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Aman Marble Industries (P) Ltd. v. Collector Of Central Excise, Jaipur .
Factual and Procedural Background
This appeal concerned whether the appellant’s activity of cutting marble blocks into marble slabs constitutes “manufacture” for the purposes of liability under the Central Excise Act. The Tribunal, by a majority, held that the commodity fell within Entry 25.04 of the Tariff, but remitted the matter to the assessing authority to examine certain factual aspects. The appellant challenged the Tribunal’s order in this appeal.
Legal Issues Presented
- Whether the cutting of marble blocks into marble slabs amounts to “manufacture” for the purposes of the Central Excise Act.
Arguments of the Parties
Appellant's Arguments
- The activity does not amount to manufacture.
- Cutting blocks into slabs involves only sawing and does not create a distinct commodity.
- Even after cutting, the product remains marble; no new substance comes into existence, so the activity should not attract tax.
Department's Arguments
- The activity has been specifically brought into the tariff item.
- When processes are applied to make a commodity marketable, it amounts to manufacture and attracts tax under the Central Excise Act.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Rajasthan SEB v. Associated Stone Industries (2000) 6 SCC 141, JT (2000) 6 SC 522 | In the absence of a statutory definition, “manufacture” generally means bringing into existence a new and different article with a distinctive name, character, or use after transformation; cutting and polishing stone into slabs is not manufacture because no new distinct commercial product emerges and the end product remains stone. | Treated as directly governing: the Court applied the stated test to marble cutting and concluded that cutting marble blocks into slabs does not result in a new product and therefore is not “manufacture.” |
Court's Reasoning and Analysis
The Court relied on its earlier decision in Rajasthan SEB v. Associated Stone Industries, which articulated that, in ordinary parlance and absent a definition in the Act, “manufacture” requires the emergence of a new and different article with a distinctive name, character, or use. That decision specifically held that excavation followed by cutting and polishing stones into slabs did not amount to manufacture because the end product continued to be stone and no distinct commercial product came into existence. Applying that principle, the Court held that the appellant’s activity of cutting marble blocks into slabs similarly did not create a new product and therefore did not constitute manufacture under the Central Excise Act.
Holding and Implications
ALLOWED: The Court held that cutting marble blocks into marble slabs does not amount to manufacture. The Tribunal’s order was set aside and the appeal was allowed.
The direct effect is that, on the Court’s finding, the appellant’s activity is not treated as “manufacture” for purposes of Central Excise liability in this matter, and the Tribunal’s remand/approach was overturned. The opinion applies the cited precedent; it does not indicate that any new legal principle was created beyond that application.
Order
1. Question that arises for consideration in this appeal is one whether the cutting of marble blocks into marble slabs amounts to manufacture for the purpose of the Central Excise Act. The Tribunal by a majority decision took the view that the commodity in question falls within Entry 25.04 of the Tariff but to examine certain aspects on facts remitted the matter to the assessing authority.
2. The contention put forth on behalf of the appellant is that the activity carried on by the appellant does not amount to manufacture at all. The case put forth by the learned counsel appearing on behalf of the appellant is that the cutting of blocks into marble slabs involves only sawing of the marble blocks and thereby does not bring into existence a distinct commodity so as to state that when such activity is completed a new substance has come into existence. The submission is that even after such activity is completed the marble will remain marble and, therefore, this activity does not attract tax.
3. Learned counsel for the Department, however, submitted that the activity has been specifically brought into tariff item and when certain processes are applied to a commodity to make it marketable, it certainly amounts to manufacture and thereof attracts tax under the Central Excise Act.
4. In Rajasthan SEB v. Associated Stone Industries (2000) 6 SCC 141, JT (2000) 6 SC 522 such a question fell for consideration before this Court although in a different context, and this Court held as follows:
“This apart, excavation of stones from a mine and thereafter cutting them and polishing them into slabs did not amount to manufacture of goods. The word ‘manufacture’ generally and in the ordinary parlance in the absence of its definition in the Act should be understood to mean bringing to existence a new and different article having a distinctive name, character or use after undergoing some transformation. When no new product as such comes into existence, there is no process of manufacture. Cutting and polishing stones into slabs is not a process of manufacture for the obvious and simple reason that no new and distinct commercial product came into existence as the end product still remained stone and thus its original identity continued.”
and this position was further reiterated as follows:
“It is also not possible to accept that excavation of stones and thereafter cutting and polishing them into slabs resulted in any manufacture of goods.”
5. In the light of this decision we have no hesitation in holding that the activity carried on by the appellant does not amount to manufacture. We set aside the order passed by the Tribunal and allow this appeal.
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