TMI Blog2015 (10) TMI 2261X X X X Extracts X X X X X X X X Extracts X X X X ..... l is filed against OIA dt. 31.3.2013 passed by Commissioner (Appeals), Trichy. 2. The brief facts of the case are that appellants are a registered EOU and manufacturer and exporter of processed Ilmenite. They had filed shipping bills for export of Ilmenite upgraded (processed) by classifying them under chapter Heading No.26140020 of Customs Tariff Act, 1975 and paid duty @ 5% in terms of Notification No.15/2013-Cus. dt. 1.3.2013. Prior to 8.3.2013, the appellants claimed classification under Chapter Heading 26140010 whereas subsequently they sought for reclassification under 26140020. The adjudicating authority in terms of OIO dt. 18.4.2013 finally assessed all the 85 shipping bills and ordered for classifying the goods under CTH 26140010 as Ilmenite unprocessed as per Section 18 of the Customs Act. Against this, appellant preferred appeal and Commissioner (Appeals) in the impugned order rejected the appeal and upheld the OIO. Hence the present appeal. 3. Learned Senior Counsel Shri S. Venkatraman appearing for the appellants explained the brief background of the various process involved in the export of Ilmenite upgraded ore and also submitted a detailed written submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hemical reactions involved during this beneficiation process. He also relied the Patna High Court decision in the case of Indian Aluinium Company Ltd. and Another Vs State of Bihar Ors. 1994 (1)PLJR 122 where the Hon ble High Court has referred to the definition of beneficiation as provided under Mineral Conservation and Development Rules 1998. The High Court has dealt with process of beneficiation and clearly explained beneficiation which does not require for roasting and chemical process. Further, he relied Board s circular dt. 17.2.2012 enclosed in Annexure IV of the Paper Book. He submits that the Board has categorically clarified that no special treatment is involved in the crushing and screening of ores and the end product can be termed as a concentrate only when the grade of ore is sufficiently improved through beneficiation. He submits that in view of Board s circular and the Supreme Court s citation referred to above, the product Ilmenite is described by process of beneficiation and this does not involve any chemical change or chemical reaction and through the process of beneficiation the resultant product is Ilmenite Upgraded Ore called Ilmenite Beneficiated . 5. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that both the Supreme Court orders referred to above and the Board s circular had clarified that the word beneficiation which is not related to any single ore and accepted the process of beneficiation. He submits that the Supreme Court relied on Encyclopaedia Britannica for the definition of beneficiation . He also countered that enrichment of ore is not the criteria, beneficiation is only upgraded and not enriched. The department relied on roasting and calcinations and acid treatment which results in production of Synthetic Rutile and not upgraded Ilmenite. 8. We have carefully considered the submissions of both sides and examined the records. The short issue in the instant appeal is related to classification dispute of the exported goods as to whether the Ore Ilmenite is classifiable under Chapter sub heading 26140020 or under chapter sub heading 26140010 of CTH. On perusal of OIO passed by the adjudicating authority, we find that he had passed the order only on classification and finalised all the 85 shipping bills and there is no demand of export duty. There is no dispute in the fact that the appellant is an EOU had set up plant for processing of ore and regularly exportin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eficiation process. In the absence of any definition of word beneficiation in the Chapter 26 of the CTH, the definition provided in the other enactments becomes relevant. Rule 3 (d) of Mineral Conservation and Development Rules 1988 defines beneficiation , The said rule is reproduced as under: 4.5 Mineral Conservation and Development Rules, 1988. 3. Definitions. In these rules, unless the context otherwise requires 3(d) beneficiation means process of minerals or ores for the purpose of (i) Regulating the size of a desired produce ; (ii) Removing unwanted constituents and (iii) improving quality, purity or assay grade of desired product. The above statutory definition of beneficiation is for 3 purposes either for regulating the size of desired produce or removing unwanted materials for the purpose of easy transportation and also for improving the quality, purity of the product. Anyone or all the 3 activities carried out on ore/mineral is known as beneficiation . On perusal of flow chart of various process of beneficiation plant of the appellant which is duly approved by Ministry of Mines Department of Atomic Energy clearly confirm the appellant s carrying out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... So, before beneficiation, the raw coal is crushed into size below 13 mm at Coal Handling Plant (Crushing Plant). The coarse material i.e. size from 13 mm to 0.5 mm is treated in dense media cyclone whereas, less than0.5 mm is treated by froth floatation method. As beneficiation is a wet process hence, it increases the moisture percentage of beneficiated coal by around 8% to 15%. After beneficiation, apart from the clean coal (required in Blast furnace for Steel making), we also get Coal by-products named as, middling (ash 40-45%), Tailings (ash 40-45%) and Rejects (ash 60-65%). The product quantity after beneficiation process gets increased due to wet process by adding moisture into the output, shown by an example below- Production (Extraction): The basis figure of production of 100 tonnes of ROM coal has been taken. Therefore, Quantity produced (Extracted) : = 100 tonnes Beneficiation : The products are dewatered but still the surface moisture gets adhered to the product generated. The beneficiation is a wet process i.e. raw coal mass flows through different process in slurry form. Output is measured on wet process because it is transported on wet basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate as per HSN Notes, that is, ores which have had part or all of the foreign matter removed by special treatments either because such foreign matter may hamper subsequent metallurgical operations or with a view to economical transport. The above clarification covers the appellant s export product which is covered under 2614. The above circular and the ratio of the Hon ble Apex Court and High Court decisions (supra) are squarely applicable to the present case. The department relying on the Tribunal decision in the case of Kerala Minerals Metals Ltd. (supra) is on the manufacture and excisability of the product and not on beneficiation or classification. The same is not applicable to the present case as the issue here is on charging export duty on Ilmenite Upgraded (beneficiated). The definition of beneficiation given in Mineral Conservation and Development Rules, 1988 is more authentic than the website literature relied by department. Both Apex Court decision and High Court decision on beneficiation are applicable to the present case. While classifying the goods whether for import or export the descriptions used in the chapter headings and subheadings are to be literally ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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