Distinct commercial commodity test governs excise treatment of marble and granite products, with remand where evidence is incomplete.

For excise purposes, manufacture arises only when processing results in a distinct commercial commodity recognised separately in trade. Marble tiles made by cutting, edging, trimming and polishing marble blocks were treated as not excisable because the department did not show that they had a separate market identity from marble blocks or slabs. Granite tiles produced by similar processing were treated as excisable and classifiable under Item 68 because sawn and polished granite was regarded as a distinct marketable product under the applicable granite precedent. Excisability of marble and granite crazy and cladding materials could not be finally determined on the existing record and required fresh examination of the facts.

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Issues: (i) Whether marble tiles manufactured by cutting, edging, trimming and polishing marble blocks were excisable as a new product; (ii) whether granite tiles produced by similar processing were excisable and classifiable under Item 68 of the Central Excise Tariff; and (iii) whether the exigibility of marble/granite crazy and cladding materials could be determined on the existing record or required remand.

Issue (i): Whether marble tiles manufactured by cutting, edging, trimming and polishing marble blocks were excisable as a new product.

Analysis: The controlling principle applied was that manufacture requires emergence of a distinct commercial commodity having a separate identity in trade. Mere cutting of marble blocks into slabs, and even further processes that leave the product known in the market as marble, do not by themselves establish manufacture. The majority treated the earlier decision on marble as covering marble tiles also, and held that the department had not produced material to show that marble tiles were understood in commercial parlance as goods distinct from marble blocks or slabs.

Conclusion: Marble tiles were held to be non-excisable, in favour of the assessee.

Issue (ii): Whether granite tiles produced by similar processing were excisable and classifiable under Item 68 of the Central Excise Tariff.

Analysis: The majority distinguished the marble decisions and applied the earlier granite precedent, which treated polished granite slabs as excisable under Item 68. It was held that granite blocks, when sawn and further polished into slabs and tiles, emerge as distinct marketable products, and the earlier granite ruling directly governed the issue.

Conclusion: Granite tiles were held to be classifiable under Item 68 of the Central Excise Tariff, in favour of Revenue.

Issue (iii): Whether the exigibility of marble/granite crazy and cladding materials could be determined on the existing record or required remand.

Analysis: The record did not contain sufficient factual material on the exact nature of the crazy and cladding materials, the extent of processing, or whether they were independently bought and sold as goods. The majority held that, without such evidence, their excisability could not be finally determined and fresh examination was necessary.

Conclusion: The question of duty liability for marble/granite crazy and cladding materials was remanded for de novo consideration, leaving the issue open on the existing record.

Final Conclusion: The dispute was resolved by holding marble tiles outside excise levy, granite tiles within the tariff entry, and by remanding the remaining question concerning crazy and cladding materials for fresh decision on evidence.

Ratio Decidendi: Manufacture for excise purposes arises only when processing results in a distinct commercial commodity recognized separately in trade; where further factual inquiry is needed to determine whether the product is independently marketable, the issue must be decided on evidence.

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