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TMI Blog2015 (10) TMI 1288X X X X Extracts X X X X X X X X Extracts X X X X ..... exempted from payment of excise duty. One of the items described in this notification is 'Ores' which is mentioned at Sl. No.4 and the excise duty payable is Nil. In case, the aforesaid goods imported by the assessee, namely, 'Ore Concentrate' falls within the aforesaid entry, as a fortiori, no CVD would be payable on the import of this item. The question, therefore, that arises is as to whether the 'Ore Concentrate' imported by the assessee is eligible for complete exemption from payment of additional duty of custom/CVD under Notification No.4/2006-CE dated March 01, 2006. The answer to the aforesaid question would depend upon the answer to another incidental question, namely, whether the 'Ore Concentrate' imported by the assessee can be treated as 'Ores' mentioned in Notification No.4/2006. To put it otherwise, whether Molybdenum Ore after it undergoes the process of being roasted and comes to be known as Ore Concentrate still remains Ores. 3. Before we attempt to answer the aforesaid question(s), we deem it apposite to visit those fundamental facts that will have bearing on the issue involved. 4. The assessee has been regularly importin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Notification 4/2006-CE, Shri Khandelwal stated that since ores include concentrates, he had claimed the exemption. He also agreed to pay the CVD involved in respect of the imports made under the aforesaid Bills of Entry. The seized goods valued at Rs. 6,12,60,943/- were released provisionally to the assessee on execution of a bond for the said value and bank guarantee of Rs. 61,26,200/-. The assessee also paid the differential duty of Rs. 66,61,664/- on October 04, 2011. The investigation further revealed that the assessee had imported identical goods earlier also under 14 B/Es by declaring the goods as 'Molybdenum Ore/Roasted Molybdenum Ore' and availing CVD exemption totally amounting to Rs. 3,10,73,035/- during the period March, 2011 to July, 2011. 6. The Department, thereafter, issued a show cause notice dated March 09, 2012 to the assessee proposing to confiscate 59,000 kgs. of Roasted Molybdenum Ore Concentrate seized on September 26, 2011 valued at Rs. 6,12,61,048/- and 275000 kgs. of the said goods valued at Rs. 28,57,49,418/- imported earlier under 14 Bills of Entry, under the provisions of Sections 111(d) and 111(m) of the Customs Act, 1962. The notice also p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from September 02, 1998 to October, 1999. The issue was identical inasmuch as there also the importer had imported Molybdenum Concentrate and claimed benefit of exemption Notification No. 5/1998-CE which was prevalent at the material time and it exempted 'Ore' vide Sl. No.10 of the said notification from payment of excise duty. There also the adjudicating authority had taken the view that after the Molybdenum Ore was subjected to the process of Concentratic and Roasting it had become a different product, namely, Molybdenum Oxide and did not remain 'Ore' and, therefore, was not entitled to the benefit of exemption notification which applied only to the commodity 'Ore'. In an appeal, however, same Mumbai Bench of CESTAT set aside the order of the adjudicating authority holding that even after Molybdenum Ore had undergone the process of Roasting, it remained Ore and there was no difference between Ore and Concentrate which were one and the same product. We would like to mention that though we have dismissed the appeal of the Revenue against the aforesaid order of the CESTAT on the ground that the tax effect involved in the said appeal is negligible, it would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing or sub-heading or tariff item of the First Schedule Description of excisable goods Rate Condition No. 4. 2601 to 2617 Ores Nil - We would like to point out that the amendment which was carried out in the year 2011 basically related to addition of Chapter Note 4 as per which the process of converting Ores into Concentrates is treated as 'manufacture'. 14. Having taken note of the relevant statutory/legal provisions, we revert back to the orders passed by the CESTAT in M/s. Hindustan Gas and Industries Limited case. While discussing this decision of the CESTAT, it is to be borne in mind that Chapter Note 4 was not there at the relevant time when this decision was rendered in December, 2006. 15. It is settled position that for the purpose of determining the levy of CVD under Section 3 of the Customs Tariff Act, it is to be deemed that the product that was imported was manufactured in India and thereafter rate of central excise duty leviable thereupon is to be determined. That duty becomes the CVD i.e. the additional duty on the import of the item. This position stands settled by the Constitution Bench judgment of this Court in Hyderabad Industries Limited and an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating of wolfram ore from the rock to make it usable ore is a process of selective mining. It is not a manufacturing process. The important test is that the chemical structure of the ore should remain the same. Whether the ore imported is in powder or granule form is wholly immaterial. What has been to be seen is what is meant in international trade and in the market by wolfram ore containing 60% ore more WO3. On that there is a preponderation weight of authority both of exports and books and of writings on the subject which show that wolfram ore when detached and taken out from the rock in which it is embedded either by crushing the rock and sorting out pieces of wolfram or by washing or magnetic separation and other similar and necessary process it becomes treated with any chemical it cannot be classified as process". 18. The Tribunal also took note of some more judgments wherein removal of impurities from a mined product was not treated as manufacturing process. On that basis, the Tribunal came to the conclusion that roasting of an ore, to obtain concentrate, does not amount to manufacture, as it only removed the impurities and the recoverable content of metal oxide is enhance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .10. Therefore, concentrate in question when it satisfies and is covered under term 'ore' as given in Chapter Note 2. The above definition of 'ore' mentioned in Note 2 of Chapter 26 will also apply to appearing in S. No. 10 of Notification No. 5/98-CE." 20. As per the aforesaid decision of the Tribunal which had followed judgment of this Court in MMTC, roasting of ore and thereby removing the impurities from the ore made the ore known as concentrate but it was still covered by the genus ore and concentrate was only a specie of this genus. This process did not amount to any manufacture and, therefore, no new item, commercially known, come into existence. 21. Mr. Adhyaru, learned senior counsel appearing for the Revenue submitted that the aforesaid decision was rendered in the context of unamended Chapter 26 and this was before the addition of Chapter Note 4. He pointed out that judgment in MMTC was also of the same vintage. According to him, addition of Note 4 to Chapter 26 made fundamental difference, thereby, rendering the decision of MMTC and the aforesaid decision of CESTAT in M/s. Hindustan Gas and Industries Limited inoperative for the purposes of present ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ron ore lumps, iron ore fines and iron ore concentrates. From the above structure, it is clear that the use of the expression 'ores and concentrates' and provision of separate sub-headings of ores and concentrates wherever necessary, implies that the legislature consciously made a distinction between 'ores' on the one hand and 'concentrates' on the other. The preposition "and" between the two terms is conjunctive. If the legislative intention is that ores and concentrates are one and the same, then the legislature would have used the expression "ores and concentrates." In the book Principles of Statutory Interpretation, 12th Edition 2010, Justice G.P. Singh at pages 477 and 478 has written as under: "Conjunctive and Disjunctive Words 'OR' and 'AND' The word 'or' is normally disjunctive and 'and' is normally conjunctive but at times they are read as vice versa to give effect to the manifest intention of the Legislature as disclosed from the context. (Ishwar Singh Bindra v. State of U.P., AIR 1968 SC 360, p. 363 : (1980) 1 SCC 158; R.S. Nayak v. A.R. Antulay (1984) 2 SCC 183, pp. 224, 225 : AIR 1984 SC 684; M. Satyan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise levy. 24. The endeavour of Mr. Lakshmikumaran, learned counsel appearing for the assessee, on the other hand, was to demonstrate that addition of Note 4 had not made any difference to the legal position. He submitted that the basic concept underlined in MMTC case remained the same which was that ore is genus and concentrate is only a specie and, therefore, even if it is now to be treated as 'manufacture', still for the purpose of applying exemption notification concentrate would still be covered by umbrella term, 'ore' of which it was a specie. He reiterated that roasting of ore was only to remove impurities so that it could be used in the manufacture of Ferro-Alloys. He also argued that even 'roasted ore' was in Chapter Heading 26 and the process, as defined in the technical dictionaries, makes it only an enriched ore. He further argued that Chapter Note 2, which was the basis of decision in the case of M/s. Hindustan Gas and Industries Limited still occupies the field in the statute book, viz., Chapter 26 and reading thereof makes it amply clear that ore and concentrate are one and the same product. He submitted that in the impugned order, the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are removed and the recoverable content of metal oxide is enhanced. In support, reference was made to Kirk-Othmer's Encyclopedia of Chemical Technology. Likewise, in MMTC case as well, which was relied upon by the Tribunal, this Court had held that Wolfram Concentrate which was having minimum 65% Tungsten Oxide was still an ore and classifiable under Item 26. Thus, the decision in Hindustan Gas primarily rested on the reasoning that roasting of an ore to obtain concentrate would not amount to manufacture and ore and concentrate are one and the same inasmuch as concentrate remains ore and only impurities are removed therefrom. On this premise, it was held that ore is genus and concentrate is a specie thereof. 28. According to us, it is very clear from the reading of the judgment in Hindustan Gas case that basic and the common thread which runs throughout the decision is that subjecting ore to the process of roasting does not amount to manufacture. This very basis gets knocked off with the amendment carried out in the year 2011 with the insertion of Note 4. Note 4 now categorically mentions that the process of converting ores into concentrates would amount to 'manufacture&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of heading 2844 or of the metals of Section XIV or XV, even if they are intended for non-metallurgical purposes. As per this note, metals of Section XV would be included in the term 'ores'. However, after the insertion of Chapter Note 4, these two Notes, namely, Note 2 and Note 4 have to be read harmoniously. If we accept the submission of the learned counsel for the assessee predicated on Note 2, then Note 4 even after its conscious inclusion, would be rendered otiose which cannot be countenanced. Therefore, Note 2, when seen along with Note 4, has to govern itself in limited territory. On the basis of deeming fiction created by Note 4, once we arrive at the conclusion that process of roasting of Ore amounts to manufacture and it creates a different product known as Concentrate, for the purpose of exemption notification, which exempts only 'Ores' it is not possible to hold that Concentrate will still be covered by the exemption notification. Therefore, harmonious construction of Note 2 and Note 4 would lead us to hold that in those cases when Note 4 applies and Ores becomes a different product, it ceases to be Ores. 31. We, thus, are of the opinion that in the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation has to be interpreted in the light of the words employed by it and not on any other basis. This was so held in the context of the principle that in a taxing statute, there is no room for any intendment, that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification, i.e., by the plain terms of the exemption." 33. Without multiplying the case-law, we refer to the latest judgment of this Court in IVRCL Infrastructure & Projects Ltd. v. Commissioner of Customs, Chennai 2015 (319) ELT 194 (SC) wherein this principle is reiterated in the following manner: "4. ...We have heard learned Counsel for the parties. We find that the first argument made by Shri Lakshmikumaran can be disposed of immediately. The subject matter before us is an exemption notification issued under Section 25 of the Customs Act, 1962. The interpretative notes that have been referred to by Shri Lakshmikumaran are in the Customs Tariff Act. Note 2(a) referred to by Shri Lakshmikumaran reads as follows: "2.(a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at such plant in its entirety must be imported albeit in an unassembled form. Judged by this test, it is clear that the concurrent findings of fact of the Commissioner and the CESTAT requires no interference by the Court inasmuch as both authorities have held that a complete plant in an unassembled form has not in fact been imported..." 34. The Tribunal in the impugned judgment has also examined the issue keeping in view the objective behind the levy of CVD. Such a discussion proceeds as under: "It will be useful at this juncture to examine the object of levy of additional Customs duty (CVD). This issue was examined at great length by this Court in the case of Hyderabad Industries Ltd. v. Union of India 1999 (108) ELT 321 (SC) and this Court held as follows: "15. The Customs Tariff Act, 1975 was preceded by the Indian Tariff Act, 1934. Section 2A of the Tariff Act, 1934 provided for levy of countervailing duty. This section stipulated that any article which was imported into India shall be liable to customs duty equal to the excise duty for the time being leviable on a like article if produced or manufactured in India. In the notes to clauses to the Customs Tariff Bill 1975 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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