Mere separation of mineral sands from beach sand is not manufacture of excisable concentrates absent transformation or special treatment.

Mere physical and mechanical separation of naturally occurring mineral sands from beach sand did not amount to manufacture of ore concentrates for excise purposes. Because the process involved no roasting, chemical treatment, special metallurgical preparation, or change in chemical structure, and did not create a new and distinct commodity in commercial parlance, the goods remained mineral sands rather than Chapter 26 concentrates. The duty demand therefore failed, the classification as excisable concentrates was unsustainable, and relief was granted to the assessee.

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Issues: Whether the physical and mechanical separation of mineral sands from beach sand resulted in manufacture of ore concentrates classifiable under Chapter 26 of the Central Excise Tariff and liable to excise duty.

Analysis: The minerals occurred naturally along with ordinary beach sand and were recovered by physical and mechanical separation. The process did not involve roasting, chemical treatment, or any other special treatment normal to metallurgical preparation. The separated minerals did not undergo transformation in chemical structure, nor was there any upgradation of purity amounting to a new product. In commercial parlance also, the goods continued to be treated as ore sands rather than concentrates. On these facts, the separation activity was only extraction of naturally occurring mineral sands and not manufacture of concentrates.

Conclusion: The duty demand was unsustainable and the classification of the goods as excisable concentrates under Chapter 26 failed; the finding is in favour of the assessee.

Final Conclusion: The impugned duty demand was set aside and the appeal succeeded with consequential relief.

Ratio Decidendi: Mere physical separation of naturally occurring minerals from associated sand, without special treatment or change in chemical structure leading to a new and distinct commodity, does not amount to manufacture of concentrates for excise purposes.

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