Ore-to-concentrate processing can defeat exemption and trigger interest when duty remains unpaid after provisional assessment.

Manganese ore that had been washed, screened, crushed, sized and cleared of waste and foreign matter was treated as concentrate, because the chapter note deems conversion of ore into concentrate to be manufacture and the HSN explanation supported that classification; the exemption from countervailing duty under Notification No. 12/2012-CE was therefore unavailable. On provisional assessment, interest was held payable once the duty liability was determined and unpaid, as the provisional nature of assessment did not displace the statutory consequence on the facts recorded.

---

---

Issues: (i) Whether manganese ore subjected to washing, removal of waste, crushing and sizing ceased to be ore and became concentrate so as to deny exemption from countervailing duty under Notification No. 12/2012-CE; (ii) Whether interest was payable on the duty demand in the facts of provisional assessment.

Issue (i): Whether manganese ore subjected to washing, removal of waste, crushing and sizing ceased to be ore and became concentrate so as to deny exemption from countervailing duty under Notification No. 12/2012-CE.

Analysis: The imported goods were not run-of-mine ore but had undergone processing before shipment. The relevant chapter note deems conversion of ores into concentrates as manufacture, and the adjudicatory record showed screening, sizing, crushing and removal of overburden and foreign matter. In the light of the deeming provision, the HSN explanation and the strict construction applicable to exemption notifications, the processes were treated as converting the ore into concentrate. The claimed exemption was therefore held unavailable.

Conclusion: The issue was decided against the appellants and in favour of the Revenue.

Issue (ii): Whether interest was payable on the duty demand in the facts of provisional assessment.

Analysis: The order records that, following the applicable statutory position and the earlier coordinate decision relied upon, interest becomes payable where duty remains unpaid after the relevant liability is determined, and the provisional character of assessment did not exclude such consequence on the facts found.

Conclusion: The issue was decided against the appellants and in favour of the Revenue.

Final Conclusion: The exemption claim failed, the duty demand was sustained, and the appeals did not succeed.

Ratio Decidendi: Where goods of Chapter 26 are subjected to processing that removes foreign matter and improves the ore into concentrate, the deeming provision treating conversion of ore into concentrate as manufacture excludes the goods from an ore-only exemption notification.

---