The Mumbai bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that processes of crushing and screening of Iron Ore are not special processes for removing foreign matter and holds assessee is eligible for Countervailing duty (CVD) exemption.
The appellant, M/s Amba River Coke Ltd. is engaged in the manufacture of iron ore pellets. One of the raw materials required for the same is iron ore fines. The appellant classified the iron ore fines under CTI 2601 11 31 and claimed exemption from payment of CVD.
During the course of assessment, samples were drawn by the Customs Authorities and sent for testing and holds that the goods were correctly classified by the appellant and were consequently entitled to the benefit of exemption. Later based on enquiry the department by placing reliance on an extract from the website of Vale from which an
inference was drawn that the beneficiation process to remove impurities by use of water was being undertaken by Vale at Carajas, and the goods were classified under CTI 2601 11 50.
The counsel for the appellant submitted that ores that have been merely subjected to the processes of crushing and screening cannot be said to have been concentrated, as the said processes do not result in removal of part or whole of the foreign matter, there is not even an iota of evidence to even suggest, let alone prove, that further or other processing had taken place at Carajas
The Tribunal has observed that the finding of the department that Vale International was using water for the removal of impurities has been arrived at by an incorrect extrapolation of the pictorial representation.
The Coram of Mr. Justice Dilip Gupta, President and Mr. C.J. Mathew, Member (Technical) while allowing the appeal has held that “the process of crushing and screening undertaken on the 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 and would consequently be entitled to the benefit of exemption from payment of CVD under the notification dated 17.03.2012”.
Advocates Mr. Vipin Jain, Mr. Vishal Agarwal, and Mr. Abhishek Kapadia appeared for the Appellant, and Mr. S.K. Mathur, Special Counsel appeared for the Department.
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