Crushing and screening of iron ore alone did not create concentrate, defeating central excise duty, interest and penalty.

Crushing and screening of iron ore, by or on behalf of the assessee, did not amount to manufacture of iron ore concentrate under Chapter Note 4 to Chapter 26 of the Central Excise Tariff Act, 1985. The process was limited to size reduction and segregation; no beneficiation, special treatment, removal of foreign matter, or enrichment of ferrous content was shown. In the absence of a tariff definition, "concentrate" was read in line with the HSN Explanatory Notes as ore from which foreign matter has been removed by special treatment. As that was not established, crushing and screening alone did not convert ore into concentrate, and the central excise duty demand, with interest and penalty, was held unsustainable.

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Issues: Whether crushing and screening of iron ore, undertaken by or on behalf of the assessee, amounted to manufacture of iron ore concentrate under Chapter Note 4 to Chapter 26 of the Central Excise Tariff Act, 1985, and whether the resulting iron ore lumps and fines remained exempt as ores.

Analysis: The process in dispute was confined to raising, crushing and screening of iron ore, resulting only in size reduction and segregation. No beneficiation or special treatment removing foreign matter or enriching ferrous content was shown. The term "concentrate" is understood, in the absence of a tariff definition, in light of the HSN Explanatory Notes as ore from which part or all foreign matter has been removed by special treatment. The Department did not establish the use of any such treatment or the existence of a concentration process, and the settled position in earlier decisions was that crushing and screening, by themselves, do not amount to conversion of ore into concentrate.

Conclusion: The process did not amount to manufacture of iron ore concentrate, and the demand of central excise duty, together with interest and penalty, was unsustainable. The assessee succeeded.

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