TaxTMI 
TaxTMI 
2018 (1) TMI 984
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.... ores in the Budget of 2011. The Chapter Note 4 to Chapter 26 of the First Schedule to the Central Excise Tariff Act, 1985 reads as follows: "In relation to products of this chapter, the process of converting ores into concentrates shall amount to manufacture." 2. The appellant was processing the manganese ore in their factory in their beneficiation plant, wherein various processes such as crushing, screening, sorting by hydraulic machines and washing with high pressure water was performed by machines. By these processors, extraneous material like clay, gangue etc. were removed and the concentration of manganese ore was improved. The Department was of the view that in the light of Chapter Note 4 to Chapter 26, the processes carried out b....
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....ecial treatment and hence, the appellant has not manufactured ore concentrate and no duty will be liable to pay. (iii) He also referred to HSN Note to Chapter 26 which says that Chapter Note 4 will be applicable only in cases where the process was undertaken resulting in removal of foreign matter by special treatment. (iv) He relied on the decision of the Tribunal in the case of M/s Jain Mines and Minerals (India) Ltd. Vs. CCE&ST, Jabalpur, Final Order No. 57214/2017 dated 10.10.2017 wherein the Tribunal has decided an identical issue in favour of the appellant, holding that no duty will be payable. (vi) He also referred to the Apex Court decision in the case of the appellant Manganese Ore India Limited Vs. State of Madhya Pradesh and....
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....gned order may be upheld. 6. We have heard both sides and perused the record. 7. The manganese ore is mined in the Balaghat mine. Such ore is transferred to the beneficiation plant of the appellant wherein several processes are undertaken to make the ore saleable and to improve the quality of the ore which will facilitate better recovery of the metal i.e. manganese. The processes undertaken include crushing, screening, sorting to remove rock, washing mechanically to remove waste material like clay etc. The dispute in the present case is with reference to the Chapter Note 4 to Chapter 26, whether such processes are to be considered as converting ores into concentrates. If the answer is in the affirmative, the processes are to be considered....
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.... the purposes of headings 2601-2617, the term "concentrates‟ applies to ores which have had part or all of the foreign matter removed by special treatments either because such foreign matter may hamper subsequent metallurgical operations or with a view to economical transport". From the above definition, it is clear that removal of part or all of foreign material is envisaged for conversion of ores into concentrates. Ministry of Mines have clarified that no special treatment is involved in the crushing and screening of ore and the end product can be termed as concentrate only when the grade of ore is sufficiently improved through beneficiation. Federation of Indian Mineral Industries have also pointed out that several processes (in ....
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....cesses narrated under the category of beneficiation or under the HSN need not be applied on the extracted Ore; even if by the application of few processes as enumerated under the scope of "beneficiation‟, with an objective for removal of impurities or for economical transportation, definitely, covered under the scope "concentration". We find force in the contention of the Revenue. There has been no serious argument nor any contradiction of the fact that after carrying out the process of crushing, grinding, washing, grading with the particular size, the treated Ores are not made fit to be used directly every content of the Ores has improved or the relevancy of all the processes categorised under the beneficiation method, become necessa....
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.... chapters of CETA, 1985 as amounting to manufacture, such processes will fall under the definition of "manufacture". It is seen that the Tribunal in the above case has held that, processes which are very similar to those undertaken by the appellant, have been held to be covered by the Chapter Note 4 and the resultant goods are liable to Central Excise duty. We are of the view that above decision of the Tribunal is applicable to the present facts of the case and hence, we conclude that the processes undertaken by the appellant will incur the mischief of Chapter 4 and Excise duty will be payable by the appellant. However, we note that the Tribunal has set aside the penalty. By following the same, in the present case too, the penalty imposed....