Dutiability of “iron ore” and “iron ore concentrates” - Clarification regarding. - Central Excise - F. No. 332/1/2012-TRU

Instructions Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi dated 17-2-2012 Subject : Dutiability of iron ore and iron ore concentrates - Clarification regarding. A reference has been received from Bhuwaneswar Zone seeking clarification on the issue of whether Iron ore lumps and fines are dutiable as concentrates when subjected to crushing, screening, sizing or washing etc. 2. In Budget 2011, a Note was inserted in Chapter 26 of the First Schedule to the Central Excise Tariff to deem the process of converting Ores into Concentrates as a process amounting to manufacture. Both ores and concentrates are classifiable under Chapter 26 and while the term Ore is defined in Note 2 of the said chapter, the term concentrate is not. HSN Explanatory Note spell out the scope of the term Concentrate as under : For the purposes of Headings 2601-2617 , 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 may hamper subsequent metallurgical operations or with a view to economical transport. From the above definition, it is clear that removal of part or all of foreign material is envisaged for conversion of ores into concentrates. Ministry of Mines have clarified that no special treatment is involved in the crushing and screening of ore and the end-product can be termed as a concentrate only when the grade of ore is sufficiently improved through beneficiation. Federation of Indian Mineral Industries have also pointed out that several processes (in addition to crushing and screening) such as milling, hydraulic separation, magnetic separation, floatation Concentrate thickening have to be undertaken for ores to be converted into concentrate. 3. Hence, it is clarified that the levy of excise duty is attracted only in cases where the product meets the definition of concentrate as per HSN Notes, that is, ores which have had part or all of the foreign matter removed by special treatments either because such foreign matter may hamper subsequent metallurgical operations or with a view to economical transport . 4. The above position may be brought to the notice of Commissioners under your charge so that pending disputes, if any, may be decided accordingly. [F. No. 332/1/2012-TRU]