2018 (4) TMI 1447 - AT - Central Excise

Appellant's Iron Ore Processing Not Manufacturing New Product: Tribunal Rules Against Central Excise Duty

The Tribunal held that the appellant's process of converting iron ore into concentrates does not amount to manufacturing a new product, thus rejecting the ... Manufacture - processing of iron ore - Revenue held a view that such conversion of iron ore into concentrates will amount to manufacture and liable to central excise duty - Held that: - the identical issue has come up before the Tribunal in the case of M/s. Jains Mines and Minerals (India) Ltd. vs. CCE & ST, Jabalpur [2017 (10) TMI 1283 - CESTAT, Delhi], where it was held that There is no special process facility with the appellant. Improvement in the content of “Fe” due to the processes undertaken by the appellant by itself will not make the resultant product as iron ore concentrate - the process do not amount to manufacture - appeal allowed - decided in favor of appellant. Issues: Service tax liability on iron ore processing - Whether conversion of iron ore into concentrates amounts to manufacture and central excise duty liability.Analysis:The appellant, engaged in processing iron ore, disputed their service tax liability on the process, claiming it does not amount to manufacture. The Revenue argued that converting iron ore into concentrates is manufacturing, thus attracting central excise duty and penalty. The Tribunal referred to a similar case where it was clarified that the process undertaken by the appellant does not result in a new product. The Tribunal considered various case laws, including Bheraghat Minerals, Steel Authority of India, Indian Rare Earth Ltd., and Super Engineering, to support its decision. It was concluded that the appellant's process does not constitute manufacturing a new product, leading to setting aside the impugned order and allowing the appeal with consequential relief.