The conversion of naturally occurring ores into concentrates through processes like washing, sizing, or removal of waste is deemed 'manufacture' under Chapter Note 4 of Chapter 26 of the Central Excise Tariff Act, excluding such products from exemption notifications applicable strictly to 'ores'.

[Order per: ANGAD PRASAD]

M/s Stork Ferro & Mineral Industries Pvt Ltd (hereinafter referred to as the appellant) are in appeal against OIA dt.31.01.2017, whereby, the Commissioner (Appeals) has rejected the appeal filed by the appellant and denied them the benefit of exemption from payment of CVD in terms of S.No.04/2006-CE dt.01.03.2006 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. The appellants claimed clearance of the said goods without payment of CVD in terms of exemption Notification No.04/2006-CE dt.01.03.2006. The Bills of Entry were provisionally assessed in terms of section 18 of the Customs Act, 1962, pending submission of certain documents. Subsequently, the department proposed to finalize the assessment by levying CVD on the ground that the imported goods were ‘concentrates’ and not ‘ores’, purportedly in view of Chapter Note 4 to Chapter 26 of Central Excise Tariff Act, 1985, introduced w.e.f. 01.03.2011. On adjudication, the Original Authority finalized the provisional assessment and held that imported goods are not ores but concentrates and hence not entitled for exemption under Notification 04/2006 and confirmed the recovery of CVD. Being aggrieved by the OIO, the appellants filed appeal before Commissioner (Appeals), who has upheld the OIO and confirmed the recovery of CVD, against which the appellants are in appeal before the Tribunal.

3. Learned Counsel for the appellant has mainly submitted that they had furnished all the requisite documents including contract, invoice, load port analysis, etc., and therefore, the appellants have duly discharged the evidentiary burden by demonstrating that the imported goods were manganese ore. Further, the process of crushing or sizing Manganese ore cannot be equated with concentration as such operations are routinely undertaken in the mining industry prior to delivery of ore to manufacturers and do not involve beneficiation. He has further submitted that it is a settled principle that the onus to prove that an item is taxable in the manner alleged lies on the department relying on the following judgments.

a) Hindustan Ferodo Ltd Vs CCE [1989 (16) ELT 16 (SC)]

b) UOI Vs Garware Nylon Ltd [1987 (12) ELT 12 (SC)]

4. Further, the appellant 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.

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