1980 (11) TMI 61 - SC - VAT and Sales Tax

Whether the blending of ore whilst loading it in the ship by means of the mechanical ore-handling plant constituted manufacture or processing of ore for sale within the meaning of Section 8(3)(b) and Rule 13?

Whether the process of mining, conveying the mined ore from the mining site to the riverside, carrying it by barges to the Marmagoa harbour and then blending and loading it into the ship through the mechanical ore-handling plant constituted one integrated process of mining and manufacture or processing of ore for sale, so that the items of goods purchased for use in every phase of this integrated operation could be said to be goods purchased for use in mining and manufacturing or processing of ore for sale falling within the scope and ambit of Section 8(3)(b) and Rule 13?

Held that:- What is produced as a result of blending is commercially the same article, namely, ore, though with different specifications than the ore which is blended and hence it cannot be said that any process of manufacture is involved in blending of ore.

The process of mining comes to an end when ore is extracted from the mines, washed, screened and dressed in the dressing plant and stacked at the mining site and the goods purchased by the assessee for use in the subsequent operations could not therefore be regarded as goods purchased for use 'in mining'. The requirement of Section 8(3)(b) and Rule 13 is that the goods must be purchased for use 'in mining' and not use 'in the business of mining'. It is only the items of goods purchased by the assessee for use in the actual mining operation which are eligible for inclusion in the certificate of registration under this head and these would not include goods purchased by the assessee for use in the operations subsequent to the stacking of the ore at the mining site.

Allow the appeal of the assessee and direct the Sales Tax Officer to examine whether these 14 items of goods the machinery, vehicles, barges and other items of goods purchased by the assessee for use in carrying the mined ore from the mining site to the riverside and from the riverside to the Marmagoa harbour fall within the description of goods intended for use in processing of ore for sale within the meaning of Section 8(3)(b) and Rule 13. If any of these items of goods are purchased by the assessee as being intended for use as "machinery, plant, equipment, tools, spare parts, stores, accessories, fuel or lubricants" in carrying the mined ore from the mining site to the riverside and from the riverside to the Marmagoa harbour, they would qualify for inclusion in the Certificate of Registration.