2019 (8) TMI 253 - AT - Central Excise

Roasting ores into concentrate constitutes manufacturing under Central Excise Tariff Act

The Supreme Court held that roasting ores into concentrate constitutes manufacturing under Chapter Note 4 of the Central Excise Tariff Act, 1985. This ... Process amounting to manufacture or not - process of roasting of ores into concentrate - benefit of N/N. 4/2006-C.E.- HELD THAT:- The issue arising out of the present case is no more res integra in view of the judgment of the Hon’ble Supreme Court in the case of the respondent itself, M/S. STAR INDUSTRIES VERSUS COMMISSIONER OF CUSTOMS (IMPORTS) , RAIGAD [2015 (10) TMI 1288 - SUPREME COURT], where the Hon’ble Apex Court have held that in view of Chapter Note 4 appended to Chapter 26 of the Tariff Act, the process of roasting of ores into concentrate shall be considered as manufacture and thus, the benefit of duty exemption provided under Notification No. 4/2006-C.E. should not be available. Appeal allowed - decided in favor of Revenue. Issues:Whether roasting of ores into concentrate constitutes manufacturing activity under Chapter Note 4 of Chapter 26 of the Central Excise Tariff Act, 1985.Analysis:The judgment revolves around the interpretation of whether the process of roasting ores into concentrate should be considered a manufacturing activity under Chapter Note 4 of Chapter 26 of the Central Excise Tariff Act, 1985. The Hon'ble Supreme Court's decision in a previous case established that roasting ores into concentrate is indeed considered manufacturing under Chapter Note 4. The judgment highlighted that the process of roasting ores into concentrate results in a different product, as per the definition of 'manufacture' under Section 2(f) of the Central Excise Tariff Act. This differentiation is crucial as it makes concentrates liable for excise duty, leading to the exclusion of concentrates from the exemption provided under Notification No. 4/2006-C.E., which specifically exempts only ores. The judgment emphasized the legislative intent to treat ores and concentrates as distinct items, with the strict construction of exemption notifications favoring the Revenue. The Tribunal's decision was upheld, concluding that concentrates must be treated as separate from ores post-roasting, making them ineligible for the exemption under Notification No. 4/2006-C.E.Conclusion:The judgment clarifies that the process of roasting ores into concentrate constitutes manufacturing under Chapter Note 4, resulting in concentrates being considered distinct from ores for excise duty purposes. Therefore, the appeal filed by the Revenue was allowed, emphasizing the strict interpretation of exemption notifications in favor of the Revenue.