Customs, Excise and Gold Tribunal - Bangalore
The Kerala Minerals And Metals Ltd. vs The Commissioner Of Central Excise on 25 April, 2007
Equivalent citations: 2007(120)ECC273, 2007ECR273(TRI.-BANGALORE)
ORDER S.L. Peeran, Member (J)
1. By these appeals, the appellant is contesting the confirmation of demands by the OIA Nos. 38 to 44/2000-CE dated 10.07.2000 by which the Commissioner (Appeals) has confirmed 7 Orders-in-Original and the duty amounts as noted in the OIOs. They are as follows:
Sl. No. Appeal No. & Date OIO No. & Date Duty involved
1.
1/2000 dt. 3.1.2000 45/99 dt. 30.7.99 Rs.
3,32,589.00
2. 2/2000 dt. 3.1.2000 46/99 dt 30.7.99 Rs.
2,28,784.00
3. 3/2000 dt. 3.1.2000 47/99 dt. 30.7.99 Rs.
10,76,537.00
4. 4/2000 dt. 3.1.2000 48/99 dt 30.7.99 Rs.
6,41,143.00
5. 5/2000 dt. 3.1.2000 49/99 dt. 30.7.99 Rs.
16,38,560.00
6. 6/2000 dt. 3.1.2000 50/99 dt. 30.7.99 Rs.
7,80,224.00
7. 7/2000 dt 3.1.2000 51/99 dt. 30.7.99 Rs.
2,62,800.00
2. The issue involved in the present case is as to whether the goods cleared by the appellants from their Mineral Separation Plant at Kovilthottam are ore concentrates classifiable under CSH 2614 or they have resumed the characteristics of a new product for classification under CH 28. The appellants' contention before both the authorities was that the item in question was mineral sand in concentrated ore form. The item has not undergone any transformation or upgradation or augmentation of their purity. The chemical structure remained the same. There was no special process carried out by them in taking the ores out of the stage of plain and simple ores to chemically defined compound. They have continued to remain as rare mineral sands when they were removed from their factory. The process of concentration and change to bring to the said purity was done at another factory where duty is being paid. The appellants took the stand that by magnetic process, the separation of various elements in the mineral soil was done. The various minerals were Illmenite, Rutile and Zircon. There is no process to bring into existence separate goods having separate name and known in the market differently than the item which had been brought by magnetic process into their elements. The sand contained three elements. They were merely separated and hence, no new product has arisen in the case. They relied on the rulings of the following judgments:
(i) UOI v. Delhi Cloth & General Mills
(ii) Dy. Commissioner of Sales Tax v. Pio Food Packers
(iii) CCE v. Kirian Spinning Mills
(iv) Hindustan Polymers v. CCE
(v) Polar Marmo Aggromerator Ltd. v. UOI
(vi) Moti Laminates Pvt. Ltd. v. CCE -
(vii) Hyderabad Industries Ltd. v. UOI The Commissioner (Appeals) has not accepted their contention and the citations relied. He has not given any reason as to why these judgments are not applicable. He has considered the process of separation of three elements from the raw materials as a process of manufacture and bringing into existence three separate goods liable for duty.
3. The learned Counsel submits that the issue is covered by the judgment in the case of Indian Rare Earths Ltd. v. CCE, BBSR-I where rare mineral sands were subjected to physical and mechanical process for separation of chemicals. Such process was held to be not a process of manufacture as no separate goods were brought into existence. It is his submission that separation of Illmenite, Rutile and Zircon in the Mineral Separation Unit of the appellant factory will not be classifiable Under CSH 2614 and 2615 as held by the original authorities but they continue to be as ore concentrate. The denial of benefit of Notification 4/97-CE dated 01.03.1997 is also not justified. It is his submission that the two units viz. (i) Mineral Separation Unit and (ii) Titanium dioxide pigment unit are registered under the (i) Mines Act, 1932 and (ii) Factories Act 1948 respectively. After separation, the items are sent to their other unit where separate processes takes place and for removal of those goods, duty is being discharged. The duty at the present stage of mere separation of the three items will not lead to bringing into existence a new product as there is no chemical change taking place. He submits that the judgment of Indian Rare Earths Ltd. is not distinguishable.
4. The learned JDR pointed out that the judgment of Indian Rare Earths Ltd. is distinguishable as in that case, the rare mineral sand was dredged out by physical and mechanical process from ordinary sand into concentrated ores and they were held to be not by a process of manufacture as the chemical structure remarried the same. However, he submits that in this case, the ores are brought by magnetic, electrostatic and gravity process to bring into existence minerals like Illmenite, Rutile and Zircon. They have to be classified under the respective headings and charged to duty by denying the benefit of the exemption notification. He submits that the findings recorded by the Commissioner (Appeals) is justified.
5. We have carefully considered the submissions and have perused the ruling of Indian Rare Earths Ltd. cited by the counsel. The said ruling refers to 2 cases. Hyderabad Industries Ltd. v. U.O.I. ; Minerals and Metals Trading Corporation of India Ltd. v. U.O.I. . In the present case, the appellants are merely carrying on the activity of separating the minerals from the beach sand. The situation is similar to the one of the cited cases viz. Indian Rare Earths Ltd. wherein also the process of separation was from the beach sand to bring out rare mineral sands by physical process and mechanical process. In the present case also, the minerals which are present in the beach sand are separated by magnetic, electrostatic and gravity process. These minerals continue to remain as minerals in the same form. They had not changed their identity nor are they known by a different name in the market. There is no chemical or physical change in the mere characteristics. Therefore, the judgment of Indian Rare Earths Ltd. case, which is based on to 2 Supreme Court judgments, clearly applies to the facts of the case. Respectfully following the same, the impugned orders are set aside and appeals are allowed with consequential relief, if any.
(Pronounced and dictated in open Court)