2017 (10) TMI 1412 - AT - Central Excise

Process amounting to manufacture or not - conversion of iron ore into concentrate - liability of central excise duty - Held that - The process undertaken by the appellant are not in dispute. There is no special process facility with the appellant. Improvement in the content of Fe due to the processes undertaken by the appellant by itself will not make the resultant product as iron ore concentrate - It is clear that process undertaken by the appellant do not amount to manufacture of new product as understood in the industry - appeal allowed - decided in favor of appellant.

Summary

Issues:
Central Excise duty liability on processing of iron ore - Whether the process amounts to manufacture and is liable to duty.

Analysis:
The case involved an appeal against an order-in-original dated 29-8-2016 of the Commissioner, Jaipur, concerning the Central Excise duty liability on processing iron ore from June 2013 to July 2015. The dispute revolved around whether the process undertaken by the appellants constituted manufacture liable to duty. The appellants argued that their process did not result in a product that could be classified as iron ore concentrate, citing a Board Circular and relevant case law. The Revenue contended that the conversion of iron ore into concentrate attracted Central Excise duty, a view upheld by the lower authorities who also imposed a penalty.

The Learned Counsel for the appellant highlighted that the increase in the "Fe" content in iron ore through various processes did not automatically transform the final product into iron ore concentrate. The impugned order was based on an examination of HSN notes and arrived at a different conclusion from the Board Circular. The Tribunal noted that the processes undertaken by the appellant were not in dispute, and there was no specialized process facility involved. Relying on various case laws, including those concerning Steel Authority of India and Indian Rare Earth Ltd., the Tribunal concluded that the appellant's processes did not amount to the manufacture of a new product as recognized in the industry.

In light of the arguments presented and the case laws cited, the Tribunal found that the process undertaken by the appellant did not result in the manufacture of a new product akin to iron ore concentrate. Consequently, the impugned order was deemed without merit and set aside, allowing the appeal in favor of the appellant.