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TMI Blog1992 (5) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... that the exemption under Notification 23/55 in respect of graphite was not a conditional one and would be available to graphite in the form in which it is produced. 2. The appellant-Collector has submitted in the department s appeal that an appeal against the decision of the Tribunal in T.P. Minerals case (supra) has been filed in the Supreme Court. Further, the graphite obtained from the mines is not pure and has to be processed and impurities removed before it is fit for marketing. The graphite powder/flakes used by the respondents are not natural graphite but manufactured/processed graphite to which the exemption does not apply because of the specific wordings natural black minerals in the notification. Lastly, Note (2) to Chapter 25 of the Central Excise Tariff which speaks of Headings 25.01, 25.03 and 25.05 covering only products which have been washed, crushed, ground, powdered etc. lays down guidelines for classification and is not applicable to the interpretation of the exemption notification in question. 3. Arguing for the Department, Shri K.K. Bhatia, the learned Joint Chief Departmental Representative, referred to the decisions of the Supreme Court in the catena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich was a titanic iron ore (FeO TiO2) as also Manganese Dioxide both of which were listed along with graphite as natural black minerals to which the exemption was granted by the notification. He submitted that it would be seen from Hawley s Chemical Dictionary that all the three - Graphite, Ilmenite black and Manganese Dioxide - occurred naturally and were also produced synthetically. But the exemption under the notification was confined only to natural substances. He referred to Note (2) to Chapter 25 and submitted that it was not their case that the product graphite powder/flakes had been subjected to any of the processes of roasting, calcination or mixing. Shri Lakshmikumaran contested the argument of the learned JCDR about applicability of Note (2) only for classification purposes and submitted that the question of exemption from duty would arise only after it was held that the impugned goods were excisable in terms of the aforesaid note. Government would not have thought of giving exemption from duty under Notification 23/55 unless it was first held that the goods were excisable. 6. Shri Lakshmikumaran thereafter cited the decision of the Supreme Court in the case of Mine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one into fine lime did not amount to manufacture for the purposes of the Central Excise Tariff Act. He also referred to another decision of the Tribunal in the case of Collector of Central Excise, Patna v. M/s. Pyrites, Phosphates and Chemicals Ltd., Bihar [1983 (12) E.L.T. 537] in which it was decided that crushing/sieving of pyrites did not bring about any new product and therefore there was no manufacture in terms of Section 2(f) of the Central Excises Salt Act, 1944. 8. Shri Lakshmikumaran countered the argument of the learned JCDR about the Supreme Court decisions in the DCM and South Bihar cases (supra) and submitted that in the concept of manufacture expounded in these cases, a new product with a distinctive name, identity and use must come into existence and it cannot be said that the processing of crude graphite had resulted in the emergence of anything different from graphite itself. The ratio of these decisions was not therefore applicable. He also referred to the Supreme Court judgment in the case of Khandelwal Metal Engineering Works v. Union of India [1985 (20) E.L.T. 222] according to which Chapter Notes of the Tariff were part of the tariff itself and had to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. We are wholly unable to comprehend how in order to fall under Item 26 the ore has to be as mined. There is a good deal of force in the argument of Mr. Setalvad for the appellant that the normally acceptable merchantable quality of wolfram or tungsten contains a minimum 65% WO3. This is the usable ore and it is in that sense that it is commercially understood. Wolfram ore when mined contains only 5 to 2 per cent WO3 and in order to make it usable and merchantable ore with minimum 65% WO3, concentration is necessary. If Item 26 of the Import Tariff is to be restricted to Wolfram being material containing 5 to 2 per cent WO3 it would be mainly rock which can neither be imported in large quantity and which will have no market. The separating of wolfram ore from the rock to make it usable ore is a process of selective mining. It is not a manufacturing process. The important test is that the chemical structure of the ore should remain the same. Whether the ore imported is in powder or granule form is wholly immaterial. What has to be seen is what is meant in international trade and in the market by wolfram ore containing 60% or more WO3. On that there is a preponderation weight of aut ..... X X X X Extracts X X X X X X X X Extracts X X X X
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