TATA STEEL LTD. versus UNION OF INDIA & ORS.

Citation: [2015] 6 S.C.R. 29 · Decided: 17-03-2015 · Supreme Court of India · Bench: H.L. DATTU · Disposal: Disposed off
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Judgment (excerpt)

[2015] 6 S.C.R. 29 
TATA STEEL LTD. 
v. 
UNION OF INDIA & ORS. 
(Civil Appeal Nos. 2938-2939 OF 2015) 
MARCH 17, 2015 
[H. L. DATTU, CJI., MADAN B. LOKUR AND 
K. SIKRI, JJ.] 
A 
B 
A. 
Mineral Concession Rules, 1960: rr. 648, 64C - Coal c 
- Royalty- Whether royalty is payable on processed coal 
that is coal consumed or removed from the boundaries of 
the leased area in a beneficiated form or on the raw or 
unprocessed or Run-of-Mine (ROM) coal at the pit head- In 
the case of SAIL, it was held by Supreme Courton 10.8.1998 D 
that royalty is chargeable in accordance with s. 9 of Mines 
and Mineral Act on the quantity of coal extracted at the pit 
head-After decision in SAIL, Government issued notification 
dated 25.9.2000 inserting rr.648 and 64C whereby ROM 
minerals after being processed in the leased area were E 
chargeable to royalty on processed minerals - Held: In view 
of insertion of r. 648 and 64C, the levy of royalty on coal has 
now been postponed from the pit head to the stage of removal 
of the coal (whether unprocessed or ROM coal or whether 
beneficiated coal) - In view of decision in Central Coalfields 
F 
Ltd., TISCO and Tata Steel is entitled to refund of royalty 
from 10. 8. 1998 to 25. 9. 2000 - For the period from 25. 9. 2000 
onwards, T/SCO is obliged to pay royalty as per r.648 and 
r. 64C of the Rules - Mines and Minerals (Development and G 
Regulation) Act, 1957 - s. 9 - Coal - Royalty. 
Disposing of the appeals, the Court 
HELD: 1. A plain reading of Rule 648 of the MCR 
clearly suggests that the leased area mentioned therein H 
29 
30 
SUPREME COURT REPORTS 
[2015) 6 S.C.R. 
A has reference to the boundaries of the leased area given 
to a lease holder. Sub-rule (1) provides that if the ROM 
mineral is processed within the boundaries of that 
leased area, then royalty will be chargeable on the 
processed mineral removed from the boundaries of the 
B leased area. However, if the ROM mineral is removed 
without processing from the boundaries of the leased 
area then in terms of sub-rule (2) royalty will be 
chargeable on the unprocessed ROM mineral. Rule 648 
of the MCR is silent about removal of a mineral from the 
c mine/pit-head but which is not removed from the 
boundaries of the leased area. This is a clear pointer 
that royalty is to be paid by the lease holder only on 
removal of the mineral from the boundaries of the leased 
0 
area. 
Similarly, Rule 64C of the MCR relates to royalty 
on tailings or rejects. As far as Tata Steel is concerned, 
its computation given in the Convenience Volume 
indicates that royalty is paid and payable on middlings 
and tailings. Rule 64C of the MCR makes it clear that 
E royalty is payable on rejects when they are sold or 
consumed after being dumped. There is nothing to 
indicate in Rule 648 and Rule 64C of the MCR that coal 
has been put on a different pedestal from other minerals 
mentioned in the MMDR Act read with the Second 
F Schedule thereto. [Paras 77 to 79] [61-F; 62-A-D, F-G, H; 
63-A] 
2. With effect from 251h September, 2000 when 
these rules were inserted in the MCR, royalty is payable 
G on all minerals including coal at the stage mentioned in 
these rules, that is, on removal of the mineral from the 
boundaries of the leased area. For the period prior to 
that, the law laid down in Central Coalfields Ltd. will 
operate, as far as coal is concerned, from 101h August, 
H 1998 when SAIL was decided, though for different 
TATA STEEL LTD. v. UNION OF INDIA & ORS. 
reasons. [Para 80] [63-D-E] 
State of Orissa v. Steel Authority of India Ltd. (1998) 6 
SCC 476: 1998 (3) SCR 1074; National Mineral 
Development Corporation Ltd. v. State of M.P (or 
NMDC).- (2004) 6 sec 281: 2004 (2) Suppl. SCR 1; 
Mis Central Coalfields Ltd. v. State of Jharkhand 
decided by Supreme Court in CA 5651 of 2005 
dtd.25.7.2006 - relied on. 
National Coal Development Corporation Ltd. State of 
Orissa AIR 1976 Orissa 159; National Coal 
Development Corporation Ltd. State of Orissa (1998) 
6 sec 480 - referred to. 
Case Law Reference 
1998 (3) SCR 1074 
relied on. 
Paras 3, 13 to 15, 
60, 61, 63, 67' 69, 
72 to 74, 80, 82, 87 
31 
A 
B 
c 
D 
2004 (2) Suppl. SCR 1 relied on. 
Para 57, 64, 68, 69, 
E 
72 
AIR 1976 Orissa 159 
referred to. Para 12, 87 
(1998) 6 SCC 480 
referred to. Paras 12, 51 
CIVILAPPELLATE JURISDICTION: Civil Appeal Nos. 
F 
2938-2939 of 2015. 
From the Judgment and Order dated 12.03.2014 of the 
High Court of Jharkhand at Ranchi in W.P. (C) Nos. 1°50
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