Supreme Court reverses excise duty ruling on marble blocks, orders fair assessment process

The Supreme Court allowed the appeal, setting aside the High Court's judgment that agglomerated marble blocks were not subject to excise duty. It was determined that the comparison of properties between agglomerated and excavated marble should be left to fact-finding authorities. The excise authorities were directed to cancel the assessment order and provide the respondents with a fair hearing before issuing a new assessment order. The respondents were given the opportunity to challenge the new assessment order with no reference to previous judgments.

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Issues involved: Manufacturing process of marble agglomerated blocks, excise duty liability, properties of agglomerated marble compared to excavated marble.

Manufacturing Process and Excise Duty Liability: The respondents manufacture marble agglomerated blocks using a process involving crushing marble, mixing pigments and binding agents, pouring the mixture into moulds, and applying pressure. The issue was whether agglomerated marble should be subject to excise duty under Tariff Heading 68.07. The High Court allowed a Writ Petition stating that the product was not liable for excise duty. The Supreme Court found that the question of whether the properties of agglomerated marble differ from excavated marble is a question of fact best left to the fact-finding authorities. The High Court should not have interfered at the show cause notice stage.

Assessment Order and Opportunity of Hearing: The excise authorities were permitted to proceed with the assessment but not enforce it without permission. An assessment order was passed without giving the respondents a hearing, leading to a dispute. The Supreme Court directed the cancellation of the assessment order and instructed the Assistant Collector to provide the respondents with a hearing before passing a fresh assessment order. The respondents were given the opportunity to challenge the new assessment order and present any evidence they deemed fit. The Assistant Collector was directed to pass the assessment order without reference to the High Court judgment or previous orders.

Conclusion: The appeal was allowed, setting aside the High Court's judgment and order without any costs imposed. The respondents were directed to appear before the Assistant Collector for a fresh assessment, ensuring a fair opportunity for a hearing and consideration of evidence.

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