revenue, aggrieved by the Commissioner's decision, filed an appeal, contending that the issue in the present case involved clandestine removal of Marble tiles produced from Marble Slabs, for which duty had not been paid. The Revenue argued that the excisability of Marble tiles was not in dispute, and duty should be demanded on the tiles rather than the slabs. The Department's representative explained the manufacturing process, highlighting the steps involved in obtaining slabs of marble through cutting machines. The slabs were then cut into desired sizes ranging from 6'x 6' to 2'x 2'. It was clarified that only cutting, not polishing, was done at the manufacturing premises of the respondents.The Counsel for the respondents supported the Commissioner's decision and referenced not only the Supreme Court's ruling but also a decision by the Rajasthan High Court in a similar case. The Rajasthan High Court had quashed notices asserting that cutting granite blocks into slabs and tiles, along with polishing, did not constitute a manufacturing process. After considering the arguments from both sides and reviewing the case record, the Appellate Tribunal found no merit in the Revenue's appeal. Consequently, the appeal was dismissed, affirming that the process of sawing Marble Blocks into slabs and Marble Tiles did not amount to manufacturing, in line with the precedents cited during the proceedings.