Case: M/S. Indcon Structurals (P) Ltd Vs. Commnr. Of Central Excise, Chennai

it has acquired a definite trade and business understanding. The record shows that the adjudicating authority in its order has recorded categorical finding that in support of the claim, the assessee-Company has produced on record certificates of the well-known Architects or Engineers and Town Planners, Interior Design Engineers and Consultants and users to the effect that the cement tiles manufactured by the assessee-Company are totally different from floor coverings. Some samples pertaining to floor coverings and other products, including cement tiles, were produced by the assessee-Company as material evidence for comparative analysis before the adjudicating authority at the time of inspection of the factory premises. The adjudicating authority on such inspection had studied the process of manufacture of cement tiles and found that cement, sand, blue metal, gravel were mixed in pre-determined proposition along with pigments and then the mixture was poured into moulds, compacted and allowed to set automatically through vibration table. The adjudicating authority further noticed that the cement tiles were demoulded, cured, surface treated and are marketed in the brand name of Eurocon tiles. These tiles are capable of using for wall application of both external/ internal wall tiling, which form an integral part of the wall on which they are cemented. The adjudicating authority also studied the product in question with reference to its characteristics, temperature resistance, structural properties and durability. The authority has also perused Section Notes/ Chapter Notes of Chapters 39, 57, 59 and 68 dealing with the goods floor coverings and flooring materials. On going through the expressions given for the products, floor coverings / wall coverings under Chapter Headings 39, 57 and 59, which are made out of plastics, coir / textiles, the adjudicating authority has observed that floor coverings have got a distinct identity from the floor materials as the floor covering materials are totally different products which are commonly used as an additional coverage to an existing floor / wall, only for the purpose of beautification and decoration. The authority also observed that floor coverings are quite replaceable in nature since they are mechanically placed on the floor and could be reusable also, whereas the tiles such as mosaic / granite /cement tiles which are basically embedded to the floor is normally on lifetime basis and further that such tiles once laid on the floor are almost impossible to remove without breaking or causing damage to the floor itself. The major differences that exist between the floor materials and floor covering materials along with specifications maintained by ISI No. 1237/1980 for cement tiles and ISI No. 11206/1984 and ISI No. 809/92 for other floor covering materials would go to show that basically the specifications so maintained by ISI for cement tiles and for other floor covering materials are not akin in nature. On close examination of the entire material on record, the adjudicating authority has come to the definite conclusion that the cement tiles manufactured by the assessee-company are in no way akin to floor covering materials and these are covered within the nomenclature of floor tiles and, therefore, the assessee-Company is entitled to the benefit of Exemption Notification No. 59/90. 11. The appellate authority as noticed earlier has confirmed the order of the adjudicating authority and held that the cement tiles in question are not floor coverings and the benefit of the notification has been rightly extended to the assessee-Company. The Member (Technical) of the CEGAT has also come to the conclusion that the cement tiles in question are flooring materials and become constituent part of the floor or wall or stairways. These tiles cannot be termed as floor coverings. In support of his findings, the Member (Technical) has taken into consideration notes of the IS specifications and various certificates issued by the qualified Architects, Engineers, Valuers and Interor-Designers dealing in the said goods. The other two Members of the CEGAT, in our view, have failed to consider the nomenclature of the words and expressions "floor coverings in rolls or in the form of tiles" as used under sub-headings 6807.00 in the description of goods specified in Table annexed with the Exemption Notification. The majority Members in recording different view than the one taken by the adjudicating authority, the first appellate authority and the Member (Technical), CEGAT, have only observed that no restricted meaning could be given to the expression "floor-coverings" as to include only those items which could be just separate or placed on the floor and to put the items that are affixed to the floor to cover the same out of its purview. The second Member (Technical) in his separate order, supporting the order of the Member (Judicial), has mainly relied upon an earlier decision in Niraj Cement Structurals vs. Collector of Central Excise Mumbai (1998 (101) E.L.T. 284 (Tribunal). We have gone through the said decision of the Tribunal but, in our considered view, the same is of no assistance or help to the Revenue in peculiar facts and circumstances of the present case. In that case, the assessee was manufacturer of tiles covered by the same Notification No. 59/90-CE and description of the goods were also under the same sub-heading. In that case the product manufactured by the Company was used as floor coverings inasmuch as the titles were placed on the floor covering the cable running underneath the floor. Thus, the findings of the Tribunal in the Niraj Cement case (supra) cannot be uniformity applied to the products in question manufactured by the assessee-Company. 12. In the facts and circumstances narrated hereinabove, the noted contentions of the learned Additional Solicitor General do not merit acceptance. The objection of the Revenue that the cement tiles manufactured by the assessee-Company are covered under the expression "floor coverings in rolls or in the form of tiles" is misconceived. 13. We, therefore, hold that as per the trade understanding and usages, cement tiles, the subject-matter of the present case, is a form of floor itself and, therefore, entitled to the benefit of Exemption Notification No. 59/1990. 14.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 1

Reasoning from the judgment:
1[ds]The appellate authority as noticed earlier has confirmed the order of the adjudicating authority and held that the cement tiles in question are not floor coverings and the benefit of the notification has been rightly extended to the assessee-Company. The Member (Technical) of the CEGAT has also come to the conclusion that the cement tiles in question are flooring materials and become constituent part of the floor or wall or stairways. These tiles cannot be termed as floor coverings. In support of his findings, the Member (Technical) has taken into consideration notes of the IS specifications and various certificates issued by the qualified Architects, Engineers, Valuers and Interor-Designers dealing in the said goods. The other two Members of the CEGAT, in our view, have failed to consider the nomenclature of the words and expressions "floor coverings in rolls or in the form of tiles" as used under sub-headings 6807.00 in the description of goods specified in Table annexed with the Exemption Notification. The majority Members in recording different view than the one taken by the adjudicating authority, the first appellate authority and the Member (Technical), CEGAT, have only observed that no restricted meaning could be given to the expression "floor-coverings" as to include only those items which could be just separate or placed on the floor and to put the items that are affixed to the floor to cover the same out of its purview. The second Member (Technical) in his separate order, supporting the order of the Member (Judicial), has mainly relied upon an earlier decision in Niraj Cement Structurals vs. Collector of Central Excise Mumbai (1998 (101) E.L.T. 284 (Tribunal). We have gone through the said decision of the Tribunal but, in our considered view, the same is of no assistance or help to the Revenue in peculiar facts and circumstances of the present case. In that case, the assessee was manufacturer of tiles covered by the same Notification No. 59/90-CE and description of the goods were also under the same sub-heading. In that case the product manufactured by the Company was used as floor coverings inasmuch as the titles were placed on the floor covering the cable running underneath the floor. Thus, the findings of the Tribunal in the Niraj Cement case (supra) cannot be uniformity applied to the products in question manufactured by thethe facts and circumstances narrated hereinabove, the noted contentions of the learned Additional Solicitor General do not merit acceptance. The objection of the Revenue that the cement tiles manufactured by the assessee-Company are covered under the expression "floor coverings in rolls or in the form of tiles" istherefore, hold that as per the trade understanding and usages, cement tiles, the subject-matter of the present case, is a form of floor itself and, therefore, entitled to the benefit of Exemption Notification No. 59/1990.