Crushing and screening of iron ore alone is not manufacture of concentrate without beneficiation or foreign-matter removal.

Crushing and screening of run-of-mine iron ore, without beneficiation, special metallurgical treatment, or removal of foreign matter, does not amount to manufacture of iron ore concentrate under Chapter Note 4 to Chapter 26 of the Central Excise Tariff Act, 1985. The burden was on the Department to establish that the process resulted in concentration or enhancement of ferrous content, but the record showed only size reduction and segregation into lumps and fines. Technical material and official clarifications on beneficiation supported the view that concentrate requires further processes such as milling, washing, magnetic separation, flotation, or similar treatment. On that basis, the duty demand, interest, and penalty were unsustainable.

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Issues: Whether crushing and screening of iron ore, without any beneficiation or special treatment for removal of foreign matter, amounts to manufacture of iron ore concentrates under Chapter Note 4 to Chapter 26 of the Central Excise Tariff Act, 1985, and whether the consequent demand, interest and penalty could survive.

Analysis: The activity undertaken was confined to crushing and screening of run-of-mine iron ore for size reduction and segregation. The record showed no beneficiation plant, no special treatment in metallurgy, and no material to establish removal of foreign matter or enhancement of ferrous content so as to convert ore into concentrate. The burden lay on the Department to prove that the process answered the statutory concept of concentration, but that burden was not discharged. The technical literature and the departmental circulars referred to beneficiation as involving processes such as milling, washing, hydraulic separation, magnetic separation and flotation, which were not shown to have been undertaken. The clarification of the Ministry of Mines and the CBEC also supported the position that crushing and screening of ROM into lumps and fines, without further beneficiation, does not produce concentrate.

Conclusion: Crushing and screening alone did not amount to manufacture of iron ore concentrates, and the duty demand, interest and penalty were unsustainable. The assessee succeeded on the issue.

Ratio Decidendi: Where iron ore is subjected only to crushing and screening, without special treatment or removal of foreign matter, the process does not constitute concentration or manufacture of iron ore concentrate for excise purposes.

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