The main legal point established in the judgment is that the writ petition was not maintainable due to the availability of an efficacious remedy by way of filing appeal before the CESTAT.

JUDGMENT :

D.P. Choudhury, J.

In the captioned writ petition challenge has been made to the order dated 30.11.2015 passed by the opposite party No.2 - Commissioner of Customs, Central Excise and Service Tax, Rourkela confirming the duty demand of Rs.63,73,51,977/-under Section-11-A of the Central Excise Act, 1944 (hereinafter called “the Act”), along with applicable interest and equal penalty under Sections-11-AA and 11-AC of the Act, respectively, read with Rule 25 of the Central Excise Rules, 2002 (hereinafter called “the Rule”), along with penalty of Rs.5,000/-under Rule 27 of the Rules, 2002. Challenge has been made further to the aforesaid order as perverse and contrary to the provisions of law, HSN Explanatory Notes, and Circular issued by the Board and the judgment of the Hon’ble Apex Court.

FACTS

2. The factual matrix leading to the case of the petitioner is that petitioner-Company is engaged in the business/activity of manufacturing Iron and Steel items. For the purpose of manufacture of the said items, the petitioner also carries out the activity of mining and extraction of Iron Ores from various locations in their own captive mines at Tensa, in the district Sundargarh of the State of Odisha. After extraction of the Iron Ore, the petitioner used to carry out the process of crushing and screening of the Iron Ores in order to reduce the size of the Ores in two categories, i.e., ‘fines’ below the size of 5 mm and ‘lumps’ within the size of 5 mm and 200 mm. As such the petitioner has been engaged in production of sized Iron Ore, i.e., ‘lumps’ and ‘fines’ since 2011. It is further stated that the petitioner was not registered with the Central Excise Department during the relevant period as the sized Iron Ore produced by it was exempted from payment of excise duty under Notification No.4/2006-CE dated 1.3.2006 which exempts Ores under Chapter Headings 2601 to 2617 of Chapter 26 of the First Schedule to the Central Excise Tariff Act, 1985 (hereinafter called “CETA, 1985”) from the payment of Excise Duty.

3. In the Union budget for the year 2011-2012, Chapter Note 4 to Chapter 26 of the First Schedule to the Central Excise Tariff Act, 1985 was inserted to state that the process of converting Ores to Concentrates will amount to manufacture and after such insertion the opposite party-Department started investigation into the processes undertaken by the petitioner to find out whether it amounts to manufacture.

4. The petitioner carries out the mining of Iron Ore to obtain the Run of the Mines (for short, ROM) which is a term referring to the material extracted from the Mines. It is explained in the petition that ROM excavated from the mines is brought to the Crushing Plant of the petitioner and this ROM consists of ‘lumps’ of different sizes. Neither of the terms ‘lumps’ nor ‘fines’ are either defined in Chapter 26 of the First Schedule to the Central Excise Tariff Act, 1985 or in the HSN Explanatory Notes. It is stated that ROM transported from mines was first put into Crusher to make the ROM in small pieces of size up to 200 mm. then Screening of the same is made to separate the size up to 5mm. Thereafter the Iron Ore above 5 mm is sent for secondary Crushing and the size becomes 20 mm. But by the Union Budget for the year 2011-2012, Chapter Note 4 was inserted in Chapter 26 of the First Schedule to the Central Excise Tariff Act, 1985 by stating that the process of converting Ores into concentrates amounts to manufacture and as such the petitioner is liable to pay Central Excise duty after registration under Central Excise. Accordingly, letter was sent by the Department to the petitioner on 19.3.2011. The petitioner replied on 14.4.2011 to the Department stating that he has undertaken the process, i.e., crushing of Iron Ore into smaller sizes and separation of different sizes do not amount to concentration and the products are not concentrates. But thereafter the correspondence between the Department and the petitioner continued. P