Hira Power & Steels Pvt. Ltd. Vs Commissioner of Customs (CESTAT Hyderabad)
The appeals were filed against orders of the Commissioner (Appeals) denying the benefit of exemption from payment of Countervailing Duty (CVD) under Notification No. 04/2006-CE dated 01.03.2006. The exemption was denied on the ground that the imported goods, declared as “Manganese Ore,” had undergone processes such as washing, removal of waste, crushing, and sizing, thereby converting them into “Manganese Concentrates,” which are not eligible for the exemption.
The appellants had imported manganese ore lumps classified under Tariff Item 2602 00 10 and claimed exemption from CVD. The department provisionally assessed the Bills of Entry and later finalized them by denying the exemption, holding that the processes applied amounted to “manufacture” under Chapter Note 4 to Chapter 26 of the Customs Tariff Act, resulting in a distinct product, i.e., concentrate. The Commissioner (Appeals) upheld this view.
The appellants contended that the issue was already decided in their favour in an earlier Tribunal decision, which had attained finality. They argued that the imported goods remained “ores” and that processes like crushing and sizing are normal preparatory processes in mining and do not amount to concentration or manufacture. They relied on HSN explanatory notes and a CBIC circular to argue that concentrates arise only when special treatments remove foreign matter to improve the grade. It was further argued that no evidence was produced by the department to establish that the goods were concentrates, and that the appellants had furnished supporting documents such as certificates and laboratory reports. The appellants also contended that interest could not be demanded if the duty itself was not payable.
