TaxTMI 
TaxTMI 
2026 (4) TMI 450
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....emption Notification No.04/2006-CE dt.01.03.2006. The Bills of Entry were provisionally assessed in terms of section 18 of the Customs Act, 1962, and the exemption was allowed by the department. On 05.11.2012, the department has issued SCN proposing to classify the goods as 'Manganese Concentrate' and sought documents from the appellant to show that the subject goods have not been processed after mining. On adjudication, the Original Authority finalized the provisional assessment and held that imported goods are not ores but concentrates and hence not entitled for exemption under Notification 04/2006 and confirmed the recovery of CVD. Being aggrieved by the OIO, the appellants filed appeal before Commissioner (Appeals), who has upheld the OIO and confirmed the recovery of CVD, against which the appellants are in appeal before the Tribunal. 3. No one was present for the appellant to argue the matter on several hearings in the past. No one was present for the appellant even on the date of final hearing. Therefore, we heard the learned AR and perused the records. 4. The appellant submits has mainly submitted that they had furnished all the requisite documents including certifica....
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....itted that ores undergo processes normal to metallurgical industry, whereas, concentrates are the ores which have undergone special treatments. Reliance was placed on Circular F.No.556/52/200-CX dt.30.10.2000, which has described in detail the process in which Ore is converted into Concentrate in context of Zirconium Ore. It provides that the concentrate making is not mere crushing and sizing and a lot of grinding slurry making and magnetic separation is involved. 7. The appellant has further relied on order of Coordinate Bench in the case of Classic Microtech Pvt Ltd Vs CC, Ahmedabad [2012 (285) ELT 418 (Tri-Ahmd)], wherein, the reliance has been placed in the case of Indian Rare Earths Ltd [2002 (139) ELT 352 (Tri-Kolkata)]. The relevant portion is reproduced below. "9. ..........Thus, the principle of law is clear that basic operations carried out to produce usable ore would not amount to manufacture of a new product. In the instant case, the appellants are carrying out certain physical and mechanical processes to separate mineral sands from ordinary sea shore sand. At the end of the processes, the mineral sands do not undergo any transformation. They remain in the s....
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....r the process of converting ores into concentrate shall amount to 'manufacture'. He has further submitted that in any case of naturally occurring ores, a process of 'beneficiation' of preparation has to be carried out either to enrich the ore content by way of removal of foreign or unwanted elements, or to enrich metal content in the ore. Those processes can be physical, physio-chemical, etc., and includes processes like crushing, grinding, magnetic separation, screening, grading, etc. 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. 11. In this case, admittedly, the ore has been supplied in terms of contract and certain specifications stipulated by the appellants. 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 appellants. Even crushing....
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.... treating the process as 'manufacture' inasmuch as manufacture results in a different commodity from the earlier one. Section 2(f) defines this term as under : "manufacture" includes any process, - (i) incidental or ancillary to the completion of a manufactured product; (ii) which is specified in relation to any goods in the Section or Chapter notes of the First Schedule to the Central Excise Tariff Act, 1985 (5 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 N....
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....onsidered only in terms of Board's circular dt.17.01.2012. However, on crucial analysis and plain reading of explanatory note, it is obvious that any activity, which is carried out on the ROM ore with an intent to remove foreign matters, either partially or fully, so as to make it useful for metallurgical purposes or for economic transport, the said process itself would amount to conversion and therefore, the said activities, per se, will 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. Theref....
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....gone similar processes when imported would also be not entitled to CVD exemption. We also find force in the citations of the learned AR in the case of Beach Minerals Company Vs CC, Tuticorin [2023 (9) CENTAX 148 (Tri-Mad)]. In this case, it was the case of the department that the appellants have not undertaken any beneficiation process to make the mined sand into processed/upgraded Ilmenite. The Tribunal relied on the definition of the word '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....
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....ds that beneficiated ore should be high % of TiO2 which is 'Synthetic Rutile'. We find that the classification of 'Rutile' is separately classified under CH 2614 00 31. Therefore, the department's contention for classifying under Chapter 2614 00 10 is not based on valid reasons and relying another firm's website details cannot be taken as authentic evidence. It might be the process undertaken by the said company. 12. The Hon'ble Supreme 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 ....
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....ter during wet beneficiation, the summation of beneficiated coal product quantity is higher than fed ROM coal quantity." The Apex Court in the above decision clearly spelt out that beneficiation processes are only related to physical separation. The ratio of the Apex Court decision though it was held with respect to coal, the same squarely is applicable to the present case as the principle of beneficiation is same. Further 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 in....
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....able to appropriate export duty and not under 2614 00 10 of CTH. 13. Accordingly, the impugned order is set aside and the appeal is allowed with consequential benefit." 26. Thereafter, the Tribunal held that goods, which were upgraded/ processed Ilmenite are classifiable under 2614 00 20 and set aside the Revenue appeal. Therefore, in this case also, simple physical process of segregating or washing certain foreign 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 es....