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V.V. Minerals Versus Commissioner of Customs, Tuticorin

2015 (10) TMI 2261 - CESTAT CHENNAI

Classification of Ilmenite upgraded - Classification claimed initially under Chapter Heading 26140010; reclassification claimed under 26140020 – Department contented for classifying under Chapter 26140010.

Held That:- Department's contention for classifying under Chapter 26140010 is not based on valid reasons and relying another firm's website details is not authentic evidence - Definition of beneficiation given in Mineral Conservation and Development Rules, 1988 is more authentic tha .....

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ugan, AC (AR) ORDER Per R. Periasami The appeal 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, t .....

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sent 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 with case laws and reiterated the same. He submits that appellants are exporting Ilmenite upgraded and the issue in this appeal is of classification goods exported whether Ilmenite, unprocessed" falling under 26140010 or Ilmenite, upgraded (beneficiated I .....

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t table dryer and electro static separator for removal of other minerals and on-magnetic heavies and obtain Ilmenite, garnet, Rutile and Zircon. From the above process results in Ilmenite Ore where the Ilmenite bearing sand is being removed. He also submits that these processes are both physical and mechanical in nature. He drew our attention to photographs of the entire processing plant starting from mining of raw sand, washing of raw sand in spiral plant, drying of washed ore, Electro Magnetic .....

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s of beneficiation. 4. He drew our attention to Hon ble Supreme Court judgement in the case of National Mineral Development Corporation Vs State of M.P. - 2004 (6) SCC 281 where the Supreme Court had discussed upgrading of ores (beneficiation). He also relied Hon ble Supreme Court judgement in the case of Tata Steel Ltd. Vs UOI 2015 (3) SCALE 759. The Supreme Court at page 26 of the above judgement explained the coal beneficiation. The Supreme Court concluded that beneficiation process or physic .....

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igh 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 subm .....

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Ltd. Vs CCE 2007 (214) ELT 556 (T) and Indian Rare Earth s Ltd. Vs CCE 2002 (139) ET 352 which are not applicable and not relatable to the present case as in those cases, what was before the Tribunal was the issue of manufacture and excisability under section 2 (f) of Central Excise Act not the issue of beneficiation . Further the department relying website details of Kerala Minerals Ltd. is beneficiation-related where the ore undergoes the process of roasting and chemical treatment and after i .....

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ioxide. He also submits that the department cannot take a plea that prior to 2003 the appellant themselves classified under 26140010. The appellant is free to revise classification as different rates prescribed on export goods both unprocessed and processed. 6. On the other hand, Ld. A.R on behalf of Revenue reiterated the findings of OIO and the impugned order. He submits that beneficiation process is different for each ore. What is beneficiation for coal cannot be compared to beneficiation for .....

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following case laws :- (i) Kerala Minerals and Metals Ltd. Vs CCE 2007 (214) ET 556 (Tri.) (ii) Indian Rare Earths Ltd. Vs CCE 2002 (139) ELT 352 (Tri-Kolkata) 7. Ld. Senior Advocate in his rejoinder countered the arguments and submits 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 Bri .....

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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 exporting Ilmenite in the past as there was no export duty and classificatio .....

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that the goods are rightly classifiable under CH 26140010 as Ilmenite upgraded (Beneficiated) whereas the Revenue choose to classify the goods under Ch 26140010 as Ilmenite unprocessed. It was brought to our notice that the department insisted on higher rate of duty and the appellant paid export duty @ 10% under protest for all the regular exports. 9. On perusal of original adjudication order wherein he recorded the various processes undertaken by the appellant plant from raw beach sand to Ilmen .....

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26 of CTA which is reproduced as under :- 2614 00 - Titanium Ores and Concentrates 26140010 - Ilmenite unprocessed 26140020 - Ilmenite upgraded (beneficiated Ilmenite including Ilmenite ground) - Rutile : 26140031 - Rare earth oxides including rutile sand 26140039 - Other 26140090 - Other It is seen from the above classification, there are only two (3 -) sub headings under major heading CH 2614 - Titanium Ores & Concentrates. CH 261400100 - Ilmenite Unprocessed and CH 26140020 - Ilmenite upg .....

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elopment 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 ei .....

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r Rule 3 (d) of Mineral Conservation and Development Rules. By this process the unprocessed ore becomes upgraded Ilmenite. 11. We have also seen the sample of both unprocessed and the final product i.e. upgraded Ilmenite and perused the certificate dt. 1.3.2013 issued by the Department of Geology & Mines, Govt of Tamil Nadu which clearly confirms that appellants are licensed by the Government of Tamil Nadu to export processed/upgraded Ilmenite. Both adjudicating authority and the LAA relied .....

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details cannot be taken as authentic evidence. It might be the process undertaken by the said company. 12. The Hon ble Supreme Court in the case of Tata Steel & Others Vs UOI (supra) while discussing the entitlement of refund of royalty on the Mines & Minerals has discussed the beneficiation and the benefits. The relevant paragraphs of Apex Court is reproduced as under :- 26. The question that, therefore, arises is what is the consequence of beneficiation Very briefly, the consequence o .....

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M coal of various seams at coal mine is fed into the Coal washery (Beneficiation plant) for beneficiation so that the final clean coal product has ash of below 15% (Steel Grade coal). For coal beneficiation, gravity separation methods for coarser (size 13 mm to 0.5 mm) material and froth floatation method for finer material (size < 0.5mm) are done. 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 fro .....

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ed 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 i .....

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s. Referring below a flow chart [not relevant] ..... From the quantity related table, it is also quite evident that due to addition of water during wet beneficiation, the summation of beneficiated coal product quantity is higher than fed ROM coal quantity. The Apex court in the above decision clearly spelt out that beneficiation processes are only related to physical separation. The ratio of the Apex Court decision though it was held with respect to coal, the same squarely is applicable to the p .....

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re is concentrate or upgraded ore. The extract of circular is reproduced as under :- From the above definition, it is clear that removal of part or all of foreign material is envisaged for conversion of ores into concentrates. Ministry of Mines have clarified that no special treatment is involved in the crushing and screening of ore and the end-product can be termed as a concentrate only when the grade of ore is sufficiently improved through beneficiation. Federation of Indian Mineral Industries .....

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