TaxTMI 
TaxTMI 
2026 (1) TMI 1405
X X X X Extracts X X X X
X X X X Extracts X X X X
.... dt.01.03.2006. The Bills of Entry were provisionally assessed in terms of section 18(1) of the Customs Act, 1962 and the exemption was extended on submission of PD Bond. On adjudication, the Original Authority denied the exemption benefit and held that since the imported Manganese Ore has been subjected to crushing, screening and sizing process, they are not 'ores' but 'concentrates' and the process amounts to manufacture in terms of Chapter Note 4 to Chapter 26. On appeal, the Commissioner (Appeals) has upheld the OIO. 3. Learned Advocate for the appellant has mainly submitted that the Customs department has accepted the documents, which were furnished in support of the imported Manganese Lump Ore and the Original Authority as well as the Commissioner (Appeals) has not rejected the classification of the imported Ore under Tariff 2602 00 40, which by name and description covers 'Manganese Ore (35% or more but below 40%)'. Manganese Ore depending upon the Manganese content is classifiable under Tariff items 2602 00 10 to 2602 00 50, whereas the concentrates are classifiable under Tariff item 2602 00 90 under 'others'. He further submitted that in the past, the customs department....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he ore, etc., (but not roasting for purposes of sulphating, chloridating, etc.)" 5. In view of the above, learned Advocate has submitted that ores undergo processes normal to metallurgical industry, whereas, concentrates are the ores which have undergone special treatments. He has also relied on Circular F.No.332/1/2012-TRU dt.17.01.2012. The relevant paras of the circular are as under. "For 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 might 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 a 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 addition to crushing and screening) suc....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... above, which is applicable to the present case and therefore, their product is Manganese ore and not Manganese concentrate. They have also highlighted the term 'concentrate' and 'ore' defined in Kirk-Othmer's Encyclopedia of Chemical Technology, as under. 'Concentrate' - An action to intensify in strength or purity by the removal of valueless or unneeded constituents, i.e., separation of core or metal from its containing rock or earth. The concentration of ores always proceeds by steps or stages. Liberation of mineral values is often the initial step. Concentrate also means a product of concentration i.e., enriched ore after removal of waste in a beneficiation mill. 'Ore' - A mineral or aggregate of minerals from which a valuable constituent, especially a metal, can be extracted profitably. 8. They have also relied on the judgment of Hon'ble Supreme Court in the case of Mineral and Metals Trading Corporation of India Vs UOI [1983 (13) ELT 1542 (SC)], wherein, inter alia, it was held that concentrate would also get covered in the expression 'ore'. Similarly, they have also relied on the judgment of Coordinate Bench in the case of CC Vs Hindustan Gas and Industr....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... In view of the clearcut deeming provisions, there is no need to conduct any test or analysis of the product in question. Thus, the onus of proving the eligibility for availing exemption under a notification lies with the importer as held in various judicial forums. 10. Heard both sides and perused the records. 11. In this case, admittedly, the ore has been supplied in terms of contract and certain specifications stipulated by the appellant. It is not an ore in the form which has emerged in the mine i.e., Run of Mine (ROM) Ore. There is also a clear finding of the adjudicating authority based on evidence on record that process of screening and sizing, etc., has been carried out on ROM ore before it is shipped to the appellant. Even crushing of ore and removal of overburden i.e., stone etc., has taken place. The issue is whether these are normal process or special process. 12. We find that similar issue has been dealt by this Tribunal in the case of M/s Sarda Energy & Minerals Ltd & Ors Vs CC, Visakhapatnam [Final Order No. A/30013-30016/2026 dt.09.01.2026], wherein, in the similar set of facts and admitted positions, it was held that the subject processes undertaken on RO....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of 1986) as amounting to manufacture; or (iii) which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer." b) The purpose of treating concentrate as manufactured product out of ores is to make concentrates as liable for excise duty. Otherwise, there was no reason to deem the process of converting ores into concentrates as manufacture. 29. Once the aforesaid legal repercussions are taken note of, as a fortiori, it becomes obvious that Notification No. 4/2006-C.E. which exempts only ores would not include within itself 'concentrates' also because of the reason that after the insertion of Note 4, concentrate is to be treated as a different product than ores, in law for the purposes of products of Chapter 26. 30. ............ 31. We, thus, are of the opinion that in the impugned judgment, the Tribunal has rightly arrived at the conclusion that by virtue of Note 4, conc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....have to be considered as amounting to conversion and therefore resulting into deemed emergence of new excisable goods i.e., ore concentrate. We also find that the circular of CBIC is based on a clarification issued by the Ministry of Mines, where certain processes of crushing and screening were treated as mere preparatory processes and were not treated as special treatments as contemplated in the explanatory notes. We find that while the circulars are binding on the department, however, if it is patently against the obvious stated provisions then it need not be followed. That apart, in the present appeals, it is not only a question of crushing and screening, etc., but washing is also involved for removal of foreign material partly or fully. Therefore, what might have been clarified in the context of iron ore, need not be true for all types of ores or end use, as they have different impurities and intended uses requiring different kinds of preparatory processes. 23. Therefore, both on account of cited judgments having not taken into account the observations of the Hon'ble Supreme Court in the case of M/s Star Industries Vs CC (Imports), Raigad (supra) as also the fact that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 'beneficiation' under Rule 3(d) of Mineral Conservation and Development Rules, 1988, as under. "12. The major objection but forward by the Department is that the appellants have not undertaken any beneficiation process to make the mined sand into processed/upgraded Ilmenite. The appellant has produced the flow chart showing the various processes undertaken before the goods are exported. It may be true that the mine sand has not undergone any chemical treatment or roasting. It has to be seen that the said flow chart has been approved by the Mining Department as well as the Atomic Energy. Further in the Tariff heading reproduced above, the word "beneficiation" has not been explained. Rule 3(d) of Mineral Conservation and Development Rules, 1988 defines "beneficiation". The said rule reads as under: "4.5 Mineral Conservation and Development Rules, 1988. 3. Definitions.- In these rules, unless the context otherwise requires - 3(d) "beneficiation" means process of minerals or ores for the purpose of (i) Regulating the size of a desired produce; (ii) Removing unwanted constituents; and (iii) Improving quality, purity or assa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....preme Court in the case of Tata Steel & Others v. UOI (supra) while discussing the entitlement of refund of royalty on the Mines & Minerals has discussed the 'beneficiation' and the benefits. The relevant paragraphs of Apex Court is reproduced as under :- "26. The question that, therefore, arises is what is the consequence of beneficiation? Very briefly, the consequence of beneficiation or coal is upgrading or improving its quality from ROM coal. In the Convenience Volume handed over to us, with reference to beneficiation or coal, it is stated by Tata Steel as follows : The crushed raw coal (ROM) has ash percentage varying from 22% to 40% and moisture of 3% to 5%. For use in Blast furnace for steel making, we require clean coal of uniform quality at low ash %. So, Beneficiation of ROM raw coal is done to reduce the ash content to bring up to Steel Grade coal. ROM coal of various seams at coal mine is fed into the Coal washery (Beneficiation plant) for beneficiation so that the final clean coal product has ash of below 15% (Steel Grade coal). For coal beneficiation, gravity separation methods for coarser (size 13 mm to 0.5 mm) material and froth f....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Hon'ble High Court of Patna in the case of Indian Aluminium Co. Ltd. and Anr. v. State of Bihar & Ors. (supra) while deciding the constitutional validity of collection of fees on ores under Mines & Minerals Act, 1980 relied the definition of beneficiation given under MCD Rules, 1988. Further, we find that the Board's circular dated 17-2-2012 had clarified chapter note of Chapter 2601 - 2617 and by beneficiation process the end product of ore is concentrate or upgraded ore. The extract of circular is reproduced as under :- " * * * 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 a 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 addition to crushing and screening) such as milling, hydraulic separation, magnetic separation, floatation & Concentrate thickening have to be undertaken for ores to be convert....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n materials have been treated as leading to upgradation of quality, etc., and keeping in view the definition of 'beneficiation' process, it was held that resulting product is beneficiated product. 27. There are some other incidental grounds taken by appellants that no testing was conducted or expert opinion relied upon to arrive at the conclusion that such activities led to conversion of ore into concentrate. We find that while prior to insertion of deeming provision, the tests were being conducted to distinguish between concentrate and ore for deciding whether they are eligible for exemption or otherwise. However, post this insertion of Chapter Note, in view of the deeming provision, there was no necessity to conduct any test as long as it is established and admitted that certain activities were undertaken on ROM ore before it was shipped to India. The only issue that required to be seen is that whether these activities undertaken prior to its shipment could be considered as process leading to removal of impurities and foreign material so as to make it suitable for metallurgical purposes or for economical transportation. It is also not necessary that it should be some det....