H.C.MISHRA,J. - (1.) Heard, Mr. Abhishek Manu Singhvi, learned Sr. Counsel for Tata Steel Limited, Mr. Ajit Kumar, learned Advocate General for the State of Jharkhand and Mr. Rajiv Sinha, learned Assistant Solicitor General of India, for the Union of India.
(2.) In all these writ applications the petitioner Tata Steel Limited, has challenged the vires of Rules 64-B and 64-C of the Mineral Concession Rules, 1960, praying for the following reliefs:- (i) An appropriate writ, order or direction declaring Rules 64-B and 64-C of the Mineral Concession Rules, 1960 as unconstitutional and ultra vires Section 9 of the Mines and Mineral (Development and Regulation) Act , 1957; (ii) An appropriate writ, order or direction declaring Rules 64-B and 64-C of the Mineral Concession Rules, 1960 as ultra vires Section 13 of the Mines and Mineral (Development and Regulation) Act , 1957; (iii) An appropriate writ, order or direction declaring Rules 64-B and 64-C of the Mineral Concession Rules, 1960 as discriminatory and in violation of for creating artificial classification not based on any intelligible differentia by providing differential treatment in levy of royalty between coal put through a washing process within the leased area and coal put through a washing process outside the leased area; (iv) A further writ, order or direction declaring that charging of royalty on "processed mineral" as contemplated by Rule 64-B of the Mineral Concession Rules, 1960 is beyond the ambit and purview of Section 9 of the Mines and Minerals (Development and Regulation) Act , 1957 and ultra vires and unenforceable; (v) A further writ, order or direction declaring that charging of royalty on "sale of processed mineral" as contemplated by Rule 64-C of the Mineral Concession Rules, 1960 is beyond the ambit and purview of Section 9 of the Mines and Minerals (Development and Regulation) Act , 1957 and ultra vires and unenforceable; (vi) In the alternative to prayer (iv) and (v), an appropriate writ, order or direction declaring that, in any event, Rules 64-B and 64-C of the Mineral Concession Rules, 1960 inserted by the Central Government, Ministry of Mines have no applicability to hydrocarbons such as coal and lignite. Apart from the aforementioned main reliefs in all these writ applications, the petitioner Tata Steel Limited has also challenged the various demand notices issued by the District Mining Officer, Hazaribag / Ramgarh / Dhanbad, raising demands of additional royalty in accordance with Rules 64-B and 64-C of the Mineral Concession Rules, 1960.
(3.) The petitioner Tata Steel limited is a Company incorporated under the Companies Act and is engaged in manufacture of iron and steel having its steel plant at Jamshedpur, in the State of Jharkhand. The petitioner is having mining lease over two collieries in the Districts of Ramgarh and Dhanbad. In the District of Ramgarh the collieries of the Tata Steel are "West Bokaro Colliery" whereas in the District of Dhanbad, it is having "Jharia group of collieries". Admittedly both these group of collieries are the captive collieries of the Tata Steel limited, meaning thereby, that the coal extracted in these collieries are used after its necessary washing and beneficiation only for the purpose of the manufacture of steel at its steel plant at Jamshedpur, whereas the middlings, tailings, rejects, de-shale etc., generated during the washing process, are partly used as fuel in the petitioner's own power plants situated within some of the collieries and partly sold to the consumer after obtaining necessary permission from the concerned authorities. It may be stated that the coal extracted directly from the mines are known as run-of-mines coal, or ROM coal, and we are informed that ROM coal may either be Washery Grade-IV Coal, or any of the higher grades, up to Steel Grade. We are also informed that in all the collieries of the petitioner Tata Steal Limited, the ROM coal extracted directly from the colliery are the Washery Grade-IV Coal and by the process of washing they are made Washery Grade-III Coal, Washery Grade-II Coal, Washery Grade-I Coal, Steel Grade-1I Coal, and ultimately Steel Grade-1 Coal. Steel Grade coal are used in the manufacture process of iron and steel. In the process of washing the middlings, tailings and rejects are also produced, which are used by the petitioner in its power plants situated in the collieries, and some of them are also sold to end users after obtaining permission from the concerned authority. The process of extracting coal from the mines creates the liability of making the payment of royalty to the State in view of Section 9 of the Mines and Mineral (Development and Regulation) Act , 1957 (hereinafter referred to as the " MMDR Act ") and Rules 64-B and 64-C of the Mineral Concession Rules, 1960. Section 9 of the MMDR Act reads as follows:- "9. Royalties in respect of mining leases.- (1) The holder of a mining lease granted before the commencement of this Act shall, notwithstanding anything contained in the instrument of lease or in any law in force at such commencement, pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub- lessee from the leased area after such commencement, at the rate for the time being specified in the Second Schedule in respect of that mineral. (2) The holder of a mining lease granted on or after the commencement of this Act shall pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub- lessee from the leased area at the rate for the time being specified in the Second Schedule in respect of that mineral. (2-A) ........................ (3) ........................" Similarly Rules 64-B and 64-C of the Mineral Concession Rules, 1960 read as follows:- "64-B. Charging of royalty in case of minerals subjected to processing- (1) In case processing of run-of-mine is carried out within the leased area, then, royalty shall be chargeable on the processed mineral removed from the leased area. (2) In case run-of-mine mineral is removed from the leased area to a processing plant which is located outside the leased area, then, royalty shall be chargeable on the unprocessed run-of-mine mineral and not on the processed product. 64-C. Royalty on tailings or rejects. - On removal of tailings or rejects from the leased area for dumping and not for sale or consumption, outside leased area such tailings or rejects shall not be liable for payment of royalty; Provided that in case so dumped tailings or rejects are used for sale or consumption on any later date after the date of such dumping, then, such tailings or rejects shall be liable for payment of royalty. The Journey So Far ;