Ore Confusion - What about Board's Earlier Clarification?
JUST a month before the above clarification was given, the Board's BRAIN, the TRU had issued another clarification on Dutiability of "iron ore" and "iron Ore concentrates"
The Clarifications reads as,
In Budget 2011, a Note was inserted in Chapter 26 of the First schedule to the Central Excise Tariff to deem the process of converting "Ores'' into "Concentrates" as a process amounting to manufacture. Both ores and concentrates are classifiable under chapter 26 and while the term 'Ore' is defined in Note 2 of the said chapter, the term 'concentrate' is not. HSN Explanatory Note, spell out the scope of the term "Concentrate" as under:
"For the purposes of headings 2601- 2617, the term 'concentrates' applies to ores which have had part or all of the foreign matter removed by special treatments either because such foreign matter may hamper subsequent metallurgical operations or with a view to economical transport.
From the above definition, it is clear that removal of part or all of foreign material is envisaged for conversion of ores into concentrates. Ministry of Mines have "clarified that no special treatment is involved in the crushing and screening of ore and the end product can be termed as a concentrate only when the grade of ore is sufficiently improved through beneficiation. Federation of Indian Mineral Industries have also pointed out that several processes (in addition to crushing and screening) such as milling, hydraulic separation, magnetic separation, floatation & Concentrate thickening have to be undertaken for ores to be converted into concentrate.
Hence, it is clarified that the levy of excise duty is attracted only in cases where the product meets the definition of concentrate as per HSN notes, 'that is, 'ores which have had part or all of the foreign matter removed by special treatments either because such foreign matter may hamper subsequent metallurgical operations or with a view to economical transport'.
TRU loves its notifications and clarifications so much that they do not like to part with them. The above clarification was not made public, but was sent in a letter to the Chief Commissioners.
The Circular No. 9/2012 referred to in the previous item, was issued by the OSD in the Tariff Unit of the Board. Obviously, TRU had not sent him a copy of its clarification and he issued his own clarification.
What should the poor importer or the Customs officer do now? If ore is sent through a sieve to remove minute particles for economy of transport, does it become concentrate? And in how many mines excise duty is being collected on concentrates?
CBEC F. No. No. 332/1 /2012-TRU, Dated: February 17, 2012