Excise liability and marble sawing: appellate authority may examine excisability, and rough marble slabs are not treated as manufacture.

Where the existence of excise liability is disputed, the appellate authority may examine excisability even if the point was not expressly decided by the lower authority, because that issue is integral to the exemption claim. Sawing rough marble blocks into rough marble slabs was treated as not amounting to manufacture attracting central excise duty, following prior Tribunal and Supreme Court authority, and therefore the activity did not justify denial of exemption under Notification No. 105/80 dated 19-6-1980. The appellate order granting relief to the assessee was upheld and the revenue appeal failed.

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Issues: (i) whether the Collector (Appeals) lacked jurisdiction in examining the excisability of sawing rough marble blocks into rough marble slabs; and (ii) whether sawing rough marble blocks into rough marble slabs amounts to manufacture so as to attract central excise duty and deny exemption under Notification No. 105/80 dated 19-6-1980.

Issue (i): whether the Collector (Appeals) lacked jurisdiction in examining the excisability of sawing rough marble blocks into rough marble slabs.

Analysis: Once the respondents had raised the question of excisability before the appellate authority, the issue necessarily had to be examined because the applicability of the exemption notification depended on the existence of excise liability. The appellate authority was therefore entitled to consider the question even if it had not been specifically decided by the Assistant Collector.

Conclusion: The Collector (Appeals) did not exceed jurisdiction.

Issue (ii): whether sawing rough marble blocks into rough marble slabs amounts to manufacture so as to attract central excise duty and deny exemption under Notification No. 105/80 dated 19-6-1980.

Analysis: The question was treated as settled by the Tribunal's earlier decision holding that sawing marble blocks into marble slabs does not create a liability to central excise duty, and that view had been upheld by the Supreme Court. On that basis, the process was not treated as attracting duty for the purpose of the exemption dispute.

Conclusion: Sawing rough marble blocks into rough marble slabs does not attract excise duty for the purpose of denying the exemption.

Final Conclusion: The appellate order granting relief to the respondents was upheld and the revenue appeal failed.

Ratio Decidendi: Where the very existence of excise liability is in dispute, the appellate authority may examine excisability even if that point was not expressly decided below, and sawing rough marble blocks into rough marble slabs is not manufacture attracting central excise duty.

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