TaxTMI 
TaxTMI 
2012 (10) TMI 734
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.... correctly classifiable under CETH 38249090 and the Central Excise duty amounting to Rs.1,47,68,978/- along with interest has been confirmed and penalty equal to the duty demand has been imposed under Section 11AC of Central Excise Act, 1944. 2. Heard both sides. 3. Ld.Advocate appearing on behalf of the appellant submitted a synopsis of the submissions made by him which is reproduced as under: 1. That the impugned order has confirmed the duty demand on marble powder (originally classified by the Appellant under CETH 2517 4100(marble powder), attracting NIL rate of duty), by wrongly classifying the same under CETH 3824 9090(miscellaneous chemicals), which otherwise attracts Central Excise duty. 2. That the Appellant is engaged in the activity of grinding/pulverizing of mineral rocks into mineral powder, of various micron sizes. Such powder is sold in the market, under different product name, based on its micronized mesh size. That for the purpose of the present case, is it is true that at the time of pulverizing/grinding of marble chips the Appellant was mixing approx. 1% marble powder in the grinding/pulverizing process, which is done to avoid lump....
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....ession except where the context otherwise requires and held that the calcined china clay manufactured by the Appellant will not be outside the purview of Chapter 25 merely because the same was calcined. It is submitted that in the present case, quite interestingly, marble chips and calcite powder have identical chemical composition. That after mixing the calcite powder in the course of crushing, the end product too has the same identical composition. This is practically like mixing water to melting ice and the end product obtained, i.e. water, cannot be said to be different from its raw materials or classifiable elsewhere. That the process in question merely changes the physical form of the product, i.e. marble chips converted into marble powder, while the chemical composition of the product remains the same. This is so even when calcite powder is added in the course of crushing. We reiterate the calcite power is not different from marble powder and this does not amount to adding two different minerals together at all. That under identical circumstances, the Board has issued the Circular No.556/52/2000-CX dt.30.3.2000, wherein, Micronized Zircon Sand obtained after sim....
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....ie cannot be relied upon (export opinion at appeal petition page 123). Chapter Note 3 to Chapter 25 specifically states that Any products classifiable in heading 2517 and any other heading of this chapter are to be classified in heading 2517. That thus, calcite, assuming but not admitting to be different from marble per se, at the same time being nothing but powdered marble, which also merits classification under Chapter Heading 2517 itself. For this reason also, adding calcite while crushing marble chips is nothing but adding product of CH 2517 to 2517 and as such, does not attract any mischief which can classify the final powder into residual Chapter 38. This is further buttressed by the fact that in the Chemical examiner s reports, the composition of raw material (marble chips as well as calcite powder) as also mixed powder (finished product) is the same, meaning thereby that it is one and the same, i.e. marble powder only. The Chemical Examiner also nowhere states that calcite powder(raw material) and finished powder is different, in so far as the chemical and physical property thereof is concerned. That the Appellant s request to cross-examine the....
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....) Andhra Cement v/s. CCE 2005 (188) ELT 179 d) CCE V/s. Tara Agencies 2007 (214) E.L.T. 491 (S.C.) That the present case stands on a better footing, inasmuch as it is only mixing the very same mineral while crushing in the present case. That in the case of the appellant the name, character and the use of the final product continues to remain the same as that of the raw material. Moreover, there is no change in either the physical properties or the chemical properties of the product after mixing. Further, crushing of rocks to pulverize / obtain mineral powder also does not amount to manufacture, as is the consistent judicial stand. That we crave leave to refer to and rely upon the following decisions in this regard: a) DDST V/s. Bheraghat Mineral Indus. 2000 (119) E.L.T. 271 (S.C.) b) Collector v. Mahavir Minerals Store Supply Co. 1999 (113) E.L.T. A117 (S.C) c) CCE, Madras V/s. Coimbatore Pioneer Fertilizer Ltd. 1997 (94) E.L.T. 6 (S.C.) E. HSN explanatory note relied upon to state mixture of natural products falls under Chapter 3824. Defense: That this was the sole basis in the SCN to demand duty and all othe....
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....er 38 over Chapter 25. While it may be true that HSN may be a safe guide for deciding classification, the Hon ble Supreme Court in the case of Camlin Ltd. v/s CCE 2008 (230) ELT 193 (SC) held that when entries in HSN and the Central Excise Tariff are not aligned, reliance cannot be placed on HSN for purpose of classification. That the above decisions also clearly state that it is for the revenue department to prove that the classification of the product is under a particular heading, a residual one in the present case, and not for the Appellant to prove otherwise. F. The plea of demand being barred by limitation is brushed aside stating that the process was never disclosed to the department and under self-assessment scheme, it is the appellant s responsibility to correctly assess duty liability. Defense: The Appellant had earlier sought for Central Excise registration and later surrendered the same, at which time the manufacturing process was disclosed to the department. The impugned order itself categorically states that the Appellant classified goods as per their understanding and not as per the provisions of CETA, 1985. That as seen from t....
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....up the issues under consideration as identified and defended by the appellant in the synopsis reproduced above for convenience. 6. The first point is that the product has been obtained by mixing two separate minerals and therefore it is out of the purview of Chapter 25. The Commissioner has taken a view that addition of calcite purchased from the local market while grinding amounts to mixing of two separate minerals. Note 1 to Chapter 25 reads as under: Except where their context or Note 4 to this Chapter otherwise requires, the headings of this Chapter cover only products which are in the crude state or which have been washed (even with chemical substances eliminating the impurities without changing the structure of the product), crushed, ground, powdered, levigated, sifted, screened, concentrated by flotation, magnetic separation or other mechanical or physical processes (except crystallization), but not products that have been roasted, calcined, obtained by mixing or subjected to processing beyond that mentioned in each heading. 7. The question here is whether the mixing of the calcite by the appellant amounts to mixing of two minerals as held by the ld. C....
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....nary also says that it is an essential ingredient of marble. In the dictionary, Calcium carbonate is shown as occurring in nature in different forms. One of them is marble. He submits that this would show that even if the Department s contention that the Calcite powder was purchased and added, it would still amount to adding the same product and ground. 9. He would also draw our attention to the decision of the Tribunal in their own case as reported in 2006 (199) ELT 41 (Tri-Mumbai), wherein it was held that Calcinied China Clay would remain classified under heading 2505 manufactured by them. He also relied upon the decision of Hon ble Apex Court in the case of H.P.L. Chemicals Ltd 2006 (197) ELT 323 (SC), wherein it was held that on the basis of predominance of minerals if the product was falling under CETH 25, it has to be preferred to residual Chapter 38. It was submitted that while the Chapter 25174100 cover the powder of stone of heading 2515 or 2516 and heading 2515 specifically mentions the marble, proposed classification by the Revenue does not mention the product manufactured by the appellant. In this connection, he submits that the description of the product fal....