Process of Crushing and Screening on Iron Ore can be classified as Iron Ore Fines, Exemption from Payment of CVD sustain: CESTAT [Read Order]

The Mumbai bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that the process of crushing and screening iron ore can be classified as iron ore fines and can avail exemption from payment of CVD.

Shri Vipin Jain, Shri Vishal Agarwal & Shri Abhishek Kapadia represented the appellant and Shri S.K. Mathur represented the respondent.

The appellant engaged in the manufacture of iron ore pellets. One of the raw materials required for the same is iron ore fines.  18 consignments of iron ore fines imported by the appellant from Vale International SA, Switzerland, which had described the goods as Iron ore Carajas Sohar (iron ore fines). The appellant classified the iron ore fines under CTI 2601 11 31 and claimed exemption from payment of CVD in terms of the notification dated 17.03.2012, which grants complete exemption from payment of excise duty to “ores”. In the course of the investigation, statements of the personnel of the appellant and the Custom House clearing agent were recorded and issued a show-cause notice stating that the appellant was not entitled to exemption.

 The appellant stated that the consignment of iron ore fines had been imported from the Oman Plant of Vale International. The said iron ore fines were nomenclated by Vale International as Iron ore Carajas Sohar and the same was formed by blending two products imported from Vale International Brazil namely, Iron ore Carajas and Iron Ore concentrate.

It was observed that the Circular clarifies that ores that have been merely subjected to the processes of crushing and screening, cannot be said to have been concentrated, as it does not result in the removal of part or whole of the foreign matter. Further observed that the respondent failed to establish the process alleged with evidence which proves, that other processing had taken place at Carajas, Para, Brazil.

Justice Dilip Gupta, president & Mr C J Mathew, Member Technical observed that the process of crushing and screening undertaken on Iron Ore after they have been mined at Carajas, Brazil and subsequent blending at Oman with 5-10% iron ore concentrate would result in classification of the goods imported under CTI 2601 11 31 as Iron Ore fines which were entitled to the benefit of exemption from payment of CVD under the notification dated 17.03.2012 and set aside the impugned order passed by the Principal Commissioner. The appeal was allowed.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.