TaxTMI 
TaxTMI 
2018 (4) TMI 492
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.... the naturally occurring mined Ore. That one of the supplier viz. lluka Resources Ltd., Australia in its website in Flow chart has shown the manufacturing process of Rutile/ Leucoxene. In the said manufacturing process, it stated that the concentration of mineral sands from primary ore is carried out by wet concentration process, attrition and dry mill processing. The products thus appear to be concentrates and not as declared by the Appellant. Only the ores are exempted from duty under the subject notification supra and not concentrates. The Show cause notice also relied upon Explanatory Notes to chapter Heading 26.01 to 26.17, Section 2 (f), Circular No. 09/2012 - Cus dt. 23.03.2012 to allege that ores and concentrates are two distinct products and that concentrates suffer central excise duty being manufactured product and thus the imported item is not entitled for the exemption as it applies only to ores. That the sample retrieved from the factory and from M/s Ameya Logistics Pvt. Ltd. of live consignment were sent to ITI, Powai who reported that the product has been subject to beneficiation and concentration. Statements of Shri Surendra Gautam Yeole, Manager (Production) and Sh....
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....Sintered Products 2001 (130) ELT 173 (TRI). He submits that the true meaning of the 'Ores' has been defined in chapter Note 2 to Chapter 26 of the Excise Tariff as under : "2. For the purposes of headings 2601 to 2617, the term "ores" means minerals of mineralogical species actually used in the metallurgical industry for the extraction of mercury, of the metals of heading 2844 or of the metals of Section XIV or XV, even if they are intended for non-metallurgical purposes. Headings 2601 to 2617 do not, however, include minerals which have been submitted to processes not normal to the metallurgical industry." That until and unless mineral have been subjected to a process which is not normal to the metallurgical industry or which is of a special treatment category, it would retain its classification as 'ores'. He also relies upon the Explanatory Note to chapter 26 of Harmonised System of Nomenclature. He relies upon the Hon'ble Supreme Court judgment in case of Minerals & Metals Trading Corporation of India Ltd. Vs UOI 1983 (13) ELT 1542 (SC), Hyderabad Industries Vs. UOI 1989 (108) ELT 321 (SC), Commissioner Vs. Indian Rare Earths Ltd 2009 (241) ELT A70 (SC), Kerala Minerals & ....
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....with any cogent evidence. In rejoinder to the revenue he submits that the revenue has relied upon the manufacturer's/ international suppliers manual/ broucher to submit that the sophisticated machinery is used for concentration whereas it is apparent that the said person has described machinery as separators and not concentrators. The reliance placed upon the statement of director by the revenue that they have added words 'Rutile Ore' to the Bill of Entry solely for the purpose of claiming exemption is totally wrong. The revenue has failed to appreciate the wordings of chapter 26 of the Excise Tariff. The supplier has described the products as 'Leucoxene Sand' which is nothing but sand containing majority rutile ore. However under CTH 2614, the wordings Leucoxene does not find any mention and accordingly the Appellant classified the same as Rutile sands which is most apt classification describing the goods imported by them. The word 'Rutile Ore' was used only for the purpose of classification and not with intent to wrongly claim the exemption. It is not the case of the department that supplier has described the products as "Concentrate' and the Appellant has changed it to 'ore'. As....
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....er 2016 (338) ELT 454 (TRI). She submitted that the CBEC vide Circular dt. 17.02.2012 had clarified the chapter note of chapter 26.01 to 26.17 and that by beneficiation process the end product of ore is concentrated or upgraded ore. That in case of V.V. Minerals Vs. Commissioner 2016 - TIOL - 141 - CESTAT - MAD and M/s Trimax Sands Pvt. Ltd. Vs Commissioner 2018 - TIOL - 164 - CESTAT the tribunal have analysed the process of beneficiation in detail following the ratio of Apex Court in case of M/s Tata Steel Ltd. Vs. UOI. She submits that the exemption notifications has to be strictly complied. She submits that the judgment in case of Indian Rare Earth 2018 (228) ELT 213 (TRI) relied upon by the Appellant issue was not whether the ore was converted into concentrate. The Tribunal had only analysed whether the process amounted to manufacture or not with respect to emergence of new product as per the definition of Section 2(f) (i) of CEA. The judgment is prior to introduction of chapter note 4 to chapter 26 and therefore no longer applicable as now the same process amounts to manufacture. That as per the statement of Director, Shri Venugopal Malu in import documents viz. Bill of Lading....
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....cialized process. It is a common process undertaken in any mining industry. The Explanatory Notes to chapter 26 of the HSN in reference to 'Ores' and 'Concentrates' is as under : "The term "ores" applies to metalliferous minerals associated with the substances in which they occur and with which they are extracted from the mine; it also applies to native metals in their gangue (e.g. metalliferous sands). Ores are seldom marketed before "preparation" for subsequent metallurgical operations. The most important preparatory processes are those aimed at concentrating the ores. For the purposes of the present heading, 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 might hamper subsequent metallurgical operations or with a view to economical transport. Processes to which products of this heading may have been submitted include physical, physico-chemical or chemical operations, provided that they are normal to the preparation of the ores for the extraction of metal. With the exception of changes resulting from calcinations, roasting or firing (with or without agglomeration....
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....eport given by the IIT, Powai was as under : AA. In this connection, the Appellant further places reliance on the report submitted by IIT, Bombay issued vide its letter dated 03.05.2013, the relevant extract of which is reproduced hereinbelow: "From the above studies it is clear that the Sample 1 and Sample 2 represent homogenous samples of rutile and anatase with a very narrow size distribution. The lack of any clay or quartz in the samples and their homogenous nature indicates that they have been subjected to concentration based on physical properties which may include specific gravity and magnetic or paramagnetic properties. The fine size and narrow range of sizedistribution indicates that sizing may also have been carried out on these samples. It is therefore concluded that the mined placer deposit has been subjected to beneficiation and concentration" From the above report of IIT, Powai we find that no specific findings was given in the report in reference to questions posed by the revenue. It did not give nature of process undertaken by the supplier nor did it state as to whether the sample are part of beach sand alongwith other heavy minerals or whether it is ore or....
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....nefit of Notification No. 4/2006-C.E. as the goods which are imported are nothing but Zirconium Ore." We find that the ratio of the subject judgment equally applies in present case in as much as the report of Indian Bureau of Mining pertains to an expert report. Thus we do not find any reason to discard the report of the IBM. 5. The revenue has relied upon the judgment of Indian Rare Earth Ltd. vs. CCE & ST, BBSR - I 2016 (338) ELT 774 (TRI - KOL) (hereinafter referred as IRE-2) and Rungta Mines Ltd. Vs. CCE 2016 (338) ELT 454 that the process undertaken on sand ores like washing, magnetic separation, gravity separation to remove unwanted matters result into conversion of ores to concentrate and which activity is manufacture in view of chapter note 4 to chapter 26. Also reliance has been placed upon the judgments in case of Star industries Vs. CCU 2015 - TIOL - 234 - SC- CUS. In this context we are of the view that in the present case before blindly applying the chapter note 4 it is imperative to peruse the goods in the light of Chapter Note 2, HSN Explanatory Notes, the process undertaken by the supplier, the nature of the imported goods in question and the report of IBM. If th....
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.... fact as to why this report of IBM is not applicable in the present case. The adjudicating authority has merely proceeded to discard the report of IBM on the basis of description of goods as given in article in Wikipedia. Even the allegation of show cause notice regarding the process undertaken by the supplier is not based upon the enquiry made by the revenue but on the basis of information available on its website which is not correct. We therefore are of the view that the ratio of Tribunal orders in IRE - 2 and Rungta Mines (supra) are not applicable to the present case. It is to be observed that Chapter Note 2 to chapter 26 which comes ahead of chapter Note 4 is relevant criteria to determine the identity of goods. The revenue has not pointed out any instance that the imported goods were submitted to processes not normal to the metallurgical industry. Thus in absence of same it cannot be said that the goods are "concentrates'. It has been alleged that in import documents the supplier has described the goods in all the documents as 'Rutile/HYTI 91 Leucoxene Sand/Lecoxene Sand whereas in Bill of Entry the Appellant had prefixed the word 'Rutile Ore' with the intention to show the ....
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....freely is clear occurred on sea beach along with ordinary sand. Most of the sand on the sea beach is ordinary sand only. Mineral sands constitute less than 10% of the total quantity of sand on the sea beach dredged out by the appellants. Sand as it occurs on the sea shore cannot be called mineral ores. Such sand is also not bought and sold as mineral ores. The processes carried out by the appellants lead to separation of valuable rare mineral sands from the ordinary sand. The processes are physical and mechanical in nature. No special processes including rosting or chemical treatment is carried out. The processes do not bring about any upgradation or augmentation of purity in the mineral sands separated from ordinary sand. It is also on record that the resultant mineral sands are bought and sold as ores only and not as concentrates of ores. It is clear from note 2 of Chapter 26 of the Central Excise Tariff that only ores which have been submitted to processes, not normal to the metallurgical industries are excluded from ores. Thus, ores which have been subjected to special treatment go out of the scope of ores. No such special treatment is carried out in the present case. 9. The....
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....ing of Indian Rare Earths Ltd. cited by the counsel. The said ruling refers to 2 cases. Hyderabad Industries Ltd. v. U.O.I. - 1995 (78) E.L.T. 641 (S.C.); Mineral and Metals Trading Corporation of India Ltd. v. U.O.I. - 1983 (13) E.L.T. 1542 (S.C.). In the present case, the appellants are merely carrying on the activity of' separating the minerals from the beach sand. The situation is similar to the one of the cited cases viz. Indian Rare Earths Ltd. wherein also the process of separation was from the beach sand to bring out rare mineral sands by physical process and mechanical process. In the present case also, the minerals which are present in the beach sand are separated by magnetic, electrostatic and gravity process. These minerals continue to remain as minerals in the same form. They had not changed their identity nor are they known by a different name in the market. There is no chemical or physical change in the mere characteristics. Therefore, the judgment of Indian Rare Earths Ltd. case, which is based on to 2 Supreme Court judgments, clearly applies to the facts of the case. Respectfully following the same, the impugned orders are set aside and appeals are allowed with con....