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

2. The appellant-Company is engaged in manufacture of flooring cement tiles using cement, sand, blue metal and gravel along with pigment. These are in the form of tiles used for constructing the floor itself or the wall, as the case may be.3. The appellant-Company filed classification list claiming the benefit of Notification No. 59/90-CE on the ground that the cement tiles in question are not floor coverings in rolls or in the form of tiles as per the description against serial No. 4 of sub-heading 6807.00 of the Table annexed with the Notification. The Superintendent of Central Excise, Range-IXA, Madras, IX Division, issued a show-cause notice dated 6th November, 1992 to the appellant-Company (hereinafter referred to as the "assessee-Company") directing it to pay the excise duty on the cement tiles as the said goods are not eligible to avail the benefit of the Exemption Notification No. 59/90-CE. The assessee-Company in its reply submitted that cement tiles manufactured by them are used to construct the floor itself and it is not floor coverings in terms of the description of the goods under sub-heading 6807.00. The Assistant Collector of Central Excise, Madras, IX Division - the adjudicating authority, on careful examination of the records and the submissions made before it by both the parties and after taking into consideration the Section Notes / Chapter Notes of Chapters 39, 57, 59 and 68, felt it necessary to conduct an on-the-spot study since the issue for adjudication was in regard to the product classification. The adjudicating authority accordingly visited the factory premises of the assessee-Company and studied the manufacturing process of cement tiles. Finally, the adjudicating authority came to the conclusion that cement tiles manufactured by the assessee-Company are covered under sub-heading 6807.00 as such the benefit of exemption Notification No. 59/90 dated 20th March, 1994 is available to the Company.4. The Revenue preferred an appeal against the said order of the adjudicating authority before the Collector (Appeals). The First Appellate Authority confirmed the order of the adjudicating authority holding that the cement tiles manufactured by the assessee-Company are not floor coverings and the benefit of the Notification has been rightly extended to the Company.5. Being aggrieved against the order of the appellate authority, the Revenue filed an appeal before the CEGAT. The Member (Technical) of the CEGAT has found no infirmity or perversity in the said order and dismissed the appeal of the Revenue, but the second Member (Judicial) has recorded separate order differing with the order of Member (Technical) and set aside the order of the appellate authority.6. The matter came to be referred to the third Member for solving the difference of opinion between the Members of the Bench. The third Member (Technical) agreed with the views expressed by Member (Judicial) and accordingly the appeal filed by the Revenue was accepted and the benefit of concession of the the excise duty was denied to the assessee--Company. Hence, the assessee-Company has filed this appeal before this Court challenging the correctness and validity of the order of the CEGAT.

Court's reasoning:
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.