M/S. STAR INDUSTRIES versus COMMISSIONER OF CUSTOMS (IMPORTS), RAIGAD

Citation: [2015] 11 S.C.R. 570 · Decided: 07-10-2015 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Dismissed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2015] 11 S.C.R. 570 
A 
M/S. STAR INDUSTRIES 
v. 
COMMISSIONER OF CUSTOMS (IMPORTS), RAIGAD 
B 
(Civil Appeal No.6088 of 2013) 
OCTOBER 07, 2015 
[A.K. SIKRI AND R. F. NARIMAN, JJ.] 
Central Excise Tariff Act, 1985: Chapter 26 -
c Notification No. 412006-CE - Claim for exemption under the 
Notification -
Import of' Roasted Molybdenum Ore 
Concentrate for manufacture of Ferro-Alloys - Notification 
No. 412006-CE at Serial no. 4 mentions the item 'Ore' and 
excise duty payable is 'Nil' - Whether 'Ore Concentrate' 
D imported by the assessee eligible for complete exemption 
from payment of additional duty of custom/CVD under the 
Notification - Held: By virtue of Note 4, Concentrate has to 
be necessarily treated as different from Ores which is deemed 
as manufactured product after Molybdenum Ore underwent 
E the process of roasting - Since Ores and Concentrates are 
treated as two distinct items and Notification No.412006-CE 
exempts only 'Ores', Concentrates automatically falls outside 
the purview of said Notification. 
F 
Dismissing the appeal, the Court 
HELD: 1. It is very clear from the reading of the 
judgment in Hindustan Gas case that basic and the 
common thread which runs throughout the decision is 
G that subjecting ore to the process of roasting does 
not amount to manufacture. This very basis gets 
knocked off with the amendment carried out in the year 
2011 with the insertion of Note 4. Note 4 now 
categorically mentions that the process of converting 
H 
570 
M/S. STAR:~ 'fiJSTRIES v. COMMISSIONER OF 
571 
CUSTOM::> tiMPORTS), RAIGAD 
ores into concentrates would amount to 'manufacture'. A 
Therefore, it cannot now he argued that roasting of 
ores and converting the same into concentrates would 
not be manufacture. 
With the addition of Note 4, a 
legal friction is created treating the process of 
converting ores into concentrates as manufacture. B 
Once this is treated as manufacture, all the 
consequences thereof, as intended for creating such a 
legal friction, would automatically follow. The inevitable 
implications are that Molybdenum Ore is different from 
concentrate. That is inherent in treating the process as C 
'manufacture' inasmuch as manufacture results in a 
different commodity from the earlier one. The purpose 
of treating concentrate as manufactured product out 
of ores is to make concentrates liable for excise duty. 0 
Otherwise, there :was no reason to deem the process of 
converting ores into concentrates as manufacture. 
[Paras 28] (590-C-G; 591-D-E] 
2. Chapter Note 2 was retained even after insertion 
of Chapter Note 4. No doubt, as per Chapter Note 2, 
E 
'ores' means minerals of mineralogical species actually 
used in the metallurgical industry for the extraction of 
mercury, of the metals of heading 2844 or of the metals 
of Section XIV or XV, even if they are intended for F 
non-metallurgical purposes. As per this note, metals of 
Section XV would be included in the term 'ores'. 
However, after the insertion of Chapter Note 4, these 
two Notes·, namely, Note 2 and Note 4 have to be read 
harmoniously. Note 2, when seen along with Note 4, has G 
to govern itself in limited territory. 
On · the basis of 
deeming fiction created by Note 4, it is held that the 
process of roasting of Ore amounts to. manufacture and 
it creates a different product known as Concentrate, 
for the purpose of exemption notification, which H 
572 
SUPREME COURT REPORTS 
(2015] 11 S.C.R. 
A exempts only 'Ores' it is not possible to hold that 
Concentrate will still be covered by the exemption 
notification. Therefore, harmonious construction of Note 
2 and Note 4 would be that in those cases when Note 4 
applies and Ores becomes a different product, it ceases 
B to be Ores. As the Legislature has intended to treat ores 
and concentrates as two distinct items and Notification 
No. 412006-CE exempts only 'ores', concentrates 
automatically falls outside the purview of said 
notification. Exemption notifications are to be construed 
C strictly and even if there is some doubt, benefit thereof 
shall not enure to the assessee but would be given to 
the Revenue. [Paras 30, 31] [591-G-H; 592-A-D; 
F-H; 593-A] 
D 
E 
F 
G 
Hyderabad Industries Limited and Anr. v. Union 
of India and Ors. 1999 (3) SCR 471: (1999) 5 SCC 
15; Minerals and Metals Trading Corporation v. 
Union of India and Ors. 1973 (1) SCR 997: (1972) 
2 sec 620 - held inapplicable. 
Mis. Navopan India Ltd., Hyderabad v. Collector 
of Central Excise

Excerpt shown. Read the full judgment & AI analysis in Lexace.