Royalline Resources Ltd Vs Commissioner of Customs (CESTAT Hyderabad)
The appeal concerns denial of exemption from Countervailing Duty (CVD) on imported manganese ore under Notification No. 04/2006-CE. The department reclassified the imported goods as “manganese concentrate” instead of “manganese ore” on the ground that the goods had undergone processes such as washing, removal of waste, crushing, screening, and sizing prior to import. Based on this, the exemption benefit was denied and duty demand was confirmed by the adjudicating authority and upheld by the Commissioner (Appeals).
The appellant argued that the imported goods remained “ore” and that the processes undertaken were routine preparatory steps in the mining industry that do not amount to concentration or beneficiation. They relied on HSN explanatory notes, circulars, and judicial precedents to contend that crushing and sizing do not change the chemical composition or result in a new product. It was also argued that the evidentiary burden was discharged through submission of certificates, laboratory reports, and invoices proving the goods were manganese ore.
The department, however, maintained that the processes undertaken on the ore amounted to beneficiation and resulted in “concentrate,” especially in light of Chapter Note 4 to Chapter 26 (effective from 01.03.2011), which deems conversion of ore into concentrate as “manufacture.” It was argued that removal of foreign material and improvement in quality through such processes would bring the goods within the definition of concentrate, thereby making them ineligible for exemption meant only for ores.
