2026-VIL-1154-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Mining of iron ore and manganese ore, Manufacture of Iron Ore Concentrate – Activity of Crushing and Screening - Appellant, a mine owner engaged in mining iron ore and manganese ore, carried out raising, crushing and screening of iron ore through a contractor - Respondent issued notices proposing recovery of duty on the ground that crushing and screening of iron ore amounts to manufacture of "iron ore concentrate" under Chapter Note 4 to Chapter 26 of the Central Excise Tariff Act, 1985 - Whether the process of crushing and screening of iron ore undertaken by or on behalf of the appellant amounts to "manufacture" of "iron ore concentrate" within the meaning of Chapter Note 4 to Chapter 26 of the Central Excise Tariff Act, 1985, when the said process effects only size reduction and segregation of the iron ore - HELD - The HSN Explanatory Notes to Chapter 26 provide that concentrates apply to ores which have had part or all of the foreign matter removed by special treatments. Chapter Note 4 operates only upon the conversion of an ore into a concentrate, and the deeming fiction is conditional upon a concentrate first coming into existence - The burden of proving that a concentrate came into existence by special treatment lies squarely upon the respondent. Crushing and screening are primarily processes of size reduction and separation, and without the employment of special treatment and removal of foreign matter there cannot be any concentration. The CBEC Circular No.332/1/2012-TRU dated 17.02.2012 clarifies that levy of excise duty is attracted only in cases where the product meets the definition of concentrate as per HSN Notes and that crushing and screening of run-of-mines into lumps and fines does not amount to the production of concentrate. The Ministry of Mines has itself clarified that no special treatment is involved in crushing and screening of ore, and the end product can be termed as concentrate only when the grade of ore is sufficiently improved through beneficiation processes - The activity undertaken by the appellant does not amount to manufacture and does not result in the end product being concentrates falling under Chapter 26 of the Central Excise Tariff Act. The iron ore remains iron ore in name, character and use, and continues to remain unconditionally exempt as "ores" under the applicable notifications - The impugned order confirming the demand of excise duty is set aside and the appeal is allowed
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