TMI Blog2002 (12) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the Ore only crush and screen the Ore whereby only the size of the iron lumps gets reduced and iron contents do not alter at any time whereas in the case of the Respondents their mining activity is done by fully mechanized system; that they are mining iron ores from mines and then ores are subjected to process of crushing, grinding and screening and washing with a view to remove foreign materials and to concentrate such ores; that the Respondents resorts to washing with an aim to concentrate the ores; that the purpose of washing is to increase the flowability/fluidity of iron ore after it has been mined as mined ore has very little flowability; that at each stage of washing water is added to improve the flowability of material by removing the sticky particles; that the processes undertaken by them definitely involve removal of parts of foreign material from the ores and increase the "Fe" content (i.e. iron content); that goods obtained by such process would qualify as concentrate as defined in the Explanatory Notes of HSN which reads as under : "For the purpose of Headings 26.01 to 26.17, the term ''concentrates" applies to ores which have had part or all of the foreign matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2 The learned Advocate, further, submitted that the Order-in-Appeal in the case of M/s. Essel Mining was accepted by the Department as no Appeal was filed; that the Revenue has filed the present appeals on the ground that M/s. Essel Mining were only indulging in crushing and screening whereas the Respondents are also indulging in washing activity at the mines; that crushing, screening and washing of iron ore are only mining activities; that even after these activities iron ore remains iron ore technically as well as in commercial parlance and there is no manufacture of any new or different goods by reason of the said activities; that National Metallurgical Laboratory, Jamshedpur, in its opinion dated 17-3-1997 has mentioned that crushing, grinding and certain amount of washing are essential to dress the ore and still maintaining its identity as ore. 3.3 He also mentioned that in the Monthly Statistics of Mineral published by the Ministry of Mines, Government of India, these goods are always treated and accepted as iron ore; that as per the said Monthly Statistics, the States wherein iron ore concentrates are manufactured are only Goa and Karnataka; that in the monthly return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellants therein were manufacturing concentrates from ore by removal of foreign matters; that the Tribunal rejected the Department's submissions by holding as under : "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 roasting or chemical treatment are carried out. The processes do not bring about any upgradation or augmentation of purity in the mineral sands separated from ordinary sand. 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." 4.2 Reliance has also been placed on the decision in the case of CCE v. Koimbatore Pioneer Fertilizers Ltd., 1997 (94) E.L.T. 6 (S.C.) wherein it has been held that pulverization of rock phosphate does not amount to manufacture; Divisional Deputy Commissioner v. Bherhaghat Mineral Industries, 2000 (119) E.L.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he entire magnetic content in the slurry is separated out; that the Magnetic concentrates in slurry form finally obtained has got Fe content of about 67%; that SAIL do not follow the aforesaid processes nor they have got any such facilities at their mines. 5. The learned Advocate finally submitted that as per the Explanatory Note of HSN before iron ores can be converted into concentrates, such ores must have had part or all of the foreign matter removed by special treatment; that the said essential pre-requisite of removal of foreign matter by special treatments is not at all satisfied in the present cases; that increase in Fe content of concentrate is obviously contemplated in and in built into the special treatments; that the processes of washing and/or sizing cannot be treated as such special treatments nor the same are undertaken for making any concentrates; that in HSN Notes it has not been stated anywhere that simply by reason of mere washing and/or sizing, iron ores become concentrates. He also mentioned in any case in the facts and circumstances of the case levy of penalty is wholly unwarranted as there is no violation of any of the provisions; that if any duty would have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss." 7. Applying the test laid down by the Apex Court we observe that the process undertaken by the respondents remove extraneous, unwanted material from the ore and as such is devoid of "gangue" which adheres to the blasted ores. From this it has been claimed by the Revenue that the constituents of the final product are distinctly different from that of the blasted ore. The Revenue then applying the Explanatory Notes of HSN has come to the conclusion that iron ore has become a new commodity known as "iron ore concentrates" which is no more exempted from payment of duty as Notification No. 19/88-C.E., dated 1-3-88 has been rescinded by Notification No. 19/96-C.E., dated 23-7-1996. We find ourselves unable to agree with the Revenue that on account of the processes undertaken by the Respondents, a new and different article has emerged on which Central Excise duty can be levied and collected. Even according to HSN the term "concentrates" applies to ores which have had part or all of the foreign matters removed either because such foreign matter might hamper subsequent metallurgical operations or with a view to economical transport. In our view, removing of foreign matters would not, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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