AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (3) TMI 346
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....s unconditionally exempt from payment of excise duty under Notification No. 4/2006-CE dated 01.03.2006 which exempts ores of Chapter Headings 2601 to 2617 of the First Schedule to the Central Excise Tariff Act, 1985 ('CETA') from the payment of excise duty. 4. Vide the Union Budget of 2011-12, Chapter Note 4 was inserted in Chapter 26 of the First Schedule to the CETA which stated that process of converting ores to concentrates will amount to manufacture. 5. Pursuant to insertion of the said Chapter Note, investigation was initiated by the Department into the processes undertaken by the Appellant and an opinion was framed that the activities of crushing and screening of extracted iron ores amount to manufacture of iron ore concentrates. Accordingly, multiple communications were issued by the Department directing to obtain central excise registration and pay applicable duties, which were duly rebutted by the Appellant. 6. The investigation initiated by the Department culminated into issuance of underlying SCNs vide which demand totalling to Rs. 68,50,06,529/- for a cumulative period of March 2011 to November 2014 was proposed. 7. The said demand was adjudicated by Ld. Co....
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....d process should not attract the deeming fiction of manufacture under Chapter Note 4 to Chapter 26. Along with the representation letter, a certificate dated 09.11.2011 obtained from a reputed mining Company, MBE Coal & Mineral Technology India Private Limited was also submitted which stated as follows: "a) In case of Direct Shippable Ore (DSO) which doesn't reguire any beneficiation techniques and plant mainly contains Crushing and Screening, the total yield of plant will be 100% and the chemical characteristics of Feed Materialand the Product will be 100% same. b) In case of Concentration/ Beneficiation, the process requires liberation of mineral particle from gangue by means of Gravitational, Magnetic and other techniques." 14. Thereafter, letter dated 25.01.2012 was issued by the Ministry of Mines to the Ministry of Finance clarifying that mere activities of crushing and screening of iron ore will not amount to concentration for levy of excise duty and seeking issuance of suitable guidelines in this regard. 15. Subsequently, the Tax Research Unit of the Department of Revenue, Ministry of Finance, issued a clarification vide F. No. 332/1/2012-TRU, dated 1....
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....td., 2007 (209) E.L.T. 5 (SC). Therefore, the impugned order dated 30.11.2015 issued by the Ld. Commissioner (Rourkela), ignoring the above-mentioned clarification, is legally untenable and liable to be set aside. 17. Further, he relied on the Kirk-Othmer's Encyclopedia of Chemical Technology, Fifth Edition, Vol.14, which states as follows: "High grade ore, containing over 60% total iron, can be used as direct shipping ore (DSO) and normally is sized at 6-40mm. High Grade ore fines, in a size ranging of less than 6mm, can be sold as sinter feed or further ground and agglomerated into pellets. Low grade iron ore must be ground to an acceptable size (to liberate gangue components) followed by concentration." 18. Furthermore, as per Kirk-Othmer's Encyclopedia of Chemical Technology, Fifth Edition, Vol. 16, Page 127 & 128[Pg. no.38-40 of the Compilation], 'Concentrates' and 'Ores' are described as follows: "Concentrate an action to intensify in strength or purity by the removal of valueless or unneeded constituents, i.e. separation or ore or metal from its containing rock or earth. The concentration of ores always proceeds by steps or stages. Liberation of miner....
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.... ore obtained after employing the processes of crushing and screening are either sent for manufacture of dutiable goods at the Appellant's steel plant located in Raigarh. Hence, even if it is assumed but not admitted that the demand confirmed vide the impugned order is sustainable, even then the demand is liable to be set aside on the ground of revenue neutrality. 26. The Appellant humbly submits that the amount demanded by the Department on sized iron ores sent to the Appellant's steel plant at Raigarh plant for manufacture of dutiable goods, if paid, shall be eligible as credit to the Raigarh Plant. 27. Hence, the duty demand confirmed against the Appellant vide the impugned order is clearly revenue neutral and therefore the demand does not survive for this reason also. 28. He also relied on the judgment passed by Hon'ble CESTAT, Kolkata in the Appellant's own case in Excise Appeal No. 75563 of 2018, Final Order No. 75043 / 2026 dated 09.01.2026. 29. It is humbly submitted that this Hon'ble Tribunal in the case of M/s Steel Authority of India Limited v. Commissioner of Central Excise & Service Tax, Ranchi-I, [Final Order No. 75642/2025 dated 06.03.2025 passed in Excis....
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....nd shall not sustain. 35. Hence, the demand confirmed in the present case is liable to be set aside on this ground as well. 36. Demand confirmed invoking extended period of limitation is unsustainable. 37. The Appellant humbly submits that the demand for the period February 2012 to January 2014 has been proposed vide SCN dated 25.02.2015 by invoking extended period of limitation when SCN for identical issue for the period March 2011 to January 2012 was already raised within the limitation period. 38. In this regard, he also relied on the judgment of Nizam Sugar Factory v. CCE, A.P. 2006 (197) E.L.T. 465 (S.C.), wherein it has been held that the extended period cannot be invoked for subsequent period involving identical issue. 39. In view of the above, it is humbly submitted that the demand confirmed for the period February 2012 to January 2014 invoking extended period of limitation is time barred and the impugned order is, therefore, liable to be set aside. 40. Further, the demand for the period February 2012 to January 2014 is also liable to be set aside as the issue is purely interpretational and it is a settled position of law that extended period of limitation....
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....ew that the processes of crushing and screening, which cannot remove foreign matter and cannot enhance ferrous content cannot be termed as a process of "concentration" and does not amount to any "special treatment". It is to be noted that processes of crushing and screening are primarily processes of size reduction and separation. Thus, without employment of 'special treatment' 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 (1) 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) (pelletizing, sintering, agglomeration 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 ca....
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....the said activity is liable to Service Tax and does not amount to 'manufacture'. For the sake of ready reference, paragraphs 6 and 7 of the said order are reproduced below: - "6. From the perusal of the salient features of the agreement, it is evident that the nature of activity carried out by the appellant for the mine owner is covered by the definition of mining service under Section 65(105) sub-clause (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. Sub-clause (zzzy) of Section 65(105) of the Finance Act, 1994, defines the....