R.BANUMATHI, J. - (1.) IN these writ petitions, the Petitioner, interalia, challenges the validity of Rules 64B and 64C of the Mineral Concession Rules, 1960 inserted by the Central Government, Ministry of Mines and the petitioner also challenges the demand of royalty raised by the State of Jharkhand on the "processed coal"(washed coal) contending that royalty is payable only on Run -Of -Mine (ROM) extracted by it at the rate prescribed in the Second Schedule and liability to pay royalty is not postponed after processing. Additionally, WP(C) No. 2995 of 2008 also questions the demand of royalty on de -shale rejects on the ground that it does not fall within the category of A to G of Colliery Control Order and is non -gradable and thus, is not a "mineral" liable for payment of royalty under the Second Schedule of the Mines and Mineral (Development and Regulation) Act, 1957. The petitioner also seeks for refund of royalty paid in excess of rates at Run -of -Mine (ROM) stage during the period from November, 2008 and also the deposits made in compliance of the interim orders in the writ petitions.
(2.) THE Petitioner, Tata Steel Limited, is a company incorporated under the Companies Act. The Petitioner, Tata Steel Ltd., holds mining leases for coal in the State of Jharkhand. In WP(C)Nos. 2995 and 2999 of 2008, the Petitioner, Tata Steel, holds a mining lease of coal over an area of 13007 Bigha in various villages in the district of Ramgarh (erstwhile Hazaribagh), which is also known as West Bokaro Colliery, and the above mine is a captive coal mine. The above mines are captive coal mines, i.e. coal produced or raised from the above leased area is solely for self use or consumption. The Petitioner has two washery plants within the leased area where the raw coal produced from the mine is washed to improve the quality of grade of the coal for being sent for its use in its Steel Plant at Jamshedpur. In W.P (C) Nos.1504 and 1505 of 2009, the petitioner holds six self amalgamated mining leases of coal over an area of 3511.63 acres in various villages in the district of Dhanbad for a period of 99 years, which comes under the administrative control of Jamadoba Group of Collieries of Tata Steel. The above mines are captive coal mines. In the above leased area, the petitioner has two washery plants and the petitioner has also a captive power plant. In the District of Dhanbad, the Petitioner, Tata Steel, also holds five self amalgamated mining leases of coal over an area of 1996.19 acres in various villages for a period of 99 years, which comes under the administrative control of Bhelatand Group of Collieries of Tata Steel. In Bhelatand group of collieries, the petitioner has two washery plants and a captive power plant. In Jamadoba Group of Collieries, Jamadoba Coal Processing Plant is situated within the leasehold area, likewise, in Bhelatand Group of Collieries, Bhelatand Coal Processing Plant is situated within the leasehold area. The above coal mines of the petitioner are captive coal mines, i.e. coal produced or raised from the mines in the above leased area is solely for self -use for its steel plant at Jamshedpur. The process of washing generates clean coal, middlings, tailings and rejects, each of which has an end -use. After washing of coal in the washery plant, clean coal/steel grade of coal is sent to Petitioners own steel plant at Jamshedpur for production of iron and steel. The middlings and rejects are used by the petitioner in the respective power plants situated in the aforesaid collieries. Some quantity of middlings and tailings and rejects generated from the washery are subsequently sold to end users after obtaining permission from the authority. In CWJCNo.1/1984(R), the petitioner sought declaration that it was liable to pay royalty on tonnage of the washed coal, when it is removed from the coal washery. Vide order dated 7.8.1990 passed in CWJC No.1/1984(R), learned Single Judge held that royalty is payable on the weightage of the washed coal and accordingly, the petitioner paid royalty on the basis of weightage of the washed coal till 1998. Subsequently, in the case of State of Orissa Vs. Steel Authority of India Ltd. [(1998) 6 SCC 476], Honble Supreme Court, while interpreting Section 9 of the MMDR Act in respect of mineral of "Dolomite", held that the entire mineral extracted is exigible to levy of royalty and the royalty cannot be levied on quantity of mineral obtained after processing. After the aforesaid decision of the Supreme Court, the petitioner represented before the District Mining Officer, Hazaribagh, vide letter dated 23rd September, 1998, informing that it has to pay royalty on raw coal ­ Run -of -Mine (ROM) - extracted with effect from 10th August, 1998, i.e. the date of the judgment of the Supreme Court in the case of Steel Authority of India Limited. It was rejected by the District Mining Officer, Hazaribagh, vide letter dated 27.9.1998, on the ground that the issue between the parties stood settled by the court decision dated 7.8.1990 passed in CWJC No.1/1984(R) and the petitioner cannot derive any advantage of the subsequent decision of the Supreme Court. The order of the District Mining Officer was challenged by the petitioner in CWJC No.3040/1998(R). The stand taken by the District Mining Officer had been upheld by the learned Single Judge, vide order dated 1st March, 2000 passed in CWJC No.3040/1998(R). The said order dated 1st March, 2000 passed in CWJC No.3040/1998(R) was challenged in LPA No.117/2000.Vide judgment dated 23.7.2002, the Division Bench of this Court held that the decision rendered in the case of Steel Authority of India Limited is not only binding upon the parties before the Supreme Court, but law having laid down is binding on all being a nature of judgment under Article 141 of the Constitution of India. The Division Bench held that as per decision of the case of Steel Authority of India Limited, the petitioner to pay royalty on the coal extracted. The Division Bench further held that since the State of Bihar has been reorganized since 15th November, 2000, now in place of State of Bihar, the State of Jharkhand will be charging royalty and the petitioner shall not ask for refund of excess royalty, if deposited. Being aggrieved by the decision passed in LPA No.117/2000, the State of Jharkhand preferred an appeal before the Supreme Court in Civil Appeal No.307/2004. Being aggrieved by the direction not to seek refund of excess royalty, Tata Steel preferred an appeal in the Supreme Court in Civil Appeal No.303/2004 and the said appeals are pending.
(3.) SUBSEQUENT to the decision in the case of Steel Authority of India Limited, in exercise of power under Section 13 of the Mines and Mineral (Development and Regulation) Act, 1957, vide notification GSR No.743(E) dated 25.9.2000, the Ministry of Mines has inserted Rule 64B and Rule 64C in the Mineral Concession Rules, 1960, (MCR). Rule 64B deals with charging of royalty in case of minerals subjected to processing. Rule 64C deals with royalty on tailings or rejects.;