Granite cutting not manufacturing for excise duty

The court held that cutting and polishing of granite slabs and tiles does not amount to manufacturing subject to excise duty under the Central Excise Act, 1944. The dismissal of Special Leave Petition (SLP) in a previous case did not establish a binding precedent, and the court followed the decision in the Aman Marbles case, which determined that such processes do not constitute manufacturing. As a result, the court allowed the writ petitions, quashing the notices and aligning with the interpretation in the Aman Marbles case.

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Issues: Whether cutting and polishing of granite slabs and tiles amount to manufacture subject to excise duty under the Central Excise Act, 1944.

Analysis:
In the writ petitions, the common issue raised was whether the cutting and polishing of granite slabs and tiles from the block constitute manufacturing, making the end product liable for excise duty. The petitioners argued that this process does not amount to manufacturing, citing the decision in Aman Marbles case. However, the Revenue contended that the dismissal of SLP in Pratap Singh's case by the Supreme Court implied a different interpretation. It was noted that the dismissal of SLP alone does not establish a precedent without a speaking order laying down the decision's ratio. The court emphasized that the dismissal of SLP does not result in the merger of the lower court's order, and the final decision remains with the lower court or tribunal. Therefore, the dismissal of SLP in Pratap Singh's case could not override the reasoned decision in Aman Marble's case, which held that cutting and polishing of granite did not amount to manufacturing. The court also referred to its previous order in similar circumstances, where show cause notices were set aside following the Aman Marble case decision. Consequently, the court allowed the writ petitions and quashed the impugned notices in all cases, aligning with the Aman Marble case's interpretation.

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