2010 (4) TMI 57 - SC - Central Excise

Supreme Court exempts 'Blown Grade Bitumen' conversion from excise duty, affirms Tribunal. 'Roof Felt' falls under Chapter Heading 59.09.

The Supreme Court held that the conversion of 'Straight Grade Bitumen' into 'Blown Grade Bitumen' through the blowing process does not amount to ... Manufacture - (i) Whether the conversion of ‘Straight Grade Bitumen’ into ‘Blown Grade Bitumen' amounts to manufacture or not; and (ii) Whether ‘Roof Felt’ is classifiable under Chapter sub-heading 5903.90 or 5907.90? – held that - the process of converting straight grade bitumen into blown grade bitumen through Oxidation, known as blowing process, does not amount to manufacture and therefore, exempted from payment of Excise duty - ‘Bitumenised Hessian based felt’ was classifiable under Chapter Heading 59.09 and the assessee would be entitled to exemption from payment of excise duty under Notification Nos. 53/65-C.E. and 92/94-C.E. dated 20th March1965, and 25th April, 1994 respectively. Issues:1. Whether the conversion of 'Straight Grade Bitumen' into 'Blown Grade Bitumen' amounts to manufacture.2. Whether 'Roof Felt' is classifiable under Chapter sub-heading 5903.90 or 5907.90.Analysis:1. The first issue pertains to the conversion of 'Straight Grade Bitumen' into 'Blown Grade Bitumen' and whether it amounts to manufacture. The Supreme Court relied on a circular issued by the Board in 1988 and a previous decision in Commissioner of Central Excise and Customs vs. Tikatar Industries. It was established that the process of converting bitumen through oxidation, known as the blowing process, does not amount to manufacture and is exempt from excise duty. The Court emphasized that the Revenue cannot take a stand contrary to its own circular. Consequently, the Tribunal's view was affirmed, and the appeal was dismissed.2. The second issue involves the classification of 'Roof Felt' under Chapter sub-heading 5903.90 or 5907.90. The Supreme Court referred to a previous case, C.C.E., Navi Mumbai vs. Amar Bitumen & Allied Products Pvt. Ltd., where it was held that 'Bitumenised Hessian based felt' falls under Chapter Heading 59.09. The assessee was deemed entitled to exemption from excise duty under specific notifications. In alignment with the previous decision, the Court affirmed the Tribunal's findings, ruling in favor of the assessee and against the Revenue. Consequently, the appeal was dismissed, with each party bearing their own costs.In conclusion, the Supreme Court, in this judgment, addressed the issues related to the manufacturing process of bitumen and the classification of Roof Felt under specific chapter sub-headings. The decisions were based on previous rulings and circulars, ultimately leading to the dismissal of the appeals in favor of the assessee.