2025 (11) TMI 1956

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.... Ore raised by the appellant from their mines have Ferrous (Fe) content between 60% to 62%, which do not require concentration, being high grade Iron Ores. 3.1. The Iron Ore Lumps (5 mm-18 mm)/ Fines (below 5 mm) produced by the appellant are absolutely exempted under Notification No. 4/2006 CE dated 01.03.2006 (Sl. No-4) (up to 16-03-2012] and Notification No. 12/2012- CE dated 17.03.2012 [Sl.No.-56] w.e.f. 17.03.2012.Duty in the instant case is demanded on "Lumps" of 5-18 mm/10-40 mm and Fines (below 5 mm). 4. The appellant, under the Mines & Mineral (Regulation & Development) Act, 1957, has filed their returns regularly with the mining authorities showing production and sale of Iron Ore Lumps/Fines. As per the said returns, which are accepted by the Mining authorities, the production of Concentrate is Nil. From the Mining Plan and Pollution Consent Order placed on record, it appears that there is no concentration plant with the appellant. 5. The appellant, in the process of mining, first obtains Run of Mines (ROM) consisting of Iron Ore Boulders which is transported to Crushing and Screening Plant inside the mining lease hold area where it is "crushed and screened" to r....

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....interest and penalty. 9. The above said Notices were adjudicated by the Ld. Commissioner of Central Excise, Customs & Service Tax, Bhubaneswar-II Commissionerate, who passed the Order-in-Original No. BSR-EXCUS-002- COM-018-15-16 dated 04.03.2016 [hereinafter referred to as the "impugned order"] confirming the demand of Rs.130,07,05,638/-, along with interest, and dropping the rest of the demand of Rs.7,02,90,781/-. The ld. adjudicating authority also imposed penalty equal to the amount of central excise duty demanded, under Section 11AC of the Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002. 9.1. In the impugned Order, the Ld. Commissioner has held as follows:- (i) The appellant is engaged in crushing & screening of Iron Ore; (ii) The process of "Crushing & Screening" are sufficient enough to make the ores fit for economical transportation and use in metallurgical industry; (iii) Iron Ore contain foreign material called gangue in the form of mud and loose earth. During crushing and screening the mud and loose earth attached to the ore get crushed with the ore and grinded and blown away with the wind and thereby satisfy t....

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....' and 'removal of foreign matters', there cannot be any concentration. 12.1. As per Technical Literature Beneficiation consists of following processes: - "1.4.2 Beneficiation Methods (i) milling (crushing and grinding); (ii) washing; (iii) filtration; (iv) sorting; (v) sizing; (vi) gravity concentration and/or, (vii) magnetic separation and/or; (viii) flotation; and/or (ix) agglomeration (pelletizing, sintering, briquetting, or nodulizing). 12.2. We find that the Circular No. 332/1/2012-TRU dated 17-02-2012 also clarified that in Concentration, processes of (i) milling, (ii) hydraulic separation (iii) magnetic separation (iv) floatation (v) concentrate thickening are undertaken. In the present case, we find that there is no evidence available on record to conclude that the appellant has undertaken the above processes. 12.3. We also take note of the fact that the Ministry of Mines, Govt. of India vide Office Memorandum No. 1712/2012-MV dated 25-01-2012 has clarified that no special treatment is involved in Crushing & Screening of Run of Mines (ROM) to lumps and Fines and the Lumps and ....

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.... subclause (zzzy). It is further seen from the agreement that the appellant is required to employ workmen, providing tools etc. and required to undertake mining activity of individual mines. It is also required to undertake all activities in connection with mining of iron ore and pay necessary taxes and duties. The agreement specifically lists out activities like mine development, sizing, crushing and screening of material handling etc. and other allied activities connected with mine and mining operation. It is further seen that the payment for the iron ore fines cleared by the appellant will be received by the mine owner and the appellant's dues to the extent of 95% will be paid by the Mine owner. Subclause (zzzy) of Section 65(105) of the Finance Act, 1994, defines the taxable service under the category of "Mining of Mineral Oil and Gas service" as the service to be provided to any person in relation to mining of mineral oil or gas. It is further seen that the mine owner ("who can be considered as service receiver") pays consideration to the service provider. Consequently, the appellant will be liable to pay service tax on the value of taxable service received by them during the ....