Holding

The Tribunal erred; the tiles are commercially known as mosaic tiles and therefore qualify for exemption under the notification.

Summary

Kedia Agglomerated Marbles Ltd. manufactures floor tiles marketed under the trade names “Marbella Agglomerated Marble” and “Marbellam Tiles” and classifies them under tariff heading 68.07. Notification No. 59/91‑CE dated 20‑Mar‑1990 exempts “mosaic tiles, i.e., tiles known commercially as mosaic tiles” in that heading. The appellant claimed exemption; the Collector (Appeals) allowed it, but the Central Excise and Gold (Control) Appellate Tribunal (CEGAT) rejected the claim on the ground that the tiles were not marketed as “mosaic tiles”. The Supreme Court held that the tribunal erred, emphasizing that tariff headings must be interpreted in their popular sense and that the appellant had produced technical data and affidavits showing the tiles are commercially known as mosaic (or marble mosaic) tiles, with no rebuttal from the department. Consequently, the exemption applied. The appeal was allowed and the CEGAT order set aside, restoring the lower authorities’ orders.

Issues considered

Whether tiles marketed under the trade names “Marbella Agglomerated Marble” and “Marbellam Tiles” can be deemed “mosaic tiles” as used in the exemption notification.
Whether the term “mosaic tiles” in the notification should be interpreted in its popular commercial meaning rather than a strict technical sense.

Legislation cited

Subjects

Central Exciseexemptionmosaic tilestariff classificationpopular meaningstatutory interpretationtrade namecommercial name

Judgment

A KEDIA AGGLOMERATED MARBLES LTD.
v. -t
COLLECTOR OF CENTRAL EXCISE

JANUARY 14, 2003

B (M.B. SHAH AND D.M. DHARMADHIKARI, JJ.]

Central Excise Tariff Act, 1985-Tariff Heading 68.07-Claimant
manufacturing floor tiles-Marketing in trade name of 'Marbella Agglomerated
Marble' and 'Marbellam Tiles '-Claim for benefit ofexemption notification-
c Authorities allowing the claim, however Tribunal rejecting it since product
marketed in the trade name and not in the name .'of 'Mosaic Tile' commercially
known as such-Held: Tribunal erred in rejecting the claim since words 'Mosaic ...)...
Tiles' in the exemption notification are to be understood in their popular
meaning-Also the claimant produced before the authorities sufficient material l

D to show that both technically and commercially its tiles are known as 'Mosaic
Tiles' which was not rebutted by the departments-Interpretation of Statutes.

Appellant manufactured floor tiles which are marketed under the
trade name 'Marbella Agglomerated Marble' and 'Marbellam Tiles'. The
product is classified under TaritTheading 68.07. Central government issued
E an exemption notification whereby tiles commercially known as 'Mosaic
Tiles' included in Tariff heading 68.07 were exempted from payment of
duty. Appellant claimed exemption from payment of duty on the ground
that the tiles manufactured by them are commercially known as 'Mosaic
Tiles'. Authorities accepted the claim. However, Tribunal rejected the
claim for exemption. Hence the present appeal.
F ~
Respondent contended that the product though technically could be
.....
described as 'Mosaic Tile' is not proved to be commercially known as such.

Appellant contended that they had produced before the authorities
G technical information O'l the manufacturing process of the product and
affidavits of persons in trade to demonstrate that the product is
commercially known as 'Marble Mosaic Tile' which was not rebutted by
~ .,
respondent; and that the Tribunal was not justified in ignoring the
evidence and material produced by appellant and deciding the case only
on the basis of the trade name given by appellant to its products.
H 320
KEDIA AGGLOMERATED MARBLES LTD. v. C.C.E. 321
Allowing the appeal, the Court A
r HELD: I. I. Tribunal upset the well reasoned orders of lower
authorities and wrongly denied the benefit of exemption notification to
appellant on the sole ground that it is marketing its product in the trade
name of'Marbella Agglomerated Marbles' and 'Marbellam Tiles' and not
in the name of 'Mosaic Tile'. Appellant had produced before the B
authorities evidence and material to show that both technically and
commercially its tiles are known as 'Mosaic Tiles' or 'Marble Mosaic Tiles'
which was not rebutted by the department. Appellant had explained that
trade name was given to the product so marketed to distinguish it from
ordinary 'Mosaic Tiles' in which there is no use of marble chips and C
marble stones. There was no justifiable reason for the Tribunal to reject
this explanation since appellant could give typical trade name to the
product to distinguish it in the market from ordinary 'Mosaic Tiles' made
from stones other than stones or chips of marbles.
[326-G; 327-G, H; 328-A, B]
1.2. The primary object of classifying products iii fiscal statute like D
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. The words 'Mosaic Tiles' in the exemption notification E
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.
[328-B-D[ F
Shree Baidyanath Ayurved Bhavan Ltd v. Collector of Central Excise,
Nagpur, [1996) 9 SCC 402, relied on.

Shon Ceramics Pvt. Ltd v. Collector o/Central Excise, (1991] 52 ELT
608, referred to. G
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6302of1995.

From the Judgment and Order dated 24.2.95 of the Central. Excise
Cusl\)ms and Gold (Control) Appellate Tribunal, New Delhi in A.No.
E/2102/93-D and E/C0/519/93-D in F.C.No. 113 of 1995-D. H
322 SUPREME COURT REPORTS [2003] l S.C.R.

A A.R. Madhav Rao, Alok Yadav, Vishwanath Shukla and V.
Balachandran for the Appellant.

T.L.V. Iyer, Ms. Rekha Pandey and B. Krishna Prasad for the
Respondent.

B The Judgment of the Court was delivered by

DHARMADHIKARI J. The appellant M/s Kedia Agglomerated
Marbles Limited is engaged in manufacture of floor tells which are marketed
by them in the trade name "Marbella Agglomerated Marbles" and "Marbellam
C Tiles." The product of the appellant is classified under tariff heading 68.07
for the purpose of excise duty under the Central Excfse Tariff Act .(for short
'the Act'). The above classification of the appellant's product under Tariff
heading 68.07 has been confim1ed by order dated 21.6.1993 passed by the
Collector of Customs and Central Excise (Appeals), Ahmedabad.

D 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 date 20.301990 issued by the Central Government
in exercise of powers conferred by sub-section (I) of Section 5A of the
Central Excise Act. Under the aforesaid exemption notification, 'mosaic tiles
that is to say tiles known commercially as mosaic tHes' included in Tariff
E heading 68.07 are exempt from payment of duty.
+
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.

F 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 exempt~on notification.
G
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.

H Before considering the material produced before the Central Excise
KEDIA AGGLOMERATED MARBLES l TD. v. C.C.E. [D.M. DHARMADHIKARI, I.] 323

Authorities by the appellant for claiming benefit of the exemption notification, A
it is necessary to examine the relevant Tariff heading and subheadings. Chapter
25 of the Tariff 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 tells. The relevant entry 25.04 u·nder sub-heading
B
'Marble' reads as under:

"25.04 Marble

2504.10 - In block Nil
c
- in slabs:
2504.2I In or in relation to the manufacture of Rs. 15 per
which any process is ordinarily carried square metre
.... on with the aid of power and where the
electromotive force used exceeds ten
horse power
.. D
2504.29 - Other Nil
- In tiles:

2504.31 In or in relation to the manufacture of Rs. 15 per
+ which any process is ordinarily carried square metre E
on with the aid of power and where the
electromotive force used exceeds ten
horse power.
2504.39 - Other Nil
F
2504.90 - Other 10%
>I-
It is not disputed that the product manufactured by the appellant is
neitl. er block of marble nor marble in tile.

The appellant has explained the manufacturing process or its product · G
thus:

MANUFACTURING PROCESS

The Marble/Dolomite lumps are procured from the mines situated at
different places. They are crushed with the help of jaw-crusher and H
324 SUPREME COURT REPORTS (2003] I S.C.R.

A 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 Dolomits and 6 % to 7% of Resin. The
colouring material is added wherever necessary. This mixture is put
in the mould and converted in the form of blocks by pressure. The
B block is kept for curing for 8 to 10 days. Then after the block is cut
"·
into slabs and tiles of required sizes. The cut slabs tiles are polished
as per the requirement. The finished tiles/slabs are used for flooring
etc. purpose as tiles."

C It is also not in dispute that the manufactured products i.e. tiles made
from marble chipping or stones have been classified by the department for
the purpose of Excise duty under Chapter 68 with Heading Articles of stone,
plaster cement, asbestos, mica or similar material. The relevant subheading
under which the appellant's product is classified is '.>8.07 which reads as _Ii..
under:
D
68.07. All other articles of stone, 30% plaster, cement, Asbestos,
mica or of similar materials not elsewhere specified or included-

It is not disputed by the department that "mosaic tile" fall under Tariff
heading 68.07 it being 'other article of stone and cement not elsewhere
E specified in other headings of Chapter 68'. The dispute, therefore, is limited. +
to the question whether the appellant's product even though falling under
Tariffheading 68.07 and may be technically 'Mosaic Tiles' or 'Mosaic·marble
tiles are commercially known as sucl:z to be eligible for exemption under the
Notification dated 20.3.90. The relevant part of the notification with reference
F to Tariff heading 68.07 reads as under:

S.No. Sub-heading Description of goods Rate of
No. duty

6. 6807.00 Tiles, that is to Mosaic say,
G tiles known commercially

as "mosaic tiles," Nil

In support of its claim that the product of the appellant is cotnmercially
known as marble mosaic tile, reliance was placed on the report of the Assistant
H Chemical Examiner, Central Excise, Baroda, which states:
KEDIA AGGLOMERATED MARBLES LTD. v. C.C.E. [D.M. DHARMADH!KARI, J.l 325

"The sample is in the form of tube of size pcm x 30c. It is composed A
mainly of stone pieces of different shapes and colour, calcium
carbonate, colouring matter and blinding matter. Tube in the technical
literature available here as Hoenic tube."

Two affidavits of those engaged in the business of purchas~ and sale
of various building materials and third affidavit of an architect were produced B
before the authorities in which it is stated that both in Indian and Foreign
market, tiles prepared from marble chips or stones a~ sold as mosaic tiles or
marble mosaic tiles. '

With regard to the marketing of the manufactured product by the
appellant in the trade name Marbella Aggiomerated Marble and Marbellam C
Tiles the explanation of the appellant was that it was so marketed with a
different trade name to distinguish its marble mosaic tile from other mosaic
tile in which marble stone or chips are noi used. On the basis of the material
and evidence produced by the appellant the Collector of Central Excise
(Appeals), Ahmedabad in its order dated 21.6.1993 held in favour of the D
appellant to allow him to claim exemption from payment of duty under the
aforesaid exemption notification. The relevant part of the order dated 21.6.1993
held in favour ofthe appellant to allow him to claim exemption from payment
+ of duty under the aforesaid exemption notification. The relevant part of the
order dated 21.6.1993 reads thus:-
E
"The respondents have produced three certificate from different traders
who have deposed that the resin, cement tiles manufactured by the
respondents are known and sold as marble mosaic tiles. One affidavit
from Shri Manoj Chimanbhai Patel who is an architect and another
from JM Sharma, partner of Mis Art Ganito, engaged in trading of
building material and another from Shri Purushottamdas Bansal, have F
been produced by the appellants. All of them have deposed that the
agglomerated marble tiles are known in the trade as mosaic tiles. The
department has, however not produced any material to deny these
assertions of the traders and professionals. It is also brought on record
by the respondents as well as by the department that the chemical G
examiner has also opined that the tiles manufactured by the respondents
are known as 'mosaic tiles."

The ordinary dictionary meaning of mosaic is "pattern or design with
inlaid glass or stone." It is also not seriously disputed that tiles manufactured
by appellants from marble chips satisfy the dictionary meaning of the word H
326 SUPREME COURT REPORTS [2003] 1 S.C.R.

A "mosaic." The only dispute raised by the department is that the. appellant's
---\..
product even though technically can be described as 'Mosaic Tile' is not
proved to be commercially known as such to be eligible for claiming benefit
of exemption notification which in very clear terms grants exemption from
duty to mosaic tile "which are commercially known as mosaic tiles"..

B We have heard learned counsel appearing for the appellant and the
Standing Counsel for the Excise Department. On behalf of the appellant it is
contended that the appellarit had produced before the authorities technical
information on the manufacturing process of the product and affidavits of
persons in trade to demoustrate that the product of the appellant is
C commercially known.as Marb~ Mosaic Tile. The department did not produce
any material or evidence in rebuttal. The tribunal, it is argued, was not justified
in ignoring the evidence and material produced by the appellant and deciding
the case only on the basis of the trade name given by the appellant to its
products. It is pointed out that the Tribunal in Shon Ceramics Pvt. Ltd. v.
Collector of Central Excise (1991) 52 ELT 608 held that 'Ceramic Venetian
D Mosaics' are classifiable under heading 230 as it then existed in the Tadff.
The Tribunal accepted the case of the manufacturer in the absence of any
rebuttal material or evidence of the department. The aforesaid decision of the
tribunal was upheld by· this Court by dismissing CA 6629/94 ·on 2.4.1996.
The Tribunal in the aforesaid case of Shon Ceramics had relied on a decision +
E in the case of Mridul Enterprises v. Collector of Central Excise (1988) 37
EL T 379 where the question was classification of Glass. Mosaic Tiles. On
similar ground of non-production of any rebuttal evidence by the department,
.'Glass Mosaic Tiles' were held to be 'Mosaic Tiles' as understood in common
parlance for classifying them under the then Tariff heading 230 and not
under 23A as glass af!d glassware. The appeal of the department preferred
F ·.against the judgment of the tribunal in Mridul Enterprises case (being CA
4224/88) was also dismissed. by this court on 3.5.1995.

The Tribunal by the impugned order by upsetting the decision of the
. tWo authorities below it, rejected the claim of the appellant for benefit of the
exemption notification on the ground that the product was marketed by the
G appellant itself in the trade name Marbolia Agglomerated Marbles and
.Marbel/am Tiles not as "mosaic tiles." Therefore, they were held to be not
. commercially known as 'Mosaic Tiles'. The relevant part of the reasoning of
the Tribunal containing in paragraphs 10-11 reads as under:

"ln support of their claim that "agglomerated marble tiles" in question

.-·
KEDIA AGGLOMERATED MARBLES LTD. v. C.C.E. (D.M. DHARMADHIKARI , J.] 327

have to be deemed as mosaic tiles" the respondents have relied upon A
the Tribunal's decision in the case of Mridul Enterprise and Shon
Ceramics (Supra). In the case of Mridul Enterprises, the question that
. arose for consideration was whether unicolour glass tiles manufactured
by the appellants were classifiable as "mosaic tiles" under Item 230
of the central Excise Tariff of under item 23A of the Tariff as "glass B
and glassware." In the case of Shon Ceramics as well the issue for
consideration was whether the tiles manufactured by the appellants
were 'mosaic tiles' falling under Item 230 of the Central Excise
Tariff. It is seen that in these cases the appellants had produced
evidence to establish thai the product manufactured was known
commercially as 'mosaic tiles,' whereas the department had failed to C
produce any material evidence to rebut it, the tribunal had held that
the tiles in question were 'mosaic tiles.' In the instant case, as held
by us the affidavits of certain persons filed by the respondents to the
effect that the 'agglomerated marble tiles' are known in the trade as
'mosaic tiles' cannot be relied upon and the respondents own literature
and commercial invoices also do not describe the product as 'mosaic D
tiles.' Under these circumstances, we hold that the decisions of the
Tribunal relied upon by the respondents cannot be of any assistance
to them.
+
As described by us earlier in the commercial literature brought out by E
the respondents and in the invoices issued by them the product in
question was being described only as "Marbella agglomerated marble"
and "Marbellam Tiles" and not as 'Mosaic Tiles.' Hence, it has to be
held that commercially the tiles in question were not known as "mosaic
Jiles." We, therefore, hold that the Collector (Appeals) finding that
the disputed goods were 'mosaic tiles'· eligible for exemption under F
Notification No. 59/90 dated 20.31990 is not sustainable."

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 the but in the trade name of Marbella G
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 H
328 SUPREME COURT REPORTS [2003) I S.C.R.

A had explained that it was so marketed to distinguish it from ordinary Mosaic
Tiles in which there is no us'e 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
B 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 v~rious headings or sub-headings in the Tariff should
be understood not in stiiet scientific and technical sense but in their popular
· sense i.e. the meaning a'ssigned to them by those trading in and using the
product (see Shree Baidyanath Ayurved ~havan Ltd. v. Collector of Central
C Excise, N9gpur: [1996] 9 SCC 402 at para 3). The words "mosaic tiles" in
the exemption notification are to be understo.od, 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 undei:stood by those dealing in and using
D 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.
E 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 or marble are also known in the market as "mosaic tiles" like
other "mosaic tiles" in which stones or articles other than marble are used.

F Consequently, this appeal succeeds and is hereby allowed. The impugned
order of the CEGAT dated 243.1995 is hereby set a,side and the orders '¥--
passed by the Assistant Collector o( Central Exeise dated 5.8.1991 and
Collector of Central Excise (Appeals), Ahmedabad dated 21.6.1993 are
restored.

G In the circumstances there $hall be no order as to costs.

N.J. Appeal allowed.