Iron ore crushing and screening alone is not manufacture of concentrates and does not attract excise duty.

Crushing and screening of iron ore, without further beneficiation or special treatment, does not amount to manufacture of iron ore concentrates under Chapter Note 4 to Chapter 26 of the Central Excise Tariff. The term "concentrates" was read with the HSN Explanatory Notes to mean ore from which foreign matter has been removed by special treatment. Mere crushing and screening was treated as a size-reduction process that removes loose impurities such as mud and dust, but does not constitute concentration or beneficiation. On that basis, excise duty is not attracted unless the product satisfies the HSN definition of concentrate.

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Issues: Whether crushing and screening of iron ore amounts to manufacture of iron ore concentrates under Chapter Note 4 to Chapter 26 of the First Schedule to the Central Excise Tariff Act, 1985, so as to attract central excise duty.

Analysis: The term "concentrates" is not defined in the tariff, and the relevant meaning was taken from the HSN Explanatory Notes. On that basis, concentrates are ores from which part or all of the foreign matter has been removed by special treatments. Mere crushing and screening was held to be only a size-reduction process, removing loose materials such as mud and dust, and not a process of concentration or beneficiation. The circular issued by the tax administration and the clarification from the Ministry of Mines were treated as supporting the view that no special treatment is involved in crushing and screening alone, and that duty arises only where the product answers the HSN definition of concentrate.

Conclusion: Crushing and screening of iron ore, without further beneficiation or special treatment, does not amount to manufacture of concentrates and no excise duty is payable on that basis.

Ratio Decidendi: For Chapter Note 4 to Chapter 26 to apply, the process must remove foreign matter by special treatment so that the ore becomes a concentrate; mere crushing and screening does not satisfy that test.

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