SARKARIA - (1.) THIS is an appeal by special leave against an order of the Government of India, Ministry of Finance (Department of Revenue and Insurance). The order was passed by Shri B. Sen, Commissioner (Reversion applications), Government of India, Indian Hard Metal (P) Ltd., the appellant, had imported 15 metric tonnes of wolfram ore from London. The Customs authorities classified the said ore under item 87 of the Indian Customs Tariff and charged duty at the rate of 60 per cent ad valorem amounting to Rs.62,871.03 P., instead of classifying the imported ore either under item 26 or item 70 (7) which are free from duty. These relevant items, as entered in the Import Tariff, may be set out as under: JUDGEMENT_155_4_1979Html1.htm
(2.) THE classification made under the residuary item 87 at the time of the import was upheld by the Asstt. Collector of Customs; and the Commissioner of Customs dismissed the appeal of the assessee by an order dated 31/07/1965, holding that 381 bags of wolfram ore was correctly assessable at the rate of 60 per cent duty under item 87 of the Indian Customs Tariff, and not being covered either by entry 26 or 70 (7) of the Indian Customs Tariff, was not duty-free. THE appellant preferred a revision petition under Section 131 of the Customs Act to the Government of India who declined to interfere and dismissed the revision. Hence this appeal. Mr. Nain, appearing for the appellant, submits that the ore in question contained concentrate of 74% of tungsten from wolfram and the rest were impurities. This concentration is the result of selective mining process which involves crushing, washing and magnetic separation. It does not bring about any chemical change in the metal. At the minepit in its natural form, the ore is not of marketable quality, because the tungsten content in it, then, is hardly 0.5 to 2 per cent. By the aforesaid concentration process, the ore is converted into ore of commercial quality. It is maintained that in commercial parlance wolfram ore of marketable quality must contain a minimum of 65 per cent to 70 per cent of of the metal, and in one of better quality, the content may be as high as 79%. Even after being subjected to such process, the ore concentrate does not cease to be tungsten 'ore' within the contemplation of item 70 (7) of the Indian Import Tariff. In support of his contentions, learned counsel has relied upon the judgment of this Court in Minerals and Metals Trading Corporation of India Ltd. v. Union of India, (1973) 1 SCR 997 : (AiR 1972 SC 2551) and certain Certificates of experts, as also an extract from the treatise on "Tungsten', by C. J. Smithells Chapman-Hall. As against this, Mr. Datar has drawn our attention to the order, dated 31/07/1965, wherein the Appellate Collector of Customs has observed that no evidence was adduced by the importer to substantiate the contentions that the ore in question had undergone no chemical process before being imported and that the inference is that such high purification of the concentrate could have been possible only by applying process other than by water, crushing and magnetic separation. It is stressed that the decision of this Court in Minerals and Metals Trading Corporation of India Ltd. (supra), is not applicable because in that case the percentage of tungsten in the ore was 65% only and that much concentration could be reached by physical process only, such as, crushing, washing etc.; while in the instant case, the percentage of the wolfram contained in the goods concerned is little over 75%.
(3.) IN our opinion, the mere fact that the percentage of tungsten in the ore concentrate in the instant case is about 75 per cent, does not take the case out of ratio of this Court's decision cited by Mr. Nain. In Minerals and Metals Trading Corporation of India Ltd. (AIR 1972 SC 2551) (supra), the appellant had imported 200 metric tons of wolfram concentrate from Russia, under a contract which prescribed minimum contents of 65% of W03, in the concentrate. The Customs authorities levied duty at the rate of 60% ad valorem under item 87 of the First Schedule. The appellant claimed refund on the ground that no duty was leviable as the goods imported was an "ore" and fell under item 27 or 70 (7) of the Import Tariff. The Assistant Collector of Customs held that the appellant was not entitled to refund because the term "ore" mentioned in the text of item 26 is confined to articles which are in form and condition in which they are mined and not as wolfram ore concentrate in powder form as in that case. On appeal by the importer, the Appellate Collector held that the goods in question were in the manufactured form made by special specifications by dressing and were thus not "ores". The Central Government rejected the revision application filed by the appellant, holding that the examination by the Chemists showed that the uniform granules of the material were not only separated from rock but also from various impurities and had been subjected to such processing as would take them out of he category of metallic ore mentioned in Item 26. This Court, speaking through Grover J., allowed the importer's appeal, with these apposite observations : "There is a good deal of force in the argument of Mr. Setalvad for the appellant that the normally acceptable merchantable quality of wolfram or tungsten contains a minimum 65% W03. This is the usable ore and it is in that sense that it is commercially understood. Wolfram ore when mined contains only 0.5 to 2 per cent W03 and in order to make it usable and merchantable ore with minimum 65% W03, concentration is necessary. If item 26 of the Import Tariff is to be restricted to wolfram being material containing 0.5 to 2 per cent W03, it would be mainly rock which can neither be imported in large quantity and which will have no market. The separating of wolfram ore from the rock to make it usable ore is a process of selective mining. It is not a manufacturing process. The important test is that the chemical structure of the ore should remain the same. Whether the ore imported is in powder or granule form is wholly immaterial. What has to be seen is what is meant in international trade and in the market by wolfram ore containing 60% or more W03. On that there is a preponderant weight of authority both of experts and books and of writings on the subject which show that wolfram ore when detached and taken out from the rock in which it is embedded, either by crushing the rock and sorting out pieces of wolfram ore by washing or magnetic separation and other similar and necessary process, it becomes a concentrate but does not cease to before." (emphasis added) ;