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TMI Blog2011 (1) TMI 712X X X X Extracts X X X X X X X X Extracts X X X X ..... y under protest. Subsequently, they challenged the assessments before the Commissioner (Appeals). The appellate authority upheld the assessments and rejected the assessee's appeals after holding that the goods exported by them were chargeable to export duty under Heading No. 11 of the Second Schedule to the Customs Tariff Act. The present appeals are directed against the appellate Commissioner's orders. 2. After examining the records and hearing both sides, we note that the appellant has heavily relied on a judgment dated 21-3-1983 of the Hon'ble Bombay High Court (Panaji Bench) in FCA No. 46 of 1978 (The Board of Trustees of the Port of Marmugao v. Chowgule & Co. Pvt. Ltd.). This necessitates a brief historical account. M/s. Chowgule & Co. Pvt. Ltd. had entered into a contract dated 30-3-1959 with the Portuguese Government under a law enacted by the said Government and, accordingly, the company was authorised to install and operate a mechanical ore handling plant at Marmugao harbour and also to export iron ore at concessional rate. The company, accordingly, installed an iron ore pelletisation plant at the harbour in December, 1966 and started exporting iron ore pellets from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ram ore, which was imported by MMTC, was never subjected to any process of roasting or treatment with chemicals for removing impurities. It was held to be wolfram ore concentrate containing 65% WO3, which was of merchantable quality and was commercially known as such. The court further held that the wolfram ore concentrate did not cease to be wolfram ore. On the other hand, the iron ore pellets were obtained by a process involving physico-chemical changes and hence recognizable as a manufactured product different from the ore. The counsel also, contextually, submitted that the appellant was paying Central Excise duty on the pellets cleared for home consumption. The learned counsel submitted that, in the matter of determining whether the iron ore pellets were the same as, or different from, iron ore concentrate, the only method was to apply the trade parlance test particularly when neither the First Schedule to the Customs Tariff Act nor the HSN was aligned with the Second Schedule to the Act. He relied on Camlin Ltd. v. CCE, Mumbai, 2008 (230) E.L.T. 193 (S.C.) in this connection. In that case, it was held that, when the entries in the HSN and the Central Excise Tariff were not ali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be relied upon in the interpretation of the description of goods in the Second Schedule to the Customs Tariff Act. What is export for India is import for another country and, therefore, the same system of classification has to be followed by both exporting and importing countries. In this connection, the learned JCDR argued that the relevant Explanatory Notes in the HSN could be relied upon for ascertaining the scope of description of goods given in the Second Schedule to the Customs Tariff Act. Contextually, he pointed out that, in the case of Collector of Customs v. Lakshmanan Isola Ltd., 1992 (61) E.L.T. 315 (Tribunal), this Tribunal relied on notes to Heading 68.15 of BTN (precursor to HSN) in the context of determining whether mica paper exported by the said company was covered by the description "Mica, including fabricated mica" under Heading No. 8 of the Second Schedule to the Export Tariff for the purpose of levy of export duty. The learned JCDR also relied on the Hon'ble Supreme Court's judgment in Milak Brothers v. Union of India, 1991 (51) E.L.T. 204 (S.C.) wherein the Apex Court, in the context of determining whether the goods exported by the party was dutiable under H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms Tariff Act. It was pointed out that "Iron Ores and Concentrates" of Heading 2601 were divided into "non-agglomerated" (SH 2601 11) and "agglomerated" (SH 2601 12) and that "iron ore pellets" (SH 2601 12 10) were specifically placed under "agglomerated" (SH 2601 12). Iron ore lumps, iron ore fines and iron ore concentrates fell in the non-agglomerated category while iron ore pellets fell in the agglomerated category. The main Heading 2601 (Iron ores and concentrates) covered both non- agglomerated and agglomerated categories including iron ore pellets. Therefore, according to the learned JCDR, the iron ore pellets exported by the appellant came within the coverage of "iron ores and concentrates, all sorts" under Heading No. 11 of the Second Schedule to the Customs Tariff Act. Contextually, it was also pointed out that the very same commodity (iron ore pellets) was classified by the appellant under SH 2601 12 10 of the Schedule to the Central Excise Tariff Act when cleared to the domestic market. 4.2 Referring to the affidavits relied on by the appellant, the learned JCDR submitted that both the affidavits were liable to be rejected as solicited documents. He pointed out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the same expression "all sorts" used in the description of goods under Item 30 (Electric Motors, all sorts) of the Central Excise Tariff was interpreted to mean a group entry covering all types of electric motors. The learned JCDR thus defended the view taken by the Commissioner (Appeals) in this case. He urged that "iron ores and concentrates, all sorts" under Heading No. 11 of the Second Schedule to the Customs Tariff Act be held to include iron ore pellets. 5. We have perused the records and considered the submissions. The question to be settled is whether the iron ore pellets exported by the appellant are classifiable as "iron ores and concentrates, all sorts" under Heading No. 11 of the Second Schedule to the Customs Tariff Act. Keeping in view the elaborate classification of "iron ores and concentrates" in (a) the First Schedule to the Customs Tariff Act, (b) the ITC (HS) Classification of Export and Import Items and (c) the Schedule to the Central Excise Tariff Act, the learned Commissioner (Appeals) examined the scope of the expression "all sorts" and held that "iron ore pellets" could be considered as one sort of "iron ores and concentrates" and hence chargeable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arket to which it is exported and where it is marketed, it is purchased only as groundnuts (or peanuts, as they are called in the U.S.A.). May be there are two different commodities but both are known only as 'groundnuts'. The argument that the scope of the entry should be restricted because of the two-fold classification existing elsewhere between groundnuts as "oil-seeds" and groundnuts as "fruits, nuts and edible substances" does not appeal to us. In the first place, it does not meet the argument that basically both items are only varieties of groundnuts and hence not taken out of the relevant entry. Secondly, there is force in the argument of State counsel that the legislature has deliberately not adopted, for the purposes the Second Schedule, the minute multi classification of the First Schedule and allied classifications. Unlike the Import Tariff, the BTN and the ITC, there is no sub- classification attempted in the export entry. The legislature must be presumed to know that, for import purposes, for instance, groundnuts are classified under different headings with differential rates of duty. Those entries appear not elsewhere but in the First Schedule of the very enactment w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and concentrates, other than roasted iron pyrites : 2601 11 -- Non-agglomerated : 2601 11 10 --- Iron ore lumps (60% Fe or more) 2601 11 20 --- Iron ore lumps (below 60% Fe, including black iron ore containing up to 10% Mn) 2601 11 30 --- Iron ore fines (62% Fe or more) 2601 11 40 --- Iron ore fines (below 62% Fe or more) 2601 11 50 --- Iron ore concentrates 2601 11 90 --- Other 2601 12 -- Agglomerated : 2601 12 10 --- Iron ore pellets 2601 12 90 --- Other 2601 12 00 - Roasted iron pyrites" The above classification clearly shows that iron ore pellets are iron ore in agglomerated form. The literature produced by the learned JCDR says that these pellets are obtained by agglomeration (pelletisation) of iron ore fines into globules with or without addition of additives. Iron ore lumps, iron ore fines and iron ore concentrates are in the non-agglomerated category. Roasted iron pyrites has been placed in a separate class of iron ores and concentrates. All the goods mentioned in column (2) of the above table can appropriately be grouped as "iron ores and concentrates, all sorts" as shown below : Iron ores and concentrates,including roasted ironpyrites &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erric oxide in hydrated form. The appellant has not proved that pelletisation of limonite fines brings about change of ferric oxide to some other chemical substance. On the other hand, in the appellant's own case [Mandovi Pellets v. Union of India & Others] 1989 (2) LLJ 364-BOM, it was observed by the Bombay High Court that iron ore pelletisation was merely dressing of the fine powdery iron ore so that the ore could be handled more effectively. In the result, iron ore remains iron ore even after pelletisation of its fines. If iron ore fines belong to the class of "iron ores and concentrates, all sorts" under Heading No. 11 of the Second Schedule to the CTA vide Notification No. 62/2007-Cus., so do iron ore pellets. 6. The learned counsel argued that, as duty of excise was levied on the pellets cleared by the appellant for home consumption, the department treated pelletisation of iron ore as a process of manufacture and therefore the pellets were to be recognized as a commodity different from iron ore for the present purpose also. This argument is specious but not acceptable as the basis of levy of export duty under the Customs Act is different from that of levy of excise duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of technological developments on interpretation of terms used in fiscal legislation. Here's an excerpt from para (7) of its judgment : "In the case of Porritts & Spencer (Asia) Ltd. v. State of Haryana reported in 42 S.T.C. 433 the Supreme Court was required to consider the interpretation of the term 'textiles'. The Supreme Court observed that in interpreting any word in an entry, one should bear in mind that it does not embody a static concept. It is the skin of a living thought, and may change its hue with new developments in technology and emergence of new items and processes. A term in a fiscal legislation should be interpreted having regard to newly developing materials, methods, techniques and processes. It held that the concept of "textiles" was not a static concept. It had, having regard to newly developing materials, methods, techniques and processes a continually expanding content and new kinds of fabric may be invented which may legitimately, without doing any violence to the language, be regarded as "textiles". In the same manner, milk in powder form can be looked upon as a result of this continually evolving technology. There is no reason why it should be excluded ..... X X X X Extracts X X X X X X X X Extracts X X X X
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