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2016 (4) TMI 602 - AT - Central ExciseManufacture - application of processes of crushing, grinding, washing, grading etc. to Iron Ores - whether the processes of crushing, grinding, screening, grading etc. resulted into 'manufacture' as defined under Sec2(f)(i) of CEA,1944 as no new commercial commodity came into existence as a result of such process? - Held that:- It is relevant to adopt the meaning of concentration and Levy of royalty under the Mines and Minerals(Regulation and Development Act),1957 and the Rules made thereunder to arrive at the conclusion that processes resulted into manufacture and the resultant product is "iron Ore concentrate" and chargeable duty. On the contrary, it is safe and prudent to look into the meaning of the concentrate in the HSN than to Mines and Minerals(Regulation and Development Act),1957 and the Rules made thereunder in view of the principle laid down by the Hon'ble Supreme Court in a catena of cases including in the case of Commissioner of Customs & Central Excise, Goa vs. Phill Corporation Ltd. (2008 (2) TMI 3 - Supreme Court of India) that for classification of the manufactured goods, HSN is a safe guide. Therefore, since the processes undertaken by the appellant on ores, and the resultant satisfies the meaning of 'concentrate' as explained in the HSN, hence in our considered opinion, it should be considered as "manufacture" as per Sec.2(f)(ii) of CEA,1944 in view of the chapter note 2 of Chapter 26 of CETA,1985 and the resultant Iron Ore concentrate is dutiable. There is a significant difference between clause(i) and clause(ii) of the definition of 'manufacture laid down under sec.2(f) of CEA,1944. The processes which are considered not manufacture in the ordinary sense under clause (i), if mentioned in the relevant Section or chapters of CETA,1985 as amounting to manufacture, such processes will fall under the definition of 'manufacture'. The broad and detail tariff entry has been introduced with effect from 2005-06 classifying ores having different Fe content assigning different sub-headings. Therefore, in absence of an increase in the Fe content by benefication or any other method, if there cannot be a manufacturing process, the chapter note 4 inserted with effect from 01.3. 2011 defeat the very purposes and becomes otiose. Such a situation, in our opinion, cannot be the intention of the legislature. Therefore, in our considered opinion application of processes of crushing, grinding, screening and washing and grading of iron ore, converts it into iron ore concentrates and accordingly in view of the chapter note 4 of chapter 26 becomes manufacture and leviable to Excise duty.
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