Manufacture by ore concentration triggers countervailing duty after Chapter Note 4 brings the process within tariff definition.

Conversion of imported ore into concentrate was treated as manufacture because Chapter Note 4 to Chapter 26 expressly brought that process within the statutory definition. For countervailing duty under Section 3 of the Customs Tariff Act, the imported product is deemed to have undergone manufacture in India and duty is linked to the excise duty that would have applied to a like domestic product. The general exemption for ores under the earlier notification did not override the amended chapter note. The imported goods were therefore held liable to duty, and the issue was decided in favour of Revenue.

---

---

Issues: Whether the process of converting the imported ore into concentrate amounted to manufacture so as to attract customs duty by way of countervailing duty.

Analysis: The governing chapter note treated the process of converting ores into concentrates as manufacture. The applicable tariff entry and the general exemption notification were considered in light of the settled position that for levy of countervailing duty under Section 3 of the Customs Tariff Act, the imported product is deemed to have been manufactured in India and the duty is linked to the excise duty that would have been leviable on a like domestic product. In view of the statutory amendment adding Chapter Note 4 to Chapter 26, the conversion of ores into concentrates fell within manufacture and the exemption based on ores under the earlier notification did not displace that position.

Conclusion: The issue was decided against the assessee and in favour of Revenue; the imported goods were liable to duty.

---