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2018 (1) TMI 984 - AT - Central ExciseManufacture - ore concentrate - various processes such as crushing, screening, sorting by hydraulic machines and washing with high pressure water was performed by machines - The Department was of the view that in the light of Chapter Note 4 to Chapter 26, the processes carried out by the appellant resulted in the manufacture of ore concentrate and the same amounts to manufacture - Held that - the Tribunal in the case of Rungta Mines vs. CCE 2016 (4) TMI 602 - CESTAT KOLKATA has held that, processes which are very similar to those undertaken by the appellant, have been held to be covered by the Chapter Note 4 and the resultant goods are liable to Central Excise duty - above decision of the Tribunal is applicable to the present facts of the case and hence, it is concluded that the processes undertaken by the appellant will incur the mischief of Chapter 4 and Excise duty will be payable by the appellant - the Tribunal has also set aside the penalty. By following the same, in the present case too, the penalty imposed on the appellant is set aside. Benefit of exemption N/N. 63/95-CE dated 16.03.95 - Held that - Since such benefit has not been claimed before the adjudicating authority, the matter is required to be remanded to the adjudicating authority to consider the same in the facts and circumstances of the present case - matter on remand. Appeal allowed in part and part matter on remand.
Issues:
1. Whether the processes undertaken by the appellant amount to the manufacture of ore concentrate under Chapter Note 4 to Chapter 26 of the Central Excise Tariff Act, 1985. 2. Whether the appellant is liable to pay Central Excise duty on the ore concentrate processed in their factory. 3. Whether the appellant is entitled to the benefit of Notification No. 63/1995 dated 16.03.1995. 4. Whether the demand is hit by time bar. 5. Whether the penalty imposed on the appellant is justified. Analysis: Issue 1: The appellant, engaged in mining and sale of manganese ore, processed the ore in their factory through various methods to improve its quality. The dispute centered around whether these processes amounted to converting ores into concentrates, thereby attracting Central Excise duty. The adjudicating authority held that the processes resulted in the manufacture of ore concentrate, leading to the demand for Central Excise duty. The appellant contested this, arguing that the processes did not meet the criteria of special treatment as per Chapter Note 4. They also cited a Tribunal decision and an Apex Court case to support their stance. Issue 2: The Revenue justified the demand for Central Excise duty based on Chapter Note 4, stating that the processes carried out by the appellant resulted in enriched ore, thus constituting ore concentrate. They referred to a Tribunal decision supporting their position. After hearing both sides, the Tribunal examined the processes undertaken by the appellant, including crushing, screening, and washing, to determine if they indeed amounted to the manufacture of ore concentrate. The Tribunal analyzed the CBEC Circular and the HSN Note to interpret the definition of concentrate and special treatment. Issue 3: The appellant alternatively claimed the benefit of Notification No. 63/1995 dated 16.03.1995, which grants exemption to manufacturing processes carried out within the mine. Although this plea was not raised before the adjudicating authority, the Tribunal decided to remand the matter for further consideration to determine the eligibility for this exemption. Issue 4: The appellant argued that the demand was time-barred, while the Tribunal did not make a definitive ruling on this issue. Instead, they remanded the matter for the adjudicating authority to decide on the time bar aspect during denovo proceedings. Issue 5: Regarding the penalty imposed on the appellant, the Tribunal set it aside, following a precedent where a similar penalty was overturned in comparable circumstances. The Tribunal's decision was based on the interpretation of Chapter Note 4 and the definition of "manufacture" under the Central Excise Act, 1944. Ultimately, the Tribunal remanded the case to the adjudicating authority for a fresh decision, considering the various arguments presented by the appellant.
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