TMI Blog2017 (11) TMI 489X X X X Extracts X X X X X X X X Extracts X X X X ..... n Minerals Book as well as the license given by the Department of Atomic Energy for operating mines, that all the operations are subject to strict control of these Departments of Government of India. Therefore, it is apt to refer to such documents to decide the meaning of the word beneficiated - in terms of Rule 70 of Mineral Concession Rules, sand used for metallurgical process will not be treated as a minor mineral. In the present case the sand being used for metallurgical process is not therefore a minor mineral and does not fall under the exclusion clause 2(iv) of the Mineral Conservation and Development Rules. In any case, Ilmenite is the goods in question here and not the sand. Ilmenite is rare earth mineral. Even the Press Information Bureau of Ministry of Mines note dated 12.08.2015 fixing royalty rates, refers to Ilmenite as a major mineral. Hence, contrary to the reasoning of Revenue, the definition of beneficiation as given in Rule 3(d) of the Rules does apply - Board Circular 332/1/2012-TRU dated 17.2.2012 also clarifies that by beneficiation process the end product of ore is concentrate or upgraded ore with regard to the Chapter notes of Chapter 26 - the order passed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s issue stands settled in favour of Sh. P.S. Pruthi in view of the judgement of Delhi High Court in the case of Union of India vs Ramesh Nair. He further stated that Sh. P.S. Pruthi, an ex-officer of Indian Revenue service worked in various senior positions and retired as Chief Commissioner of Chandigarh Zone of Central Excise and Service Tax in January, 2014. Thereafter, he joined CESTAT(Mumbai) as Member(Technical) on 26.05.2014 and remained on probation till he retired on 12-10-2016. The advocate also placed on record a copy of letter dated 29-06-2017 received from Registrar, CESTAT, New Delhi which affirmed that Shri P.S. Pruthi was not confirmed as Member. 2. We have considered the submissions of learned Counsel and observe that Section 35Q of Central Excise Act,1944 read with Central Excise( Appeals) Rules interalia permits ex-employees of Department of Customs and Central Excise or Narcotics to appear as authorized representative of the appellants before appellate authorities provided they had retired or resigned from such employment after having rendered service in any capacity in one or more of the said departments for not less than ten years in the aggregate. Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal referred to an order of ITAT Delhi ('B' Bench) Special Bench reported as (2009)120 ITD wherein it was held that Members of ITAT are debarred from appearing before ITAT only after retirement from service of the Tribunal and such conditions are not made applicable to a member discharged from service during the period of probation. Thus, on the basis of the aforesaid decisions the Tribunal, with regard to issues (i) and (ii), held that a member of the Tribunal discharged from service during probation period may not be debarred from practicing before it and provisions of Section 129(6) of the Act would be applicable only to such members who cease to hold office only after their confirmation. It was further held that the phrase 'on ceasing to hold office as Member' used in section 129 (6) of the Act would not include discharge of probationer and only a Member who is confirmed to hold office in such capacity can be said to have ceased to hold the same. Since a probationer does not acquire any lien on the post of Member before its confirmation, there is no question of his ceasing to hold the same......................... 27. The challenge to the vires of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by Revenue. The second set of appeals by the appellant M/sTrimex Sands Pvt Ltd Appeal Nos C/30774-30776/2017-CU(DB)are against the rejection of their refund claims by the Commissioner (Appeals)under Order No.VIZ-000-APP-009 to 011-17-18 dt 31/05/2017. The refund claims were filed by the appellant on account of change in classification sought in respect of the Ilmenite Ore exported by them. 8. On 13th September, when the second set of appeals came up for hearing, the consultant representative of the appellant mentioned that the issue of classification under 26140020 was not challenged by the Revenue in the order passed by the Commissioner (Appeals) rejecting the refund claims. The refund claims were rejected on other grounds. However the Bench observed that without deciding the issue of classification in the first appeal, a conclusion arrived in the second appeals could result in an incongruous situation. Therefore, with the consent of both sides,both appeals were taken up for hearing on 15/09/2017. Appeal No E/30911/2016-EX[DB] of 22/11/2016 9. The respondent are manufacturer and exporters of processed Ilmenite. The dispute is about classification of their product-- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2/2015. And the said Rules do not apply to minor minerals.The fourth contention is that various documents such as DCW Limited (one of the biggest exporters of beneficiated ilmenite) website, M/s Cochin Minerals and Rutile Limited website, DGFT SION norms, article by Dr. CK Gupta in his book Chemical Metallurgy all describe beneficiated ilmenite as synthetic rutile which contains a high percentage of Titanium Dioxide but the processed sand made by the respondent does not.The last contention is that the Commissioner (Appeals) relied on the case of M/s VV Minerals without the finality of the case law. 12. Respondent's contention is that they realized their inadvertent mistake of wrong classification when the case of VV Minerals came to their knowledge. There is no estopple to classification. Revenue is taking contradictory stands. On the one hand it is claimed that Beach sand is not an ore and on the other hand, in Para 5 of the grounds of appeal, the process employed by Trimex is detailed wherein Ilmenite of 7% to 9% is upgraded to Ilmenite of 96% to 97%. In Para 5.1 of the ground of appeal itself states that the process carried out leads to separation of Ilmenite ore. Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hopper, the raw sand is conveyed through a belt conveyor to a mixing chamber, where the raw sand is added with water to make it into slurry; The mixed slurry is fed into a rotating screen called trommel for giving a uniform feed less than 1mm size by removing the trash and oversize materials; The screened raw sand is collected in a surge bin below the trommel and pumped through the slurry pump to a set of spirals termed as rougher spirals. In rougher spirals, the raw sand is processed and the % of ilmenite content in the concentrate is upgraded to 36%-38% from 8-10% ilmenite in the raw / unprocessed ilmenite, utilising the specific gravity difference between the ilmenite and quartz; The middling fraction from the rougher spirals is treated with mids-scavenger spirals for further recovery of ilmenite into concentrate. The tailings from rougher spirals and mids-scavenger spirals is pumped back to the mined out areas; The concentrate from the rougher spirals and the mids-scavenger is further beneficiated in another set of spirals termed as 'cleaner spirals'. In this process the ilmenite content in the concentrate is upgraded to 52-55% from 36-38% in the fee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has been upgraded from 58-60% in the feed; and Rutile content is increased to 5% from 2% in the feed. The non-conducting portion having Zircon content is increased to 10% to 12% from 1.8% in the feed. The middling fraction from the primary HT separators is further processed in another set of high tension roll separators termed as secondary HT separators for further recovery of ilmenite into conducting fraction; The non-conducting fraction from the primary and secondary HT separators are further processed in a set of rare earth roll (RER) magnetic separators to recover misplaced ilmenite in the non-conducting fraction; The combined material of conduction fraction from primary and secondary HT separators and the magnetic fraction from RER is further beneficiated in rare earth drum magnetic separators. The magnetic fraction is collected as ilmenite product having more than 96% pure ilmenite and the non-magnetic portion is final Rutile mineral of 94%.Thus the ilmenite is upgraded to above 96%. 17. With the process undertaken described above, we may now see the relevant entries under Chap26 in the Tariff: 261400 - Titanium Ores and Concentrates 2614 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The coarse material i.e. size from 13 mm to 0.5 mm is treated in dense media cyclone where, less than 0.5mm 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 (with moisture). Hence the output is more than the input of raw coal. Beneficiation process results in Cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction is made between naturally occurring rutile and synthetic rutile in the Heading for Rutile . 20. To support their contention, Revenue has relied on the case of M/s Gujarat State Fertilizers Co. Ltd., Vs. Collector of C. Ex., Vadodara (reported in 1996 (83) ELT 624(Tribunal) to support that classification should be decided only by relevant Headings and Section notes and relevant judgments. We find that the decision of Commissioner (Appeals) is in fact based on the relevant headings and is supported by Tata Steel judgement. Revenue has also relied upon Ponds India Ltd. Vs. Commissioner of Trade Tax, Lucknow-2008(227) ELT 497 (SC) to express an opinion that when an entry has been interpreted consistently for several years, ordinarily it would not be permissible for the Revenue to depart therefrom. We have read this judgment. It relates to the issue whether petroleum jelly is a drug or a cosmetic. The issue was discussed at length and on merits it was held that there is no need to change the classification from 'drug' to 'cosmetic'. An observation was indeed made in the judgement regarding consistency of assessment. But we find the judgment never express ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India would be valuable. It is seen from the same Indian Minerals Book as well as the license given by the Department of Atomic Energy for operating mines, that all the operations are subject to strict control of these Departments of Government of India. Therefore, it is apt to refer to such documents to decide the meaning of the word beneficiated . Rule 3(d) of the Mineral Conservation and Development Rules, 1988 define beneficiation as beneficiation means processing 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 This is precisely the process undertaken by the appellant. Revenue has contended in para 4 of the grounds of appeal that this definition does not apply because the goods in question is a minor mineral to which the said Rules do not apply by virtue of exclusion clause in Rule 2(iv) of chapter 1 of the Rules. We find that in terms of Rule 70 of Mineral Concession Rules, sand used for metallurgical process will not be treated as a minor mineral. In the present case the sand being used for metallurgical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... process, the unprocessed ore becomes upgraded Ilmenite and hence, the impugned goods shall be classified under tariff item 26140020 as ilmenite upgraded (Beneficiated ilmenite) and chargeable to export duty at the rate of five percent. 26. In addition to our findings in paras above, we find the dictum of VV Minerals is squarely applicable in the present matter before us. 27. Accordingly, the impugned order is upheld and Revenue's appeal is rejected. Appeal Nos C/30774-30776/2017-CU(DB) The appeals arise from Order in appeal No.VIZ-CUSTOM-APP-009 to 011-17-18 dated 31/05/2017 under which the Commissioner (Appeals) upheld the order of adjudicating authority who rejected the refund amounts of ₹ 1,43,93,974/-,Rs 2,34,68,983 and ₹ 7,34,95,348 respectively,under three separate orders. 2. The facts are recapitulated as follows. The appellant exported Ilmenite under various shipping bills from December 2014 to May 2015. The shipping bills were assessed provisionally, as per practice, awaiting the finalization of the quantities and value of the goods exported. They were finalized later on confirmation of the quantities exported. The classification of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions would apply in Customs cases also. 5. The first contention of the appellant is that their shipping bills were finalized only on the issue of weight and value. The consequent duty short paid was made up by them. However, no order was passed on the classification issue which they had challenged in their letter dated 6-11-2015 to Commissioner Customs (as mentioned in para 2 above) and therefore the provisional assessments being provisional for all purposes, any order finalizing the assessments without finalization of classification is not sustainable. It was also contended that in the case of Aman Medical Products Ltd. Vs. Commissioner - 2010(250) ELT 30 (Del.) , the Delhi High Court had held that the judgments of Priya Blue Industries and Flock India will not apply when there is no lis pending between the parties.Various judgments were also referred to by the appellant in their favour.It was also argued that, in any case, Section 27 of the Customs Act dealing with refunds was amended in 2011. In view of such amendment the ratio of Priya Blue and Flock India does not apply. 6. We have carefully considered the submissions made by both sides and the law on this issue. 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT order dated 25/08/2016 in Appeal No. C/209/2006 Hyderabad Bench in M/s Nikhil Refineries Ltd. Vs. Commissioner Vijayawada. In cited case the assessment was finalized based on ship ullage. But the party had earlier claimed that the duty should be paid only on shore tank basis. CESTAT held that refund is admissible even if there was no challenge to the assessment order on the Bill of Entry. We note that in the present appeal, the appellant had sought change in classification vide letter dated 6-11-2015 addressed to Commissioner Customs and also before the Assistant Commissioner Central Excise vide letter dated 23-11-2015. In other words, there was challenge to the rate of duty even if there was no appeal against the assessment order finalizing the Shipping Bills.But no action was taken by Customs on the letter dt 6-11-2015. B. CESTAT order in case of Ruchi Infrastructure Ltd.;Bangalore Bench- 2008 (224) ELT 477 (Tri Bang.) Upheld by High Court of Andhra Pradesh- 2015 (317) ELT A214 (AP) C. CESTAT order dated 22/03/2016 in Shyam Solvex (I) Pvt. Ltd vs. Commissioner Hyderabad in Appeal No C/28528/2013. It was held that It is the contention of Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de and the refund claim stands allowed and the appeal also stands allowed. F. M/s Asia Pacific Commodities Ltd., Vs AC 2012 (280) ELT 481 (A.P) , wherein the Hon ble High Court of Andhra Pradesh held that 31. In case an exporter/importer or a customs agent parts with customs duty under an Act which is no more in force or the duty is paid excessively than at required rate or duty is paid wrongly, is there any necessity for the person to file an appeal. In case he makes an application for refund under Section 27 of the Act and customs officials themselves find merit in the claim and allow, is it necessary to file appeal against such order which has been accepted as one where excess amount of duty is paid, In our considered opinion there is no such necessity to file an appeal and without there being an appeal, refund claim is maintainable and if the persons make out a case such refund claim ought to be allowed. The customs officials or the CESTAT cannot deny the refund when there is nothing adverse to the person who paid the customs tariff. We are supported in this view by the decisions of the Supreme Court in Flock India and Priya Blue on which the Senior Standing Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
