9911796707
TMI Blog1998 (8) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... on judgement. The respondent, a manufacturer of iron, steel and allied products, entered into an agreement of lease in respect of land measuring 569.6 acres with the State Government in order to meet its own requirements of raw materials, namely, limestone and dolomite. Under the agreement, it was agreed that the respondent was liable to pay royalty on the minerals extracted. However, the dispute that arises for consideration out of the two judgments of the High Court is whether the respondent is liable to pay royalty on the quantity of mineral extracted as it is or on the quantity arrived at after the said mineral had undergone a processing to remove waste and foreign matters. It was the case of the appellants that the respondent was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Minerals (Regulation and Development) Act, 1957 (hereinafter called the Act ) and also clause 3 of Par V of the Lease Deed, held as follows :- A distinction has to be made between removal from the mine and removal from the leased area. If after the mineral is extracted from the mine, it undergoes some processing and during processing a part of the mineral is wasted and the wasted remains on the leased area and is not removed therefrom, the lessee cannot be asked too pay royalty on that portion f the wastage. On that view of the matter, the High Court quashed the demands, which were levied on the quantity of unprocessed minerals. Aggrieved by the order of the High Court, the present appeals are filed by special leave. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty in respect of any mineral removed or consumed by him or sublessee from the leased area after such commencement, at the rate for the time being specified in the Second Schedule in respect of that mineral. (Emphasis supplied) It is to be noted that the levy of royalty is in respect of minerals removed or consumed by the contractor from the leased ares. We have seen earlier the process that the mineral said to undergo before the same was removed form leased area. Section 9(1) of the Act also contemplates the levy of royalty on the mineral consumed by the holder of a mining lease in the leased area. If that be so, the case of the appellants that such processing amounts to consumption and, therefore, the entire mineral is exigi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the instant case also on tax can be levied or is leviable under the impugned Act if on mining activities are carried on. Hence, it is manifest that it is not related to land as a unit which is the only method of valuation of land under Entry 49 of List II, but is relatable to minerals extracted. Royalty is payable on a proportion of the minerals extracted........ ................................... ......................... For the reasons stated above, we hold that the High Court was not right in quashing the demands, which were rightly calculated and levied. The impugned judgments of the High Court are set aside and the O.J.Cs. filed by the respondent stand dismissed. The appeals are allowed accordingly with no or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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