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M/s. Indian Rare Earths Ltd. Versus CCE & ST, BBSR-I

2016 (4) TMI 601 - CESTAT KOLKATA

Manufacture - washing, magnetic separation, gravity separation to remove unwanted matters on sand ores - whether various processes undertaken by the Appellant result into manufacture in view of chapter note 4 to chapter 26 of CETA,1985 inserted w.e.f 01.03.2011,accordingly leviable to duty CETA, 1985? - Held that:- The processes carried out by the Appellant are also included in explaining the term ‘concentration’ under HSN. It is laid down that the physical or physico-chemical operations include .....

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Central Excise, Goa vs. Phill Corporation Ltd. (2008 (2) TMI 3 - Supreme Court of India) that for classification of the manufactured goods, HSN is a safe guide. Therefore, since the processes undertaken by the appellant like washing, magnetic separation, gravity separation to remove unwanted matters on sand ores, and the resultant satisfies the meaning of ‘concentrate’ as explained in the HSN, hence in our considered opinion, it should be considered as ‘manufacture’ as per Sec.2(f)(ii) of CEA,1 .....

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Thus the processes carried out on sand Ores result into conversion of ores to concentrate accordingly manufacture under clause (ii) of section 2(f) read with Chapter Note 4 to chapter 26 of CETA,1985 . The eligibility of benefit of exemption notification 63/ 95 CE dt.16.03.95 be examined by the adjudicating authority. - Appeal No. E-70833/13 - Order No.FO/75215/2016 - Dated:- 29-2-2016 - DR. D.M. MISRA, MEMBER(JUDICIAL) AND H.K.THAKUR, MEMBER(TECHNICAL) For the Petitioner : Shri P.Paranjpe, Ad .....

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Sillimenite, Rutile, Zircon and Garnet falling under chapter heading No.26140020, 26179000, 26170031, 26151000 and 26179000 respectively of the Central Excise Tariff Act, 1985, from the beach sand which they clear without payment of duty. 2.2 The activities/processes undertaken by the appellant comprises of dredging of beach sand. Dredged sand is taken to the beach washing plant (i.e. wet concentrator) where washing through a series of spiral separators, exploit the differences in mineral speci .....

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. Concentrates are passed through the High Heavy Upgradation Plant whereby conducting minerals like Ileminite, Rutile are separated from the non-conducting minerals i.e. Garnet, Silliminite, Monazite and Zircon. Thereafter, the individual minerals are subjected to magnetic separation to separate each other. 2.3 After insertion of Chapter Note 4 to Chapter 26 of CETA, 1985, two show cause cum demand notices dated 16.03.2012 and 22.08.2012 were issued to the appellant alleging that the appellant h .....

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at the processes/activity carried out by the Appellant did not amount to manufacture and the ore sand used as raw materials by the Appellant remained ore (of minerals) and did not bring into existence any concentrates. He submits that since then there has been no change in the process of mineral separation by the Appellant. He has contended that the ratio laid down in the said case was followed by this Tribunal in the case of Classic Microtech (P) Ltd. vs. CCE, Ahmedabad reported in 2012 (285) E .....

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hat no conversion of zircon sand into zirconium concentrate has taken place. In Para 27 of the Order it is stated that the Honble Tribunal decision in the case of Classic Microtech (supra) has been accepted by the department. 3.2 It is further submitted that this Tribunal in case of M/s.Indian Rare Earths Ltd. 2008 (228) ELT 213(Tri.Del.) has held that the resultant minerals sands arising out of the process of their separation from the ordinary sands are not the ore concentrates as the process .....

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trates as defined in explanatory notes of HSN and liable to duty. The Tribunal at para 7 of the judgment observed that removing of foreign matters would not, in the present case, bring into existence a new and different article having distinctive name, character or use. The use of iron ore after the process undertaken by the assessee remains same i.e. to be used in metallurgical industry or the extraction of metal. The Tribunal relied upon its decision reported in Indian Rare Earths case(supra) .....

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ot result in the manufacture of different commercial commodity. The Honble Supreme Court has confirmed the order reported in 2012 (283) ELT A-112(SC) passed by the Tribunal and rejected the Appeals filed by the Revenue. 3.4 It is submitted that the reliance on chapter note 4 of chapter 26 of CETA is misplaced as the basic raw material for the appellants is beach sand covered under chapter sub-heading 25059000 of CETA. It is their submission that since Note 4 is inserted to chapter 26, the same .....

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d 21/22.10.2002 Regional Research Laboratory(CSIR) described the samples to be concentrate. However, on re-examination vide report dated 17.2.2003 they confirm that minerals separated from sand beach have not undergone any crystallographic transformation or chemical changes and appears to be obtained from the raw beach sands by the physical methods of separation. (iii) Opinion of CSIR Institute of Minerals and Material Technology, Bhubaneswar dated 9.9.2013 states that in the separation process .....

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g about any upgradation or augmentation of purity in the mineral sands separated from the ordinary sand. (v) National Institute for Interdisciplinery Science and Technology (NIIST) in their Test report dated 4.7.2014 states that on analysis by optical microspocy and x-ray diffraction studies, there is no change with respect of mineral phase, colour, shape and size in the minerals present in raw sand and HUS output supplied by IREL OSCOM and the individual mineral supplied by them per se. Illemin .....

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inerals Directorate for exploration and research states that based on petrographic studies, XRF and XRD analysis of seven samples received from OSCOM, it is clafified that there is no change in mineralogy or morphology of the minerals present in raw sand, HUS output and samples of individual minerals per se that even after individual separation they remain as ore/mineral that the processes carried out by M/s.IREL involved physical separation of minerals and do not bring about upgradation of puri .....

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matite), rutile, zircon, sillimanite and minute traces of zircon and garnet (almandite). 3.6 The ld. Advocate has submitted that various test reports and the technical opinions indicate that minerals separated from the beach sand are ores and not concentrates. Referring to the meaning of ore prescribed in Note 2 to Chapter 26 of CETA, 1985 and the meaning of concentrate in the HSN Explanatory Notes, it is his contention that the process that carried out does not result into removing part or all .....

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ant s case, the processes carried out by them does not result in removing the foreign metals (to quote) Illeminite and ore of Titanium when cleared from the appellants premises after due processes will still contain foreign materials mainly iron in form of FeO and Fe2O3. Similarly, Zircon ore of Zirconium will have Silica as foreign metal. Thus, the Appellant does not indulge in the process of removing foreign metals from the ore and therefore the process carried in their premises does not bring .....

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at the onus to claim classification of a particular item under a particular entry, is on the department. To support this proposition they have relied upon the following case laws:- (a) Hindusthan Ferodo Ltd.v.CCE-1997 (89) ELT 16(SC) (b) Nanya Imports & Exports Enterprises v. CC - 2006(197)ELT 154(SC) (c) CCE v. Calcutta Steel Industries - 1989 (39) ELT 175 (SC) 3.10 It is their submission that in the present case except for the bald assertions, the department has not been able to rebut fact .....

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lants submits that in the case of Silliminite and Garnet, the same are directly covered under Chapter Sub-heading 25085032 and 25132030 of CETA respectively attracting nil rate of duty. Since these products are directly covered in the given tariff entries and are not used by the industry as such, i.e. without further concentrating, an attempt to classify them under chapter 26 as ores of minerals is not sustainable. These two minerals do not fulfill the requirement for classifying as ores as defi .....

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ed from excise duty when manufactured in a mine. It is submitted that the activity that appellants carried out is indeed in a mine as certified by Govt.of India, Ministry of Labour, Director General of Mines Safety and a certificate dated 28.8.2014 from the Secretary to the Ministry of Labour and Employment, Govt.of India has been produced before this Bench to the said effect. The Ld. Advocate submitted that the said certificate could not be produced before the Ld. Adjudicating authority. 4.1 Th .....

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al operations. (iii) Most important preparatory processes are those aimed at concentrating the ores, (iv) Ores becomes concentrates when the foreign metal embedded/associated to the ore i.e. gangue metals are completely or partly removed by special treatments, (v) Such removal required because such foreign metal might hamper subsequent metallurgical operations. (vi) such removal is also required as it will help for economical transport. 4.3He further submits that the re-examination report date .....

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portation. As such the process undertaken by the Appellant results into emergence of the concentrates from the ore (raw sand beach). In view of this, the said process amounts to manufacture as per chapter note 4 to chapter 26. 4.4The term special treatments to which the ores are subjected to get the concentrates are not defined. However, it is observed that various processes to which the goods falling under chapter 2601 to 2617 are subjected to are mentioned in the HSN explanatory notes such as .....

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nglomerate of various metallurgical product of ore like Ileminite, Sillimenite, Rutile, Zircon and Garnet along with other rock particles like quartz, feldspar, pyroxene, shells fragments (Organic matters) and sline. He submits that the ld.adjudicating authority has observed that the ordinary beach sands contain all these ores/minerals along with other particles and it confirm the definition of ores as per the tariff read with HSN clarificatory notes. The minerals supported their sand beach or .....

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f Star Industries Vs. Commissioner of Customs(Imports),Raigad 2015 (324) ELT 656(SC). 4.7 In response to the argument of the Appellant on the classification of two of the impugned goods i.e. Silleminite and Garnet under chapter 26 of the CETA, 1985, he has submitted that the sub-heading 250850 and 251320 referred to Silleminite and Garnet in different form, but not in the form of ores of Silliminite and Garnet. The chapter 26 deals with different minerals and therefore the impugned ore of Sillim .....

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es into concentrate, hence manufacture in view of chapter note 4 of chapter 26 of CETA,1985. The Ld. A.R has fairly accepted that the Ld. Adjudicating authority has allowed the benefit of exemption Notification No.63/95 CE dt.16.03.1995 to the assessee. The said Order has been accepted by the department as well as the assesse. 4.9As regards the contention of the appellant that they are eligible for exemption under Notification No.63/95-CE dated 16.3.1995, since the goods have been manufactured i .....

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erused the records. The core issue involved in the present case for determination is: whether various processes undertaken by the Appellant result into manufacture in view of chapter note 4 to chapter 26 of CETA,1985 inserted w.e.f 01.03.2011,accordingly leviable to duty CETA, 1985. 5.2 The contention advanced on behalf of the Appellants is that on application of the aforesaid processes to ores , it does not convert/result into concentrates , hence no manufacture is involved and therefore, the r .....

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ed out by the appellant s on the Ore sand, satisfy the meaning of concentrate prescribed in the HSN, accordingly chargeable to duty. 5.3 The contention of the Revenue is that w.e.f. 01.03.2011, the chapter note 4 has been added to chapter 26 which reads as follows:- 4.In relation to products of this Chapter, the process of converting ores into concentrates shall amount to manufacture. 5.4 It is the Revenue s argument that application of various processes to ore sand converts it into concentrates .....

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e processes to sand Ores had not resulted into concentrates, accordingly, no manufacture took place. 5.5 Thus, the sheet anchor of the argument rests on the principle of law laid down in two judgements of this Tribunal, namely Indian Rare Earth Ltd. vs. CCE and CCE vs. SAIL (supra). Before proceeding to analyse and apply the ratio of the said judgments, it is relevant to keep in mind the guidelines laid down by the Honble Supreme Court in this regard. Striking a note of caution against indiscri .....

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ntext. These observations must be read in the context in which they appear to have been stated. Judgments of Courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes. In London Graving .....

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s not to be treated as if it was a statute definition. It will require qualification in new circumstances. Megarry, J in (1971) 1 WLR 1062 observed: One must not, of course, construe even a reserved judgment of Russell L.J. as if it were an Act of Parliament. And, in Herrington v. British Railways Board [1972 (2) WLR 537] Lord Morris said : There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judi .....

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gle significant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cordozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive. ***?????????????***??????????***?? Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side bran .....

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d from the sea beach and sand slurry is subjected to spiraling and as a result the heavier minerals are separated. By this process about 80% of the lighter sand is eliminated, the remaining 20% are brought to the Mineral Separation Plant by pumping the slurry through pipe. There the individual minerals are separated by processes like drying, electro-static separation, magnetic separation and gravity separations. The final recovery of minerals is less than 10% of the sand dredged from the sea of .....

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ea beach is ordinary sand only. Mineral sands constitute less than 10% of the total quantity of sand on the sea beach dredged out by the appellants. Sand as it occurs on the sea shore cannot be called mineral ores. Such sand is also not bought and sold as mineral ores. The processes carried out by the appellants lead to separation of valuable rare mineral sands from the ordinary sand. The processes are physical and mechanical in nature. No special processes including rosting or chemical treatmen .....

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treatment go out of the scope of ores. No such special treatment is carried out in the present case. 9.The Apex Court has held in the case of Hyderabad Industries and Ors. v. Union of India & Ors. that no manufacture of a new or distinct commodity takes place on account of the processes of separation of naturally occurring asbestos from asbestos rocks. In the earlier case of Minerals & Metals Trading Corporation of India Ltd., the Apex Court held that the separating of wolfram ore conce .....

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y sea shore sand. At the end of the processes, the mineral sands do not undergo any transformation. They remain in the same condition in which they remained along with ordinary sand on the sea beach. No upgradation or augmentation of their purity takes place. The chemical structure of the ore remained the same. The processes are not any special treatments which would take the ores out of the stage of plain and simple ores. 10. From what has been stated above, it is clear that no manufacturing is .....

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on such mineral sands extracted by employing the processes listed in the said order. 5.8 The next decision on which heavy reliance was placed is CCE vs. SAIL. In that case the mined Ores were subjected to the process of crushing, grinding, screening and washing. This Tribunal referring to the HSN Explanatory Notes, following its earlier decision in Indian Rare Earth Ltd.s case and other materials recorded as:- 6. We have considered the submissions of both the sides. Heading 26.01 of the Centra .....

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tment. On the other hand the Respondents have contended that the processes undertaken by them do not convert iron ore into iron ore concentrates as no special treatments are undertaken by them nor Fe content increases after the processes undertaken by them. The learned Advocate for the Respondents has emphatically contended that the activities of crushing, grinding, screening and washing do not amount to manufacture of any goods attracting levy of Central Excise duty. It is settled law that the .....

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necessary and there must be transformation; a new and different article must emerge having a distinctive name, character or use. The Supreme Court has laid down a two fold test for determining whether the process is that of manufacture in J.G. Glass Industries Ltd. v. U.O.I., 1998 (97) E.L.T. 5 (S.C.) as under : First, whether by the said process a different commercial commodity comes into existence or whether the identity of the original commodity ceases to exist; Secondly, whether the commodi .....

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of the final product are distinctly different from that of the blasted ore. The Revenue then applying the Explanatory Notes of HSN has come to the conclusion that iron ore has become a new commodity known as iron ore concentrates which is no more exempted from payment of duty as Notification No. 19/88-C.E., dated 1-3-88 has been rescinded by Notification No. 19/96-C.E., dated 23-7-1996. We find ourselves unable to agree with the Revenue that on account of the processes undertaken by the Respond .....

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haracter or use. The use of iron ore as mined or iron ore after the process undertaken by the respondents remains same that is to be used in metallurgical industry for the extraction of metals. In Indian Rare Earths case, supra, the Appellants were removing gangue materials from the sand. It has been held by this Tribunal that at the end of the processes, the mineral sands do not undergo any transformation. They remain the same condition in which they remained along with ordinary sand on the sea .....

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odity with a separate, distinct name having separate physical, chemical composition or characteristic. Similar views were expressed in the case of Seth Liladhar Biyani & Sons v. CCE Jaipur, 2001 (129) E.L.T. 423 (T) relied upon by the learned Advocate. In view of this we hold that the processes undertaken by the Respondents do not result in the manufacture of a different commercial commodity. Hence no Central Excise duty is leviable. Accordingly, all the appeals are rejected. 5.9 It is vehe .....

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Chapter Note 4 to Chapter 26, since the processes employed to ore does not result into concentrate, therefore, the said Chapter Note 4 is not applicable to their case. 5.10.The Revenue on the other hand argued that the Tribunal has not recorded any finding nor required also in these two cases that with application of such processes to ore, whether the Ore is converted into concentrate or other wise, but the question and finding centered around the issue whether the processes of crushing, grindi .....

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eaning and concept of manufacture. Recording reasons at para 9 this Tribunal has held that the principle of law laid down in these two decisions is clear to come to the conclusion that the basic operations carried out to produce usable ore would not amount to manufacture as no new product having distinct name use and character emerged. Proceeding further this Tribunal observed that physical and mechanical process carried out to separate mineral sands from ordinary sea-shore sands no transforma .....

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AIL s case. The Tribunal referring to the Tariff Heading 26.01 as was in force prior to 2005-06 observed that in order to accept the processes of crushing, grinding, screening of ores be called as manufacture , it is necessary that the resultant product should be a new commercial commodity having distinct name character and use, different from the one on which the processes were employed and referred to the classic judgement on manufacture i.e. UOI vs. Delhi Cloth and General Mills - 1977 (1) EL .....

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IL, no new and different article has emerged on which Central Excise duty could be levied and collected. Referring to the meaning of concentrate as in HSN this Tribunal observed that mere removal of foreign matters would not bring into existence a new and different article having a distinctive name, character or use. The use of iron ore as mined or after the process undertaken by M/s.SAIL remains the same, that is, to be used in metallurgical industry for the extraction of metals and finally the .....

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ce not amounting to manufacture . This follows from the issues raised before this Tribunal for determination, and to resolve the issues, the principle of law referred to and followed by the Tribunal. There is no doubt of the fact that in both these cases this Tribunal has been confronted with the sole question whether the processes employed on the Ores would result into manufacture within the meaning and scope of the definition of section 2(f)(i) of Central Excise Act, 1944. Consequently, the Tr .....

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arry weight and accordingly does not impress us. Consequently, it is necessary to examine the issues raised in the present appeals de hors the observations made in the aforesaid decisions of this Tribunal. 5.14 In order to find an answer, whether application of processes to sand Ores results into Ore concentrate it is necessary to understand the meaning of the words, namely, ores & concentrates. 5.15 The ores has been defined under chapter note 2 of Chapter 26 of CETA,1985 which reads as fol .....

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the CETA, but its meaning has been explained in the HSN Explanatory notes along with term ores as:- The term ores applies to metalliferous minerals associated with the substances in which they occur and with which they are extracted from the mine; it also applies to native metals in their gangue (e.g. metalliferous sands). Ores are seldom marketed before preparation for subsequent metallurgical operations. The most important preparatory processes are those aimed at concentrating the ores. For th .....

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the exception of changes resulting from calcinations, roasting or firing (with or without agglomeration), such operations must not alter the chemical composition of the basic compound which furnishes the desired metal. The physical or physico-chemical operations include crushing, grinding, magnetic separation, gravimetric separation, floatation, screening, grading, agglomeration of powders (e.g., by sintering or pelleting) into grains, balls or briquettes (whether or not with the addition of sm .....

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ical methods. First stage Extraction Metallurgy. beneficiation [MET] Improving the chemical or physical properties of an ore so that metal can be recovered at a profit. Also known as mineral dressing. 5.18 After introduction of the chapter note 4 to chapter 26, the Board has issued Circular bearing No.332/1/2012-TRU dated 17.02.2012. In the said Circular at para 3, it is clarified as :- 3. Hence, it is clarified that the levy of excise duty is attracted only in cases where the product meets the .....

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s for extraction of the metal then the resultant is concentrate. It is their further argument that the physical or physico-chemical operations mentioned in the said explanation of concentrates under the HSN include, crushing, grinding, magnetic separation, gravimetric separation, floatation, screening, grading agglomeration of powders etc. . It is the contention of the revenue that on application of any one or more of the processes, which would result in removing a part or all of the foreign mat .....

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01.03.2011. In the said Chapter Note, it has been laid down that process of converting ores into concentrates shall amount to manufacture. The meaning of ores has been laid down in Chapter 2 of the said Chapter 26. The term concentrate is applicable to ores which are made free from impurities through the application of certain processes by which part or all of the foreign matters are removed for the reason that such foreign matter might hamper subsequent metallurgical operations or such foreign .....

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seldom marketed before preparation for subsequent metallurgical operations. Hence, the Ores are to be subjected to special treatment. The Revenue had argued that all the processes narrated under the category of beneficiation or under the HSN need not be applied on the extracted Ore; even if by the application of few processes, with an objective for removal of impurities or for economical transportation, definitely, covered under the scope of concentration . We find force in the contention of the .....

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or other wise as opined in the various test reports of different laboratories. On the contrary, it is safe and prudent to look into the meaning of the concentrate in the HSN in view of the principle laid down by the Hon ble Supreme Court in a catena of cases including in the case of Commissioner of Customs & Central Excise, Goa vs. Phill Corporation Ltd. 2008 (223) ELT 9(SC) that for classification of the manufactured goods, HSN is a safe guide. Therefore, since the processes undertaken by .....

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d down under sec.2(f) of CEA,1944. The processes which are considered not manufacture in the ordinary sense under clause (i), if mentioned in the relevant Section or chapters of CETA,1985 as amounting to manufacture, such processes will fall under the definition of manufacture . 5.23 Needless to emphasize, the Hon ble Apex Court in S.D. Fines Chemical s case 1995 (77) ELT 49 has laid down that if a process is declared as amounting to manufacture under the relevant Chapter Notes or Tariff Heading .....

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ounted to manufacture, are also brought within the purview of and placed within the ambit of the said definition by the Parliament. Not only processes which are incidental and ancillary to the completion of manufactured product but also those processes as are specified in relation to any goods in the section or chapter notes of the Schedule to the Central Excise Tariff Act, 1985 are also brought within the ambit of the definition. 5.24 In the case of O.K Play (India) Ltd. Vs. Commissioner of C.E .....

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ause (ii) simply states that any process, which is specified in section/chapter notes of the Schedule to the Tariff Act shall amount to manufacture. Under Clause (ii), the Legislature intended to levy excise duty on activities that do not result in any new commodity. In other words, if a process is declared as amounting to manufacture in the section or chapter notes, it would come within the definition of manufacture under Section 2(f) and such process would become liable to excise duty. T .....

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s) and solutions; (ii) Blocks of irregular shape, lumps, powders (including moulding powders), granules, flakes and similar bulk forms. Notwithstanding anything contained in?(b) Note 3 to this Chapter, heading Nos. 39.01 to 39.14 shall also include primary forms obtained from conversion of another primary form, falling under the same heading, and such-conversion shall amount to manufacture . 13.Reading Note 6(b), it is clear that blocks and powders are two different primary forms and if the bloc .....

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Customs & Central Excise, Goa vs. Phill Corporation Ltd. 2008 (223) ELT 9(SC), wherein their Lordships observed as follows:- 25.The learned Additional Solicitor General contended that the deeming provision of Section 2(f) (ii) was squarely raised at all levels of the proceedings. In the show cause notice, Section 2(f) has been invoked. Similarly, in the order in original, the Commissioner has categorically relied upon Chapter Note 3 of Chapter 20 and Section 2(f)(ii) and referred to various .....

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was submitted by the learned Additional Solicitor General that the judgment of the Delhi Cloth and General Mills (supra) was rendered on 12-10-1962 much before enactment of the deeming provisions of Section 2(f)(ii). In these circumstances, this judgment can be of no avail to the respondent assessee. 27.The learned Additional Solicitor General further submitted that the learned tribunal in the impugned judgment has not at all considered the effect of section 2(f)(ii) of Chapter Note 3 of Chapter .....

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he parties at length and carefully analysed the judgments cited at the Bar. The Central Excise Tariff Act is broadly based on the system of classification from the International Convention called the Brussels Convention on the Harmonised Commodity Description and Coding System (Harmonised System of Nomenclature) with necessary modifications. HSN contains a list of all the possible goods that are traded (including animals, human hair etc.) and as such the mention of an item has got nothing to do .....

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e classification of the products in question have to be made under Chapter 20. 30.The legal position has been clearly crystallized in S.D. Fine Chemicals Pvt. Ltd. (supra) and other judgments of this court that certain processes which may not otherwise amount to manufacture have been deemed to be manufacture by the Parliament under section 2(f)(ii). Relevant portion of this judgment has already been extracted in the preceding paragraphs. 31.In deciding the cases of this nature, the courts have t .....

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) ELT 656, while considering the eligibility of Notification 4/2006, wherein their Lordships observed as:- 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 .....

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all the consequences thereof, as intended for creating such a legal friction, would automatically follow. Following shall be the inevitable implications : (a) It is to be treated that Molybdenum Ore is different from concentrate. That is inherent in treating the process as manufacture inasmuch as manufacture results in a different commodity from the earlier one. Section 2(f) defines this term as under : manufacture includes any process, - (i) incidental or ancillary to the completion of a manuf .....

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ender the product marketable to the consumer. (b) The purpose of treating concentrate as manufactured product out of ores is to make concentrates as liable for excise duty. Otherwise, there was no reason to deem the process of converting ores into concentrates as manufacture. 29. Once the aforesaid legal repercussions are taken note of, as a fortiori, it becomes obvious that Notification No. 4/2006-C.E. which exempts only ores would not include within itself concentrates also because of the re .....

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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 i .....

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applies and Ores becomes a different product, it ceases to be Ores. 31. We, thus, are of the opinion that in the impugned judgment, the Tribunal has rightly arrived at the conclusion that by virtue of Note 4, concentrate has to be necessarily treated as different from ores which is deemed as manufactured product after Molybdenum Ores underwent the process of roasting. Once we keep in mind that conversion of ores into concentrate is considered as manufacture and, therefore, becomes liable for cen .....

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he assessee but would be given to the Revenue. This principle of strict construction of exemption notification is now deeply ingrained in various judgments of this Court taking this view consistently. 5.27 A cumulative reading of the ratios of the above judgements, the chapter note 4 of chapter 26 and the relevant tariff entry, makes the legislative intention and object clear that the processes which on application on ores held by the courts/tribunal earlier as not amounting to manufacture, by v .....

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efinition of manufacture, in our opinion, is the result of misunderstanding and incorrect interpretation of the relevant tariff entry, the chapter note 4 and clause (ii) of Sec.2(f) of CEA,1944. In view of the judgements of this Tribunal if on application of processes on Ores sand its purity/content increases and its use, commercial identity and character is different from the ore, then the resultant would be considered as manufactured and accordingly dutiable. Therefore, in absence of an incr .....

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llant has submitted that Silliminite and Garnet are directly covered by chapter heading 25085032 and 25132030 of the CETA respectively attracting nil rate of excise duty, We however find that while chapter 25 covers mineral products which are in the crude state or which have been washed, ores of various minerals are covered under chapter 26. We also notice that while chapter 26 excludes the products of chapter 2517 and 2519 no such exclusion is provided in case of chapter 2508 and 2513 and there .....

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