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8. Thus, the case of the opponent authorities is that the petitioner has not been required to pay royalty at any rate higher than that prescribed by the Central Government; but the so- called process within the leased area by the petitioner was resulting into value addition to the mineral and as the iron ore was being consumed for the purpose of processing, the State was entitled to

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charge royalty on the iron ore before it was processed. The State had no option but to ensure collection of royalty at the fair value prescribed by the IBM. It is further submitted on oath on behalf of the Deputy Director of Mines that royalty was demanded in exercise of powers conferred by Section 24(2) of the MMDR Act and M.C. Rules as required under Section 9 of the MMDR Act. It is pointed out that as per the notification of IBM, royalty on iron ore lumps is much higher than iron ore fine. In view of obvious loss to the State Exchequer by crushing of lump ore into CLO and fine by the petitioner and in view of the remarks of the CAG, the impugned Circular had to be issued. As the price of CLO is yet to be published by IBM, the lessee has to pay at least royalty for the lump ore which he would have paid had he not processed the lumps in the crushing plant inside the leased area for value addition. The State Government has already clarified by letter dated 9.4.2012 that royalty shall be charged on iron ore lumps as mined or the processed form, i.e. CLO and fines whichever is higher. It is further submitted that the petitioner has voluntarily made advance payments of royalty through challans and online transfer of funds and the challenge thereto is an afterthought. When the petitioner failed to pay royalty within time, demand for payment of interest was also justified. The State Government has, vide letter dated 18.9.2012, pointed out to the Central Government the reports of the CAG. It is specifically averred that for the year 2010-11 and 2011- 12, the petitioner was required to pay royalty at the rate applicable

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15. The issues arising in the facts of the present case are slightly different from the issues settled in the cases referred hereinbefore. The relevant legal provisions and the settled principles have to be applied herein in the context of two very important facts emerging from the record. Firstly, that the mining scheme submitted by the petitioner and approved or accepted by the respondent clearly stipulate that no mineral beneficiation was envisaged within the lease area and, as seen earlier, mining operations can be carried out only in accordance with the mining scheme. Therefore, even if the operation of crushing were projected in the mining plan, it was not permissible for the petitioner to carry out the process for regulating the size of iron ore lumps as that process amounted to beneficiation. Second important fact was that not only the processing amounted to beneficiation but it resulted into reduction in the amount of royalty on account of part of the lump ore being reduced to fines. These facts have to be scrutinized in light of two successive reports of the Comptroller and Auditor General of India, for the years ending on 31st March, 2008 and 2009, which clearly and exactly pointed out that the quantum of unprocessed mineral fed into the processing plant was exactly the same as the quantum of output from the plant, which would mean that the input was already iron ore lumps, part of which was

The petitioner cannot be allowed to secure the assistance of a court of law or equity for enjoying the fruits of their own wrong.

18. Thus, the initial case of the respondents that crushing of iron ore lumps into CLO and fines amounted to "consumption" was then shifted to the alternative argument of the process of crushing amounting to impermissible "beneficiation" or, at least, further processing of iron ore lumps by the petitioner. That argument was supported by the fact that, as observed in reports of the Comptroller & Auditor General, the quantity of input for the crushers remained exactly the same after crushing and only the form of iron ore lumps was partly reduced to fines. 18.1 Opposing such shift in the stand of the respondents, it was vehemently argued by learned Sr. Counsel Shri Salman

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petitioner in crushing iron ore lumps did not amount to beneficiation, it certainly was further processing and not the processing envisaged by Rule 64-B of the MC Rules. 18.3 That argument has to be accepted in view of the composite scheme of levying royalty on iron ore. While Section 9 of the MMDR Act obliges the holder of a mining lease to pay royalty in respect of any mineral removed or consumed, the rate at which royalty has to be paid is specified in the Second Schedule. The Second Schedule classifies iron ore into three forms, viz. lumps, fines and concentrates. Rule 64-B of the MC Rules provides for charging of royalty on the processed mineral removed from the leased area. The processing envisaged in Rule 64-B could be the processing of iron ore by which it is brought into any of the three forms for which royalty is payable under Section 9 of the MMDR Act; and the manner of computation and payment of royalty as provided in Rule 64-D requires as the basis the mineral produced. A conjoint reading of these relevant provisions for levy of royalty cannot accommodate further processing of the iron ore in any of three forms.