JAIN, J. - (1.) THIS writ petition has been filed for quashing the show cause notice dated October 14, 1991 (Annexure- 5) and demand notice dated October 25, 1991 (Annexure-7), for declaring that Item No. 2504 of Chapter 25 of the Schedule appended to the Central Excise Tariff Act, 1985 (In short 'act of 1985') is ultra vires of the charging Section 3 read with Section 2 (f) of the Central Excise and Salt Act, 1944 (In short 'act of 1944') and for holding that preparation of agglomerated marble slabs/tiles do not involve manufacturing process and no excise duty is leviable on them and, in the alternative, for holding that agglomerated marble slabs and tiles are exigible to excise duty under Item No. 2504. 21 and 2504. 31 and not under Item No. 68. 04 of the said Schedule.
(2.) THE case of the petitioner is thus. It is engaged in the business of manufacturing marble agglomerated slabs/tiles. THEy are made from lumps/chips of naturally excavated marble which are purchased from market. THEy are crushed and pigments and binding agents are mixed with it. THE mixture is poured into moulds. THEreafter, pressure is applied to the mixture and it is subjected to vacuum vibral process. Marble agglomerated blocks are formed and therefrom slabs are prepared by sawing them. THE slabs are trimmed, polished and finally cut into slabs/tiles of the required sizes. Marble agglomerated blocks contain more than 90% natural marble and 6 to 8% pigments and binding agents. THEy have all the characteristic qualities of natural marble. THEre is no difference in between marble slabs and tiles obtained from excavated marble blocks and marble slabs and tiles obtained from agglomerated marble blocks, except that the latter contains pigments and binding agents. According to section 3 of the Act of 1944, duty of excise is on manufacture and production of goods specified in the Schedule to the Act of 1985. No duty is exigible where process of manufacture is not involved in the making of goods. Manufacture must bring into existence a new commercial commodity having distinct name, characteristics and use. Making of slabs/tiles from agglomerated marble blocks does not involve any process of manufacturing. Marble blocks, slabs and tiles have been specifically classified under heading 25. 04 of the Schedule appended to the Act of 1985. No extended definition has been given in the Notes of Chapter 25 of the said schedule. Despite this, the Central Excise Authorities insisted upon the petitioner to obtain Central Excise Licence and also to submit classification list. Classification List was submitted, classifying the said products under sub-heading 2504. 90 and claimed exemption from duty under Notification No. 16/90/ce dated October 20,1990. THE Superintendent, Central Excise, Range II, Udaipur (respondent no. 40 directed the petitioner to submit revised classification list- classifying marble slabs and tiles under heading 2504,21 and 2504. 31 respectively. THE petitioner did so under protest but it was not formally approved by the Assistant Collector. On the instructions of the Collector, Central Excise (respondent no. 2), the Assistant Collector (respondent no. 3) issued notices Annexure 5 to the petitioner to show cause as to why its product may not be classified under heading 68. 07 of the Act of 1985 relying upon Explanatory Note given under Chapter 68 of HSN. THEreafter, demand cum show cause notice Annexure 7 was issued; Reply was filed, seriously opposing the said notices. M/s Kedia Agglomerated Marble Ltd. , Halol (Gujrat) is the only other factory engaged in making similar marble agglomerated slabs/tiles. THE Assistant Collector approved their classification under heading 2504. 21 and 2504. 31. Reasonable opportunity of hearing is not being given by the Central Excise Authorities. THE petitioner has no alternative but to approach this Court under Article 226 of the Constitution of India. In their reply, the respondents have taken two preliminary objections, namely, that the petitioner has alternate remedy and disputed questions of fact are involved. They have averred that manufacturing process is involved in the preparation of agglomerated marble blocks from the marble chips and lumps and also in sawing the agglomerated marble blocks for obtaining agglomerated marble slabs and tiles. The petitioner's products are distinct from marble slabs and tiles. Their properties are different. Addition of pigments and binders differentiate its product from the natural marble. The petitioner's product is a new commercial commodity. The Collector, Central Excise did not issue any instructions Demand, notice Annexure 7 was served to save limitation. Reasonable opportunity of hearing was duly given to; the petitioner. Arguments of the learned counsel for the parties have been heard and their written arguments have been perused. Taxable event under the Act of 1944 is manufacture. The question for consideration is whether the aforesaid processes amount to manufacture? The definition of the word 'manufacture' given in Section 2 (f) of the Act of 1944 is inclusive in nature. It itself does not give the meaning of "manufacture. " It may be mentioned here that in the Notes given in Chapter, 25 of the Schedule of the Act of 1985 extended meaning of manufacture has not been given as has been given in other chapters namely, 13, 24, 33 and 52. As such amendment made in Section 2 (0 of the Act of 1944 by Act No. 5 of 1986 has not changed the position. Mere change is insufficient. A new and different product should emerge having distinctive name, character and use. There must be transformation and there should be loss of original identity. The fact that the produce has undergone a degree of processing is irrelevant if the original commodity continues to possess its original identity. It has been observed in Collector of Central Excise, Madras vs. Kurry Flush Doors and Furniture Co. (P) Ltd. , (1) para 4 & 5 as follows : - "it is well-settled that excise-duty becomes chargeable only when a new and different article merges having a distinct name, character and use. See in this connection the observations of this Court in Union of India vs. Delhi Cloth & General Mills-1977 (l) ELT (J. 199)= 1963 (1) Suppl. SCR 586 and south Bihar Sugar Mills Ltd. etc. v. Union India and Ors. 1978 (2) ELT (J. 336) = 1968 3 SCR 21. This principle is well settled. This is a question of facts depending upon the relevant material whether as a result of activity, a new and different article emerges having a distinct name, character and use. The use of expression 'manufacture' was explained in the case of Allenburry Engineers Pvt. Ltd. vs. Ramakrishna Dalmia and others-1973 2 SCR 257. In state of Orissa & Others vs. The Titaghur Paper Mills Co. Ltd. and Another (1985 3 SCR 26) which was a decision on the Orissa Sales Tax Act, this question was considered in the back ground of the fact whether planks, cut into sizes, etc. , sawed out of logs, are different from logs in its nascent state. 5. It may be worthwhile to note that 'manufacture' implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something more was necessary and there must be transformation; a new and different article must emerge having a distinct name, character or use. See Union of India vs. Delhi Cloth Mills (supra) at page 5% of the report. Having regard to the facts found in this case by the Tribunal, which ultimately is the final fact finding authority, we are of the opinion that regard being had to the principles for determining the questions which were correctly applied in the decision of the Tribunal, in the facts of this case, the conclusion of the Tribunal is unassailable. "
(3.) IN Deputy Commissioner of Sales Tax vs. Pio Food Packer (2), it has been observed as under: - "referring to Anheuser Busch Brewing Association v. United States (52 L. Ed. 336, 338) the Court said: "manufacture implies a change, but every change is note manufacture and yet every change in an article is the result of treatment, labour and manipulation. But something more is necessary. . . . . . . . . . . . . . . . . . There must be transformation; a new and different article must emerge, "having a distinctive name, character or use. " And further: "at some point processing and manufacturing will merge. But where the commodity retains a continuing substantial identity through the processing stage we cannot say that it has been "manufactured. " Now, the question is whether marble agglomerated block is a new product. It is not in dispute that preparation of agglomerated marble blocks involve the following processes: - 1. Crushing of lumps/chips of marble, 2. Mixing of pigments and binding agents i. e. Polyester, resin, white cement etc. (6% to 8%) with crushed marble (over 90%) 3. Pouring the mixture in the moulds; and 4. Application of pressure. The petitioner has stated in para no. 4 of its rejoinder that the properties and characteristics of agglomerated marble remains the same as that of excavated marble, it remains as marble even after agglomeration process and all the characteristics of a marble as given in para no. 5 of the writ petition are present in the product of the petitioner. In their reply to these averments, the respondents have stated as follows: - "that as regards para 4 of the rejoinder it is respectfully submitted that the fact that the characteristics of marble contained in the product manufactured by the petitioner is not denied but the product contains other substances also besides marble, therefore, it cannot be equated with the natural marble because of the process of manufacturing deployed by the petitioner firm. " Rule 2 (b) of the Rules for interpretation of Excise Tariff runs as under:- " (b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles contained in Rule 3. " ;