Custom, Excise & Service Tax Tribunal
Girija Smelters Limited vs Visakhapatnam-I on 27 January, 2026
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C/30660-30662/2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
HYDERABAD
Division Bench - Court No. - I
Customs Appeal No. 30660 of 2016
(Arising out of Order-in- Appeal No.1 to 3/2016-VCH dt.28.04.2016 passed by Principal
Commissioner of Customs, Central Excise & Service Tax (Appeals), Visakhapatnam)
M/s Gayatri Minerals Pvt Ltd
WBIIDC Growth Center, Bishnupur, ......Appellant
Bankura, West Bengal - 722 122
VERSUS
Commissioner of Customs
Visakhapatnam - I
4th Floor, Customs House, Port Area,
......Respondent
Visakhapatnam, Andhra Pradesh - 530 035
WITH
Customs Appeal No. 30661 of 2016
(Arising out of Order-in- Appeal No.1 to 3/2016-VCH dt.28.04.2016 passed by Principal
Commissioner of Customs, Central Excise & Service Tax (Appeals), Visakhapatnam)
M/s Girija Alloy & Power (I) Pvt Ltd
Survey No.162 & 153, ADB Road, Peddapuram, ......Appellant
East Godavari Dist., Andhra Pradesh - 533 437
VERSUS
Commissioner of Customs
Visakhapatnam - I
4th Floor, Customs House, Port Area,
......Respondent
Visakhapatnam, Andhra Pradesh - 530 035
AND
Customs Appeal No. 30662 of 2016
(Arising out of Order-in- Appeal No.1 to 3/2016-VCH dt.28.04.2016 passed by Principal
Commissioner of Customs, Central Excise & Service Tax (Appeals), Visakhapatnam)
M/s Girija Smelters Ltd
Plot No.276 & 277, Sector-C, Urla Industrial Area, ......Appellant
Raipur, Chhattisgarh - 493 221
VERSUS
Commissioner of Customs
Visakhapatnam - I
4th Floor, Customs House, Port Area,
......Respondent
Visakhapatnam, Andhra Pradesh - 530 035
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Appearance:-
Ms. Nandita Reddy, Advocate for the Appellants.
Shri A. Rangadham & Shri V.R. Pavan Kumar, ARs for the Respondent.
Coram: HON'BLE MR. A.K. JYOTISHI, MEMBER (TECHNICAL)
HON'BLE MR. ANGAD PRASAD, MEMBER (JUDICIAL)
FINAL ORDER No. A/30050-30052/2026
Date of Hearing: 06.10.2025
Date of Decision: 27.01.2026
[Order per: ANGAD PRASAD]
M/s Gayatri Minerals Pvt Ltd, M/s Girija Alloys & Power (I) Pvt Ltd &
M/s Girija Smelters Ltd (hereinafter referred to as the appellants) are in
appeal against common OIA dt.28.04.2016, whereby, the Commissioner
(Appeals) has rejected the appeals filed by the appellants and denied them
the benefit of exemption from payment of CVD in terms of S.No.12/2012-CE
dt.17.03.2012 on the ground that imported goods are not 'Manganese Ores'
as the said goods have undergone washing, removal of waste and sizing and
therefore, are 'Manganese Concentrates'.
2. The brief facts of the case are that the appellants imported
'Manganese Ore' by classifying the same under Tariff item 2602 00 20,
which covers 'Manganese Ore (44% or more but below 46%)', claiming
exemption from payment of CVD in terms of S.No.56 of Notification
No.12/2012-CE dt.17.03.2012. The Bills of Entry were provisionally
assessed in terms of section 18(1) of the Customs Act, 1962 and the
exemption was extended on submission of PD Bond. On adjudication, the
Original Authority denied the exemption benefit and held that since the
imported Manganese Ore has been subjected to the process of converting
ore into concentrate, the goods lose their identity as ores by virtue of
Chapter Note 4 to Chapter 26. But the Original Authority has not dispute the
classification under declared tariff item. Thereafter, Commissioner (Appeals)
passed stay order dt.06.01.2014 directing the appellants to pay 50% of duty
demanded within three weeks of receipt of said order and granting them
waiver of balance dues, subject to such pre-deposit. Subsequently, OIA
dt.07.02.2014 was passed rejecting the appeal filed by the appellants for
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non-compliance of stay order without dealing with merits of the case. The
appellants deposited the requisite amount as per stay order and filed
appeals before Bangalore Bench of the Tribunal, wherein the matter was
remanded back to the Commissioner (Appeals) to decide the matter on
merits in view of the amount deposited by the appellants. After going
through the submissions and merits of the case, the common OIA
(impugned order) was passed rejecting the appeals filed by the appellants
and denying them the benefit of exemption on the ground that imported
goods are not 'Manganese Ores' as the said goods have undergone washing,
removal of waste and sizing and therefore, are 'Manganese Concentrates'.
3. Learned Advocate for the appellants has mainly submitted that the
Customs department has accepted the documents, which were furnished in
support of the imported Manganese Ore and the Original Authority as well as
the Commissioner (Appeals) has not rejected the classification of the
imported Ore under Tariff 2602 00 20 and 2602 00 10, which by name and
description covers 'Manganese Ore (44% or more but below 46%)' and
'Manganese Ore (46% or more)'. Manganese Ore depending upon the
Manganese content is classifiable under Tariff items 2602 00 10 to 2602 00
50, whereas the concentrates are classifiable under Tariff item 2602 00 90
under 'others'. She has further submitted that with respect to the imported
consignments, no sample has been drawn and no testing has been done and
further, the expert opinion has been ignored by the authorities, which is
incorrect and bad in law. There is no allegation in the present appeals that
the imported goods have been subjected to any special treatment and they
were only subjected to crushing, screening, sizing processes, which
admittedly are not considered as special treatment for conversion of ores
into concentrate as clarified by CBIC Circular dt.17.01.2012.
4. She has relied on HSN explanatory notes to Chapter 26, which
provides the meaning of the term 'ore' and 'concentrate'. The relevant
portion is as under.
"The term 'ore' 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.
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For the purposes of headings 26.01 to 26.17, the term 'concentrates'
applies to ores which have had part or all of the foreign matter removed
by special treatments, either because such foreign matter might hamper
subsequent metallurgical operations or with a view to economical
transport.
Processes to which products of headings 26.01 to 26.17 may have been
submitted include physical, physico-chemical or chemical operations
provided they are normal to the preparation of the ores for extraction of
metal. With the exception of changes resulting from calcination, 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, flotation, screening,
grading, agglomeration of powder (e.g., by sintering or pelleting) into
grains, balls or briquettes (whether or not with the addition of small
quantities of binders), drying, calcination, roasting to oxidise or
magnetize the ore, etc., (but not roasting for purposes of sulphating,
chloridating, etc.)"
5. In view of the above, learned Advocate has submitted that ores
undergo processes normal to metallurgical industry, whereas, concentrates
are the ores which have undergone special treatments. She has also relied
on Circular F.No.332/1/2012-TRU dt.17.01.2012. The relevant paras of the
circular are as under.
"For the purposes of Headings 2601-2617, the term 'concentrates'
applies to ores which have had part or all of the foreign matter removed
by special treatments, either because such foreign matter might hamper
subsequent metallurgical operations or with a view to economical
transport.
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 have also pointed out that several
processes (in addition to crushing and screening) such as milling,
hydraulic separation, magnetic separation, flotation & concentrate
thickening have to be undertaken for ores to be converted into
concentrate.
3. Hence it is clarified that the levy of excise duty is attracted only
in cases where the products meet the definition of concentrate 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'."
6. The above circular was issued pursuant to introduction of Chapter
Note 4 to Chapter 26 and it clearly clarifies that no special treatment is
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involved in crushing and screening of ore and the said circular is binding on
the department, as held by Hon'ble Supreme Court in the case of Paper
Products Vs CCE [1999 (112) ELT 765 (SC)]. Further, taking into account
the said circular, the Coordinate Benches in series of decisions extended
benefit of exemption in cases where ores are subjected to only washing,
crushing and screening processes and it was also held that these processes
will not be considered as special treatment and the imported goods will be
considered as ores only and not concentrate. They have relied on the
following judgments.
a) Andhra Ferro Alloys Vs Visakhapatnam-Cus [2017 (8) TMI 89 -
CESTAT Hyderabad]
b) Sharp Ferro Alloys Vs CCT, Visakhapatnam-GST [Final Order No.
A/30299/2024 dt.09.05.2024]
c) CC Vs Mahendra Kumar Darewala [2016 (340) ELT 277 (Tri-Mum)]
d) Universal Electrical Industries Vs CCE [1994 (70) ELT 279 (Tri) -
Affirmed by Hon'ble Supreme Court at [2003 (153) ELT 266 (SC)]
e) CC (Port) Vs BDG Metal & Power Ltd [Final Order No.77586/2023
dt.22.11.2023 - CESTAT Kolkata]
f) Endeka Ceramics India Vs CC [2021 (10) TMI 251]
g) Amba River Coke Vs CC [2022 (6) TMI 217]
h) Vishwa Glass & Ceramics Vs CC [2024 (11) TMI 843]
i) Supreme Glazes Pvt Ltd [OIO No.05/ADC/AV/HAZIRA (IMPORT)/2024-
25 dt.04.02.2025]
j) Krishna Ceracoats Industries [OIO No. 09/ADC/AB/HAZIRA (IMPORT)/
2024-25 dt.27.02.2025]
7. Learned Advocate has also relied on the BIS standard i.e., IS
11895:2006, prescribing specification for Manganese ore where specification
for different types of Manganese ores has been provided and in respect of
Manganese ore, the minimum content of Manganese is 35% and above,
which is applicable to the present case and therefore, their product is
Manganese ore and not Manganese concentrate. She has also highlighted
the term 'concentrate' and 'ore' defined in Kirk-Othmer's Encyclopedia of
Chemical Technology, as under.
'Concentrate' - An action to intensify in strength or purity by the
removal of valueless or unneeded constituents, i.e., separation of core or
metal from its containing rock or earth. The concentration of ores always
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proceeds by steps or stages. Liberation of mineral values is often the
initial step. Concentrate also means a product of concentration i.e.,
enriched ore after removal of waste in a beneficiation mill.
'Ore' - A mineral or aggregate of minerals from which a valuable
constituent, especially a metal, can be extracted profitably.
8. She has also relied on the judgment of Hon'ble Supreme Court in the
case of Mineral and Metals Trading Corporation of India Vs UOI [1983 (13)
ELT 1542 (SC)], wherein, inter alia, it was held that concentrate would also
get covered in the expression 'ore'. Similarly, she has also relied on the
judgment of Coordinate Bench in the case of CC Vs Hindustan Gas and
Industries [2006 (202) ELT 693 (Tri-Mum)], wherein, eligibility of imported
'molybdenum concentrates' to avail Additional Duty of Customs (ADC)
exemption benefit in terms of Notification No.05/1998-CE dt.02.06.1998
was examined and it was concluded that concentrates satisfy all the
requirements of being called an ore. She has also submitted that reliance
placed on Note (4) to Chapter 26 is bad in law in view of Circular
No.09/2012-Cus dt.23.03.2012, wherein, it was clarified that concentrate
suffers Central Excise duty being a manufactured product. Similarly, she has
also submitted that interest cannot be demanded relying on the judgment of
Hon'ble Bombay High Court in the case of Mahindra & Mahindra Ltd Vs UOI
[2022 (10) TMI 212 (Bom)], wherein, it was held that in the absence of
specific provisions for levying of interest or penalty due to delayed payment
of tax, the same cannot be levied/charged unless the statute makes a
substantive provision in this behalf. This judgment was affirmed by the
Hon'ble Supreme Court at [2023 (8) TMI 135 (SC)]. She has also relied on
the order of Coordinate Bench in the case of Acer India Vs CC [2024-VIL-
503-CESTAT-CHE-CU]. Further, the interest cannot be demanded when the
BEs have been provisionally assessed. In this regard, she has relied on the
following judgments.
a) AS Syndicate (Warehousing) Vs CC [2011 (267) ELT 469]
b) CC Vs Exotic Fashions [2010 (262) ELT 651]
9. On the other hand, learned AR has submitted that benefit of
exemption notification has been rightly denied to the importers/appellants
as the Manganese ores imported by them had admittedly undergone certain
specified processes like washing, removal of waste, sizing, etc., as per the
requirements of the appellant/importer. Further, in terms of provisions
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under Note (4) to Chapter 26, w.e.f. 01.03.2011, it provides that in relation
to products of this chapter the process of converting ores into concentrate
shall amount to 'manufacture'. He has further submitted that in any case of
naturally occurring ores, a process of 'beneficiation' of preparation has to be
carried out either to enrich the ore content by way of removal of foreign or
unwanted elements, or to enrich metal content in the ore. Those processes
can be physical, physio-chemical, etc., and includes processes like crushing,
grinding, magnetic separation, screening, grading, etc. In view of the clear-
cut deeming provisions, there is no need to conduct any test or analysis of
the product in question. Thus, the onus of proving the eligibility for availing
exemption under a notification lies with the importer as held in various
judicial forums.
10. Heard both sides and perused the records.
11. In this case, admittedly, the ore has been supplied in terms of
contract and certain specifications stipulated by the appellants. It is not an
ore in the form, which has emerged in the mine i.e., Run of Mine (ROM) Ore.
There is also a clear finding of the adjudicating authority based on evidence
on record that process of screening and sizing, etc., has been carried out on
ROM ore before it is shipped to the appellants. Even crushing of ore and
removal of overburden i.e., stone etc., has taken place. The issue is whether
these are normal process or special process.
12. We find that similar issue has been dealt by this Tribunal in the case of
M/s Sarda Energy & Minerals Ltd & Ors Vs CC, Visakhapatnam [Final Order
No.A/30013-30016/2026 dt.09.01.2026], wherein, in the similar set of facts
and admitted positions, it was held that the subject processes undertaken
on ROM ore has resulted into emergence of concentrate, keeping in view the
chapter note and HSN explanation, which is a distinct excisable goods in
view of deeming provisions. The relevant paras in the Final Order of this
Tribunal are reproduced below for ease of reference.
"21. We also find that in the case of CC, Nhava Sheva I, Mumbai Vs
Malu Electrodes Pvt Ltd (supra), the Hon'ble Supreme Court, while
examining the issue of chapter note 2 and chapter note 4 of Chapter 26,
in the similar context, inter alia, held that the judgment of the Tribunal,
against which the Revenue had come in appeal, has not considered the
observations and the order of the Hon'ble Supreme Court in the case of
M/s Star Industries Vs CC (Imports), Raigad (supra) at para 28, 29 & 31,
which are cited below.
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"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'. Therefore, it cannot now be argued that roasting of
ores and converting the same into concentrates would not be
manufacture. For the same reason, the judgment in MMTC becomes
inapplicable and reliance upon Kirk-Othmer's Encyclopedia becomes
irrelevant. With the addition of Note 4, a legal friction is created
treating the process of converting ores into concentrates as
manufacture. Once this is treated as manufacture, 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 manufactured
product;
(ii) which is specified in relation to any goods in the Section or
Chapter notes of the First Schedule to the Central Excise Tariff
Act, 1985 (5 of 1986) as amounting to manufacture; or
(iii) which, in relation to the goods specified in the Third Schedule,
involves packing or repacking of such goods in a unit container
or labelling or re-labelling of containers including the
declaration or alteration of retail sale price on it or adoption of
any other treatment on the goods to render 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 reason that after the insertion of Note 4, concentrate
is to be treated as a different product than ores, in law for the
purposes of products of Chapter 26.
30. ............
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 central excise levy, exemption
Notification No. 4/2006-C.E. is to be interpreted in this light as the
Legislature has intended to treat ores and concentrates as two
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distinct items and Notification No. 4/2006-C.E. exempts only 'ores',
concentrates automatically falls outside the purview of said
notification. It is rightly argued by the learned senior counsel for the
Revenue that exemption notifications are to be construed strictly
and even if there is some doubt, benefit thereof shall not enure to
the 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."
22. Thus, the ratio and the principle laid down by the Hon'ble
Supreme Court in the case of M/s Star Industries Vs CC (Imports),
Raigad (supra) has to be followed by the Tribunal to arrive at the
conclusion as to whether goods are ore or concentrate keeping in view
the deeming provisions. We find that the various judgments of
Coordinate Benches cited by the learned Advocates in support that
processes undertaken on the ROM ore are not special treatments and
therefore, it would not amount to conversion of ore to concentrate, have
not considered or taken into account the judgment of Hon'ble Supreme
court in the case of M/s Star Industries Vs CC (Imports), Raigad (supra),
and therefore, we do not find ourselves inclined to follow the ratio laid
down by such judgments in support that the processes undertaken were
not amounting to special treatments. We have already made it clear that
the term 'special treatment' has not been defined and it has been
considered only in terms of Board's circular dt.17.01.2012. However, on
crucial analysis and plain reading of explanatory note, it is obvious that
any activity, which is carried out on the ROM ore with an intent to
remove foreign matters, either partially or fully, so as to make it useful
for metallurgical purposes or for economic transport, the said process
itself would amount to conversion and therefore, the said activities, per
se, will have to be considered as amounting to conversion and therefore
resulting into deemed emergence of new excisable goods i.e., ore
concentrate. We also find that the circular of CBIC is based on a
clarification issued by the Ministry of Mines, where certain processes of
crushing and screening were treated as mere preparatory processes and
were not treated as special treatments as contemplated in the
explanatory notes. We find that while the circulars are binding on the
department, however, if it is patently against the obvious stated
provisions then it need not be followed. That apart, in the present
appeals, it is not only a question of crushing and screening, etc., but
washing is also involved for removal of foreign material partly or fully.
Therefore, what might have been clarified in the context of iron ore, need
not be true for all types of ores or end use, as they have different
impurities and intended uses requiring different kinds of preparatory
processes.
23. Therefore, both on account of cited judgments having not taken
into account the observations of the Hon'ble Supreme Court in the case
of M/s Star Industries Vs CC (Imports), Raigad (supra) as also the fact
that circular itself has not been correctly applied in the given factual
matrix, the cited judgments are not relevant and are distinguished. There
is another ground taken that similar activities are being performed in
respect of Manganese ore extracted and sold in India, where such
activities have not been treated as amounting to manufacture. However,
per contra, learned AR has relied on the case of M/s MOIL Ltd Vs CCE &
ST, Jabalpur (supra), wherein, the issue examined by the Tribunal was
whether various processes such as crushing, screening, sorting by
hydraulic machines and washing with high pressure water, resulting into
emergence of concentrate in terms of Chapter Note 4 to Chapter 26 and
therefore, leviable to Central Excise duty is distinct from ore or otherwise.
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After considering the factual matrix and statutory provisions including
Board Circular dt.17.02.2012, inter alia, it was held that the process of
crushing, grinding, screening, grading of iron ore would result into
'manufacture' of, inter alia, 'concentrate' in terms of clause (ii) of section
2(f) read with Chapter Note 4 to Chapter 26. Thus, as the identical
processes in India were held to be amounting to manufacture in terms of
Chapter Note 4 to Chapter 26, it would be obvious that similar process
undertaken abroad would also be amounting to deemed manufacturing
resulting into a distinct product i.e., concentrate. Incidentally, in this case
also, it is Manganese Ore and most of the users of Manganese ore, who
are also included in these appeals, are simultaneously buying such ore
from MOIL, which has been held to be leviable to Central Excise duty as
concentrate.
24. Therefore, keeping in view the observations of Hon'ble Supreme
Court in the case of M/s Star Industries Vs CC (Imports), Raigad (supra),
when the goods are subjected to a similar activity and therefore, denied
exemption in India and charged to Central Excise duty, similar goods
having undergone similar processes when imorted would also be not
entitled to CVD exemption. We also find force in the citations of the
learned AR in the case of Beach Minerals Company Vs CC, Tuticorin [2023
(9) CENTAX 148 (Tri-Mad)]. In this case, it was the case of the
department that the appellants have not undertaken any beneficiation
process to make the mined sand into processed/upgraded Ilmenite. The
Tribunal relied on the definition of the word 'beneficiation' under Rule
3(d) of Mineral Conservation and Development Rules, 1988, as under.
"12. The major objection but forward by the Department is that the
appellants have not undertaken any beneficiation process to make
the mined sand into processed/upgraded Ilmenite. The appellant
has produced the flow chart showing the various processes
undertaken before the goods are exported. It may be true that the
mine sand has not undergone any chemical treatment or roasting.
It has to be seen that the said flow chart has been approved by the
Mining Department as well as the Atomic Energy. Further in the
Tariff heading reproduced above, the word "beneficiation" has not
been explained. Rule 3(d) of Mineral Conservation and
Development Rules, 1988 defines "beneficiation". The said rule
reads 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."
25. Therefore, it was held that any process, which is done for the purpose of regulating size of desired produce, removal of unwanted constituents and improving quality, purity or assay grade of desired product, would be treated as beneficiation process. The Tribunal also relied on the decision in the case of VV Minerals Vs CC [2016 (332) ELT 888 (Tri)], wherein the Tribunal has relied on the judgment of Hon'ble Supreme Court in the case of Tata Steel Ltd Vs UOI [2015 (3) SCALE (11) C/30660-30662/2016 759], wherein, the Hon'ble Supreme Court examined the question as to what the consequence of beneficiation is and observed very briefly that the consequence of beneficiation of coal is upgrading or improving its quality from ROM coal. Thereafter, it was, inter alia, held that beneficiation process (dense media gravity separation and froth flotation) are a physical separation process to separate higher ash coal and lower ash coal, so no chemical changes are there in the coal mineral, as there are no chemical reactions involved during this beneficiation process. The findings of the Tribunal at para 15 are relevant and is cited below for ease of reference.
15. Our view is supported by the decision of the Tribunal in the case of VV Minerals Vs. Commissioner of Customs (supra). The Tribunal analyzed the issue in detail and observed as under:
"11. We have also seen the sample of both unprocessed and the final product i.e. upgraded Ilmenite and perused the certificate dated 1-3-2013 issued by the Department of Geology & Mines, Government 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 the website literature of another company i.e. Kerala Minerals Ltd. and based their decision only on the issue of roasting and acid wash or chemical treatment. The department also contends that beneficiated ore should be high % of TiO2 which is 'Synthetic Rutile'. We find that the classification of 'Rutile' is separately classified under CH 2614 00 31. Therefore, the department's contention for classifying under Chapter 2614 00 10 is not based on valid reasons and relying another firm's website 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 v. 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 of beneficiation or coal is upgrading or improving its quality from ROM coal. In the Convenience Volume handed over to us, with reference to beneficiation or coal, it is stated by Tata Steel as follows :
The crushed raw coal (ROM) has ash percentage varying from 22% to 40% and moisture of 3% to 5%. For use in Blast furnace for steel making, we require clean coal of uniform quality at low ash %. So, Beneficiation of ROM raw coal is done to reduce the ash content to bring up to Steel Grade coal.
ROM 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 from 13 mm to 0.5 mm is treated in dense media cyclone (12) C/30660-30662/2016 whereas, less than 0.5 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 (with moisture). Hence the output is more than the input of raw coal.
Beneficiation process results in Clean Coal; Middlings; Tailings; and Rejects ... ... ...
Conclusion :
It is quite clear that beneficiation process (dense media gravity separation and froth floatation) are a physical separation process to separate higher ash coal and lower ash coal, so no chemical changes are there in the coal mineral, as there are no chemical reactions involved during this beneficiation process.
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 present case as the principle of beneficiation is same. Further the Hon'ble High Court of Patna in the case of Indian Aluminium Co. Ltd. and Anr. v. State of Bihar & Ors. (supra) while deciding the constitutional validity of collection of fees on ores under Mines & Minerals Act, 1980 relied the definition of beneficiation given under MCD Rules, 1988. Further, we find that the Board's circular dated 17-2-2012 had clarified chapter note of Chapter 2601 - 2617 and by beneficiation process the end product of ore 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 (13) C/30660-30662/2016 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 have also pointed out that several processes (in addition to crushing and screening) such as milling, hydraulic separation, magnetic separation, floatation & Concentrate thickening have to be undertaken for ores to be converted into concentrate.
3. Hence it is clarified that the levy of excise duty is attracted only in cases where the product meets the definition of concentrate 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 sub-headings are to be literally applied and no other meaning or assumption can be made. The sub-heading 2614 00 20 only describes Ilmenite upgraded (beneficiated Ilmenite) without any specification. As evident from the findings of LAA the Revenue's trying to put the "Synthetic Rutile" under the above heading is incorrect and not acceptable. Therefore, by respectfully following the Apex Court and High Court decisions referred above, we are of the considered view that the product "Ilmenite" exported by the appellant is rightly classifiable under CH 2614 00 20 of CTH as "Ilmenite upgraded (Beneficiated Ilmenite) and chargeable to appropriate export duty and not under 2614 00 10 of CTH.
13. Accordingly, the impugned order is set aside and the appeal is allowed with consequential benefit."
26. Thereafter, the Tribunal held that goods, which were upgraded/ processed Ilmenite are classifiable under 2614 00 20 and set aside the Revenue appeal. Therefore, in this case also, simple physical process of segregating or washing certain foreign materials have been treated as leading to upgradation of quality, etc., and keeping in view the definition of 'beneficiation' process, it was held that resulting product is beneficiated product.
27. There are some other incidental grounds taken by appellants that no testing was conducted or expert opinion relied upon to arrive at the conclusion that such activities led to conversion of ore into concentrate. We find that while prior to insertion of deeming provision, the tests were being conducted to distinguish between concentrate and ore for deciding whether they are eligible for exemption or otherwise. However, post this (14) C/30660-30662/2016 insertion of Chapter Note, in view of the deeming provision, there was no necessity to conduct any test as long as it is established and admitted that certain activities were undertaken on ROM ore before it was shipped to India. The only issue that required to be seen is that whether these activities undertaken prior to its shipment could be considered as process leading to removal of impurities and foreign material so as to make it suitable for metallurgical purposes or for economical transportation. It is also not necessary that it should be some detailed process involving physical, physico-chemical and chemical operations, as even simple physical process like washing, crushing, sizing, etc., depending on requirement and the nature of ore, would enhance its value and purity and compatibility with intended end use. In all these appeals, it is not in dispute that they have received ore of certain concentration and admittedly they are above 35%. The scheme of classification of Manganese ore is that Chapter Heading 2602 00, which covers both Manganese ore and concentrates, including ferruginous manganese ores and concentrates with a manganese content of 20% or more, calculated on dry weight. The scheme is reproduced below:
Tariff Description of goods Unit Rate
Item of
duty
2602 Manganese Ores and
Concentrates,
including Ferruginous
Manganese Ores and
Concentrates with a
Manganese Content
of 20% or more,
calculated on the dry
weight
2602 Manganese ores and
00 concentrates,
including ferruginous
manganese ores and
concentrates with a
manganese content
of 20% or more,
calculated on the dry
weight:
2602 Manganese ore (46% Kg. 12.5%
00 or more)
10
2602 Manganese ore (44% Kg. 12.5%
00 or more but below
20 46%)
2602 Manganese ore (40% Kg. 12.5%
00 or more but below
30 44%)
2602 Manganese ore (35% Kg. 12.5%
00 or more but below
40 40%)
2602 Manganese ore (30% Kg. 12.5%
00 or more but below
50 35%)
2602 Ferruginous (10% or Kg. 12.5%
00 more but below
60 30%)
2602 Manganese ore Kg. 12.5%
(15)
C/30660-30662/2016
00 sinters,
70 agglomerated
2602 Other Kg. 12.5%
00
90
28. Thus, for different Manganese content in the ore, different sub- classification has been made. A logical question would be if someone imports ore with Manganese content of 20% and someone imports ore of Manganese content of 35% or above, will they be same. In our opinion, this sub-classification clearly indicates that Manganese ore can have different Manganese content, either naturally occurring or by way of subjecting it to certain process to arrive at desired percentage. The lowest percentage for Manganese ore and concentrate had been accepted at 20%. Thus, any improvement in the content itself, where there is clearly admitted fact that it has undergone certain process, would indicate that there has been an improvement in the quality. Therefore, on this count also, it can be said that the subject processes undertaken on ROM ore has resulted into emergence of concentrate, which is a distinct excisable goods in view of deeming provisions."
13. Even on the issue of interest in the facts of the case, it was held that in terms of statutory provisions, which are quite clear that when there is delay in payment of duty due, applicable interest is required to be paid. Thus, following the said order, we find in the facts of the case, the appellants would not be eligible for exemption claimed by them at the time of import in respect of impugned goods. We, therefore, do not find any merit in the appeals filed by the appellants and accordingly, the appeals are dismissed.
(Pronounced in the Open Court on 27.01.2026) (A.K. JYOTISHI) MEMBER (TECHNICAL) (ANGAD PRASAD) MEMBER (JUDICIAL) Veda