1995 (7) TMI 185 - AT - Central Excise

Classification of Marble and Granite Tiles under CET Item 68, Remand for Reevaluation

The Tribunal concluded that marble tiles are non-excisable, while granite tiles are classifiable under Item 68 CET. The excisability of marble/granite ... Excisability of processed stone products - processes amounting to manufacture - identity test / commercial distinctness - classification under Item 68 Central Excise Tariff - treatment of waste, scrap and byproductsExcisability of processed stone products - processes amounting to manufacture - identity test / commercial distinctness - Marble tiles produced by cutting, edging, trimming and polishing of marble blocks/slabs are non-excisable - HELD THAT: - The Tribunal majority applied the ratio of Collector of Central Excise v. Fine Marble & Minerals (P) Ltd., as affirmed by the Supreme Court, holding that where the original identity of marble continues despite processing and no distinct commercial commodity emerges, the processes do not amount to manufacture. The earlier decisions (including Associated Stone Industries, which followed Fine Marble) were treated as directly applicable to marble slabs and tiles because in trade parlance these forms continue to be known as marble and the Department failed to produce material evidence showing that a commercially distinct product arises from the processes applied. The majority therefore concluded that marble tiles are non-excisable under the pre-17-3-1985 tariff regime. [Paras 5, 23, 27]Marble tiles are non-excisable.Classification under Item 68 Central Excise Tariff - processes amounting to manufacture - identity test / commercial distinctness - Polished/processed granite slabs and tiles are excisable and classifiable under Item 68 CET - HELD THAT: - The Tribunal considered the decision in Indian Granite Ltd. and the Headings/HSN distinction recognising that slabs merely sawn from blocks may remain quarry products, whereas slabs/tiles worked further by machining, polishing and similar operations become distinct commercial commodities. On the facts (admitted polishing and marketing of granite tiles/slabs), the processing went beyond mere sawing and produced a marketable article with different character and use; accordingly, polished granite slabs and tiles fall within Item 68 and are exigible to excise duty. [Paras 11, 16, 17, 24, 27]Granite tiles are classifiable under Item 68 CET and are excisable.Treatment of waste, scrap and byproducts - excisability of processed stone products - identity test / commercial distinctness - Exigibility of marble/granite crazy and cladding materials is to be determined afresh and is remanded - HELD THAT: - The Tribunal found insufficient material on record to determine whether the items described as crazy and cladding are non-excisable waste/by-products or distinct marketable goods. The authorities below had not established the nature, processing or market understanding of these items; accordingly the Tribunal held that the Department must produce evidence that such items are 'goods' bought and sold in the market. The matter was therefore remanded to the jurisdictional Assistant Commissioner for de novo consideration in accordance with law and after hearing the appellants. [Paras 18, 19, 25, 26, 27]Exigibility of marble/granite crazy and claddings to be determined afresh; matter remanded for de novo consideration.Final Conclusion: By majority the Tribunal held that marble tiles are non-excisable (following Fine Marble & Minerals and Associated Stone Industries), that polished/processed granite slabs and tiles are exigible and classifiable under Item 68 CET, and that the question whether marble/granite crazy and cladding materials are excisable is unanswered on the record and is remanded to the Assistant Commissioner for fresh adjudication. Issues Involved:1. Classification and excisability of marble/granite tiles.2. Classification of slabs worked beyond the normal quarry product stage.3. Excisability of marble/granite crazy and claddings.4. Appropriate relief or remand based on the above issues.Summary:1. Classification and Excisability of Marble/Granite Tiles:The appellants argued that cutting marble and granite blocks into slabs and tiles does not amount to manufacture, citing previous Tribunal and Supreme Court decisions. The Tribunal in the case of Fine Marble & Minerals Pvt. Ltd. held that marble slabs sawn from marble blocks were not manufactured goods as there was no transformation into a commercially distinct commodity. This view was upheld by the Supreme Court. The Tribunal in the case of Associated Stone Industries (Kotah) Ltd. v. Collector of Central Excise, Jaipur also concluded that cutting, edging, trimming, and polishing of marble blocks did not amount to manufacture. The Tribunal's decision in the case of Indian Granite Ltd. v. Collector of Central Excise, Hyderabad, which held that polished granite slabs were classifiable under T.I. 68, was distinguished by the Tribunal in the case of Associated Stone Industries.2. Classification of Slabs Worked Beyond Normal Quarry Product Stage:The Tribunal noted that slabs produced by mere sawing of blocks are not excisable. However, slabs worked beyond the stage of the normal quarry product, involving processes such as machining and polishing, would become excisable. The Tribunal referred to the Harmonized System of Nomenclature (HSN) which classifies worked stone under Heading 68.02.3. Excisability of Marble/Granite Crazy and Claddings:There was insufficient material on record to determine the excisability of marble/granite crazy and claddings. The Tribunal directed that this aspect be examined afresh with sufficient material to show that these items are 'goods' in their own right, bought and sold in the market.4. Appropriate Relief or Remand:The Tribunal, considering the majority opinion, held that marble tiles are non-excisable, granite tiles are classifiable under Item 68 CET, and the exigibility of marble/granite crazy and claddings is to be determined afresh. The case was remanded to the jurisdictional Assistant Commissioner of Central Excise for de novo consideration.Final Order:In view of the majority opinion, it is held that marble tiles are non-excisable; granite tiles are classifiable under Item 68 CET; and the exigibility of marble/granite crazy and claddings is to be determined afresh with sufficient material to show these are 'goods' in their own right, bought and sold in the market. The case is remanded to the jurisdictional Assistant Commissioner of Central Excise.