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TMI Blog2016 (5) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... o Appellate Tribunal. It is already discussed that there are certain facts raised before us are required to be adjudicated in appeal and the same cannot be adjudicated in the writ petition. We have already observed in this writ petition that further facts are to be adjudicated and same can only be addressed before the appellate court. Moreover, there is clear-cut provision under Section 35-B to file appeal. It is available from the contention of the petitioner that in an earlier occasion when the petitioner manufactured the same product, the petitioner was served notice by the Department in the year 1996 asking to pay duty as same was iron ore concentrate chargeable to duty. Petitioner had also challenged the same before this Court and this Court dismissed the writ petition directing the parties to file appeal as the alternative remedy is available. Now the same party with same contention has come up to this Court of course due to demand made basing on amendment to Ch.26 w.e.f. 1.3.2011. Therefore, we refrain from deciding any issue raised before us and are of the considered view that since efficacious remedy by way of filing appeal before the CESTAT is available, the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther stated that the petitioner was not registered with the Central Excise Department during the relevant period as the sized Iron Ore produced by it was exempted from payment of excise duty under Notification No.4/2006-CE dated 1.3.2006 which exempts Ores under Chapter Headings 2601 to 2617 of Chapter 26 of the First Schedule to the Central Excise Tariff Act, 1985 (hereinafter called CETA, 1985 ) from the payment of Excise Duty. 3. In the Union budget for the year 2011-2012, Chapter Note 4 to Chapter 26 of the First Schedule to the Central Excise Tariff Act, 1985 was inserted to state that the process of converting Ores to Concentrates will amount to manufacture and after such insertion the opposite party-Department started investigation into the processes undertaken by the petitioner to find out whether it amounts to manufacture. 4. The petitioner carries out the mining of Iron Ore to obtain the Run of the Mines (for short, ROM) which is a term referring to the material extracted from the Mines. It is explained in the petition that ROM excavated from the mines is brought to the Crushing Plant of the petitioner and this ROM consists of lumps of different sizes. Neither o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . But the Department slapped with two more show cause notices vide C No.V(26)15/Adjn/B-II/89/2014/3699-A dated 25.2.2015 and C No.V (26)15/Adjn/B-II/28/2015/7447A dated 16.4.2015 demanding an amount of ₹ 42,45,70,233/- for the period of February 2012 to March 2014 and an amount of ₹ 17,96,15,969/-for the period from April 2014 to November 2014, respectively. The personal hearing was granted to the petitioner and the petitioner submitted that the case has already been decided in their favour vide CBEC Circular No.332/1/2012-TRU dated 17.2.2012 and the demand made should be accordingly dropped. Learned Commissioner concluded the hearing and without visiting the mines and understanding the process undertaken by the petitioner, passed the impugned order on 30.11.2015 by confirming the demand of ₹ 63,73,51,977/- under Section 11A of the Central Excise Act, 1944 along with equal amount of penalty under Section 11 AC of the Central Excise Act read with Rule 25 of the Central Excise Rules, 2002 with an additional penalty of ₹ 5,000/- under Rule 27 of the Central Excise Rules, 2002 for not taking Central Excise Registration. Not only this but also the learned Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which have been submitted to process normal ore to the metallurgical industries. 7. It is stated in the counter that processes undertaken by the petitioner are normal to the metallurgical operation for extraction of metals and therefore, nothing but the crushing, screening, grinding, washing etc. are meant to separate the impurities associated with the natural ores. These processes are carried out for transporting the ores from the pit mouth of the mines to the metal extracting plants, otherwise there will be heavy transportation cost. Thus, the concentrates as covered under Chapter 26 of CETA, 1985 are products which emerge as to render the ores as they emerge from mines to a stage capable of be used in metallurgical process. Since Chapter 26 of CETA, 1985 deals with mineral products under Section-V of HSN classification, it deals with natural products as they emerge as ores in Chapter 26 as the abbreviated HSN clearly explains, it is mere physical transition from ores in lumps to ores in concentrate which the chapter covers. Moreover, sub-heading 26011110 covers iron ore lumps (60% Fe or more), 26011120 covers Iron Ore Lumps (below 60% Fe), same being the case with ir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reening do not amount to Concentration. According to him under CETA of 1985 there is no definition of term Concentrates but term Ores is defined under Chapter Note 2 of Chapter 26 of the First Schedule to the CETA 1985 stating that for the purpose of headings 2601 to 2617, the term Ores means minerals of mineralogical species actually used in the metallurgical industry for the extraction of mercury. Again it is stated that headings 2601 to 2617 do not, however, include minerals which have been submitted to processes not normal to the metallurgical industry. As the term concentrate is not defined in the First Schedule to the CETA, 1985 for which HSN Explanatory Notes may be referred to as the said Note defined Concentrates by stating that Concentrates applies to Ores which have had part of all of the foreign matter removed by special treatments. Since the loose materials are required to be removed from Ore by a simple mechanical process of screening and making them to ores, such a process will not amount to any process of Concentration as the ore is not being subjected to any special treatment. So, it is submitted that the learned Commissioner has failed to distinguish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue neutrality cannot be accepted as show cause notices have alleged suppression and misstatement and therefore, credit in terms of Rule 9 (1)(b) of the Cenvat Credit Rules, 2004 will not be available. 12. Mr. R. Raghavan, learned Senior Advocate for the petitioner also submitted that provisions of Section 35B of the Act is not applicable in the present case and the order of the Commissioner is passed being violative of Articles 14, 19 (1) (G) and 265 of the Constitution of India. It is submitted that in case of appeal under Section 35-B the compulsory pre-deposit under Section 35-F of the Act is hardship on the part of the petitioner and as such the impugned order itself violates the fundamental right of the petitioner. The impugned order is violative of principles of natural justice as it is well settled that same order has been passed without application of mind and demands are therein ex facie, unsustainable for any reason. It is also submitted for the petitioner that no penalty is imposable and no interest is chargeable although the learned Commissioner has erred in law by imposing the penalty and the charge interest on the demand. He cited the decision of the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the learned Standing Counsel for the Revenue that the Concentrate have reference to physical rate of strengthening the ores in lumps minus mud and gang materials to a form to be used for metallurgical process and in that scheme no way of metallurgical content is to decide on the classification as per the HSN Note to Chapter 26 of CETA, 1985. It is clear that while Ferrous content is of relevance for Ores , Concentrates are products emerging in the physical process of metallurgy for which the percentage of ferrous content is not relevant. According to her, the process of crushing and screening of iron ores by petitioner gives rise to Iron Ore concentrate in terms of Chapter Note 4 of Chapter 26 of the First Schedule to Central Excise Tariff Act, 1985 for which such process amounts to manufacture. So, the order passed by the opposite party No.2 making the product of the petitioner dutiable is undoubtedly correct order. 15. It is submitted by the learned Standing Counsel for Revenue that crushing and screening are physical operation for manufacture of iron ore concentrate from iron ore and the two phases of crushing and screening makes liberation of sized iron ore f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal, if so advised, and may raise all such contentions there. 18. Points for consideration:- (i) The first and foremost point is to be decided whether the writ petition is maintainable in view of the pleadings made by both the parties. DISCUSSIONS POINT NO.(i) : 19. After dropping the prayer for declaring the concerned Circular of the CBEC as ultra vires, there remains only prayer to quash the impugned order of the Commissioner of Central Excise as the same is illegal, improper. Further it is prayed to direct the Central Excise, Customs, Service Tax Appellate Tribunal (hereinafter called CESTAT ) not to insist for pre-deposit under Section 35-F of the Act in the event of filing appeal before the CESTAT. On the other hand, the learned Standing Counsel for the Revenue has strongly contended that there is clear provision under Section 35-B of the Act to file appeal before the CESTAT against the impugned order passed by the Commissioner of Central Excise and this is not a case where the writ petition should lie when there is efficacious remedy available under the statute. Learned counsel for the petitioner submitted that even if there is efficacious remedy available u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terials used in the manufacture of goods which are exported to any country or territory outside India; (c) goods exported outside India (except to Nepal or Bhutan) without payment of duty; [(d) credit of any duty allowed to be utilized towards payment of excise duty on final products under the provisions of this Act or the rules made thereunder and such order is passed by the Commissioner (Appeals) on or after the date appointed under section 109 of the Finance (No. 2) Act, 1998 :] Provided further that the Appellate Tribunal may, in its discretion, refuse to admit an appeal in respect of an order referred to in clause (b) or clause (c) or clause (d) where (i) in any disputed case, other than a case where the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment is in issue or is one of the points in issue, the difference in duty involved or the duty involved; or (ii) the amount of fine or penalty determined by such order, does not exceed [ two lakh rupees]; From the aforesaid statutory provision, it appears that against any decision passed by the Commissioner of Central Excise as an adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner had also challenged the same before this Court in W.P.(C) Nos.13201 and 13437 of 1996 and this Court vide order dated 30.7.1997 dismissed the writ petition directing the parties to file appeal as the alternative remedy is available. Now the same party with same contention has come up to this Court of course due to demand made by the O.P. No.2 basing on amendment to Ch.26 w.e.f. 1.3.2011. 23. In view of the aforesaid analysis, we refrain from deciding any issue raised before us. We are of the considered view that since efficacious remedy by way of filing appeal before the CESTAT is available, we hereby direct the petitioner to challenge the impugned order before the appellate authority under Section 35-B of the Act and raise all such contentions raised before us within a period of two weeks from today and in the event of filing appeal, the appellate authority will dispose of the same early by hearing both the parties and both parties are free to raise respective contentions as raised before us and also any other materials to which they think it proper to address. In view of hardship pleaded by petitioner, we further direct that the petitioner would make 5% of the demand of duty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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