IMPORTANT POINT
The appellant is entitled to benefit of exemption notification for "Mosaic tiles" for his brands "Marbella Agglomerated Marbels" and Marbellam Tiles".

Headnote:Central Excise Act, 1985-Section 5-A(1)-Exemption notification exempting "Mosaic Tiles" including in tariff heading 68.07-Appellant manufacturing tiles under the trade names Marbella Agglomerated Marbles" and "Marbellam Tiles" denied exemption by the Tribunal on the ground that Appellant is marketing its manufactured tiles in its different trade names and not as "Mosaic Tiles"-Appeal to Supreme Court-Whether Tribunal was right? (No)-Appeal allowed.
Held : After hearing learned counsel appearing for the parties we find that the tribunal has clearly gone wrong in rejecting the claim of the appellant for the benefit of the exemption notification on the sole ground that it is marketing its product not in the name of mosaic tile but in the trade name of Marbella Agglomerated Marbles and Marbellam Tiles. The appellant had produced before the authorities evidence and material to show that both technically and commercially its Tiles are known as "Mosaic Tiles" or Marble Mosaic Tiles. No negative material was produced in rebuttal by the department. So far as the trade name given to the product is concerned - the appellant had explained that it was so marketed to distinguish it from ordinary Mosaic Tiles in which there is no use of marble chips and marble stones. There was no justifiable reason for the tribunal to reject this explanation. A typical trade name to the product could be given by the appellant to distinguish it in the market from ordinary Mosaic Tiles made from stones other than stones or chips of marbles. The primary object of classifying products in fiscal statute like Central Excise act being for raising revenue, the settled rule of interpretation is that the various headings or sub-headings in the Tariff should be understood not in strict scientific and technical sense but in their popular sense i.e. the meaning assigned to them by those trading in and using the product (see Shree Baidyanath Ayurved Bhavan Ltd. vs. Collector of Central Excise, Nagpur: 1996(9) SCC 402 at para 3). The words "mosaic tiles", in the exemption notification are to be understood, thus, in their popular meaning. After the words "mosaic tiles , the addition of words "tiles known commercially as mosaic tiles", in the text of the exemption notification appears to be an over emphasis, with intention to assign meaning to the product in the sense in which it is understood by those dealing in and using the product. In our opinion, on a wholly irrelevant and unsubstantial ground the well reasoned orders of the lower authorities were upset by the Tribunal and benefit of exemption notification was wrongly denied to the appellant. The appellant before the authority has produced sufficient material to demonstrate that the tiles manufactured by it with use of marble chips and crushed stones of marble are also known in the market as mosaic tiles like other mosaic tiles in which stones or articles other than marble are used. Consequently, this appeal succeeds and is hereby allowed. The impugned order of the CEGAT dated 24-3-1995 is hereby set aside and the orders passed by the Assistant Collector of Central Excise dated 5-8-1991 and Collector of Central Excise (Appeals), Ahmedabad dated 21.6.1993 are restored. (Paras 17, 18, 19, 20 & 21)

JUDGMENT

Dharmadhikari, J.-The appellant M/s Kedia Agglomerated Marbles Limited is engaged in manufacture of floor tiles which are marketed by them in the trade name "Marbella Agglomerated Marbles" and "Marbellam Tiles". The product of the appellant is classified under tariff heading 68.07 for the purpose of excise duty under the Central Excise Tariff Act (for short the Act ). The above classification of the appellant s product under Tariff heading 68.07 has been confirmed by order dated 21.6.1993 passed by the Collector of Customs and Central Excise (Appeals), Ahmedabad.

2. On the basis of the aforesaid classification of its product under Tariff heading 68.07, appellant claimed exemption from payment of duty under Notification No. 59/91-CE dated 20-3-1990 issued by the Central Government in exercise of powers conferred by sub-section (1) of Section 5A of the Central Excise Act. Under the aforesaid exemption notification, mosaic tiles that is to say tiles known commercially as mosaic tiles included in Tariff heading 68.07 are exempt from payment of duty.

3. The appellant s case that the tiles manufactured by it are commercially known as mosaic tiles and are entitled to exemption was accepted by the Collector of Central Excise (Appeals) by order dated 21.6.93.

4. In the appeal preferred by the Department, Central Excise and Gold (Control) Appellate Tribunal [for short CEGAT ], however, upset the decision of the lower authorities by holding against the appellant that since it is marketing its manufactured tiles in its different trade names and not as mosaic tiles , it is not entitled to the benefit of exemption notification.

5. The only question raised in this appeal is whether the manufactured products of the appellant sold in the trade name of "Marbella Agglomerated Marble" and "Marbellam Tiles", are commercially known as "mosaic tiles" and are entitled to the benefit of exemption notification.

6. Before considering the material produced before the Central Excise Authorities by the appellant for claiming benefit of the exemption notification, it is necessary to examine the relevant Tariff heading and subheadings. Chapter 25 of the Tariff is under Section V with heading "Mineral Products" and subheading of the said Chapter is Salt, Sulphur, Clay and stone; plastering materials; lime and cement. Subheading "Marble" has entries 2504.10 to 2504.90 which are all products of marble like marbling blocks, marble in slabs and marble and tiles. The relevant entry 25.04 under sub-heading "Marble" reads as under:

"25.04 Marble

2504.10 - In block

- In slabs: Nil

2504.21 - In or in relation to the manu- Rs. 15 facture of which any process is per ordinarily carried on with the square aid of power and where the meter electromotive force used exceeds ten horse power

2504.29 - Other

- In tiles: Nil

2504.31 In or in relation to the manu- Rs.15 facture of which any process is per sq. ordinarily carried on with the meter aid of power and where the electromotive force used exceeds ten horse power

2504.39 - Other Nil

2504.90 - Other 10%

7. It is not disputed that the product manufactured by the appellant is neither block of marble nor marble in tile.

8. The appellant has explained the manufacturing process of its product thus:

MANUFACTURING PROCESS

The Marble/Dolomite lumps are procured from the mines situated at different places. The are crushed with the help of jaw-crusher and Hammer Mill in the factory whereby they are obtained in the form of chips. These chips are mixed either with the Cement or Resin ordinarily in the ratio of 90% Marble or Dolomits and 10% of Cement or 93% to 94% Marble or Dolomite and 6% to 7% of Resin. The colouring material is added wherever necessary. This mixture is

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2003 Supreme(SC) 27

IMPORTANT POINTThe appellant is entitled to benefit of exemption notification for "Mosaic tiles" for his brands "Marbella Agglomerated Marbels" and Marbellam Tiles".

Cases Referred (1)

IMPORTANT POINT
The appellant is entitled to benefit of exemption notification for "Mosaic tiles" for his brands "Marbella Agglomerated Marbels" and Marbellam Tiles".