# INDIALTD v. UNION OF INDIA & OTHERS

- **Citation:** [1973] 1 S.C.R. 997
- **Court:** Supreme Court of India
- **Decided:** 1972-08-24
- **Bench:** K. S. Hegde, A. N. Grover, D. G. Palekar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/indialtd-v-union-of-india-others-5752
- **Pages:** 7

## Headnote

/11dian Tariff Act-Import Tariff-A nnexure L-Entries 26, 70(7} &
81-Wolfranz Concentrate H'ith 6S(j;. W03 co11centration-Whether Jmporttlble, duly /re"-' <S Metallic .ore~Nor111n/ly ncct'ptable
n1erchm1tahlc
quality of 'ore·· alone relevant.
Jnterpretalion of statute.<i-Taxiug
statutes-Meaning in conunercial
sense and not' in sc~·e1Uific sense should be jollo1red.
The appellant imported 200 metric tons of wolfram
concentrate,
under a contract which prescribed minimum contents of 65% of W03 in
1he concentrate. Tue Customs authorities levied duty at the rate of 00%
amount under item 87 of the First Schedule. The appellant claimed refund on 1hc ground that no duty was leviable as the goods imported was
an "ore" and fell under item 26 or 70(7) of the Import tariff. Tue Aosislant Collector of Customs held that the appellant was not entitled to rerund because the tern1 '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 the present case. On
appeal by the appellant the Appellate Collector held that the goods
in
question were in the monufacturcd form made by special specifications by
dressing and v.;ere 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 fron1 rock_ hut also from various impurities· and had been
sub.1ccted to such processing as \vouttl take them· out of the category of
1nctallic ore 1ncntioned in entry 26.
In appeal 10 this Court the appellant contended that for the purp06es
,,f levy of duty under entry 26 the norma)ly
acceptable
merchantable
quality of wolfram (containing a minimum 65% W03) is relevant nnd
not wolfram in mined form.
Allowing the "ppeals,
HELD : Wolfram ore when mined contains only 5 to 2 per cent WOJ
aml 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
re~tricti::d to wolfram being n1aterial containing 5 to 2 per cent W03. H
would be mainly rock which can not be imported in large quantity and it
will have no market.
Jt is only usable ore with 65lJO W03 concentration
that is relevant for levy of duty. What bas to be seen is what is meant in
International trade and in the market by Wolfram ore containing 65% or
n1ore W03. ·The s::iid concentrate is achieved by seiecti,-e mining and
\Vashing or magnetic separation.
It docs not involve any manufacturing
or processing \Vith chemical for removing
impurities. The concentrate,
therefore. d1Jes not cease to be an 'ore) \vithin t:he 1neaning of Hem 26.
[1002C.F]
HELD. further, that in interpreliug items in trucing statutes resort
'hould be had not 10 the scientific or technical meaning buno the meaning
attached to them hy those dealing in them in their commercial sense.
.
~
fl002H] ·
997
998
SUPREME COURT REPORTS
[1973] l S.C.R.
ClVIL APPELLATE JURISDICTION :
C.A. Nos. 877-879
of
A
1967.
Appeal by speciat Jea.ve under Article 136 ( 1) of the Cousti·
tution of India· from the order No. 2846-2848 of 1966, dated
25th and 29th November, 1966 of the Govt. of India, Ministn
of Finance in Custom Revision Application.
·
ll
M. C. Setalvad, B. Sen, M. K.
Banerji,
P.
C.
/ihartari,
Ravinder Narain, D. N. Misra, J. B. Dadachandji, for the
appellant.
L. N. Sinha, Solicitor-General of India, S. N. Prasad,
B. D.
Sharma and S. P. Nayar, for the respondents.
S. V. Gupte, D. B. Engineer, I'. C. Bhartari and Ravindcr
C
t\'araii1, for the interveners.
The Judgment of •the Court was delivered by
Grover, 1.
These appeals by special leave are from an order
of the Government oi India passed in Novem®r 1966 refusing
to refund the duty charged on 200 metric tons of Wolfram Ore
imported by the appellant Corporation from the US.S.R.
D
The facts are not in dispute. In October 1953 the appellant
entered into a contrac

## Text

A
MINEl{ALS & METALS TRADING CORPORATION OF
B
c
D
E
G
INDIALTD.
v.
UNION OF INDIA & OTHERS
August 24, 1972
[K. S. HEGDE, A. N. GROVER AND D. G. PALEKAR, JJ.J
/11dian Tariff Act-Import Tariff-A nnexure L-Entries 26, 70(7} &
81-Wolfranz Concentrate H'ith 6S(j;. W03 co11centration-Whether Jmporttlble, duly /re"-' <S Metallic .ore~Nor111n/ly ncct'ptable
n1erchm1tahlc
quality of 'ore·· alone relevant.
Jnterpretalion of statute.<i-Taxiug
statutes-Meaning in conunercial
sense and not' in sc~·e1Uific sense should be jollo1red.
The appellant imported 200 metric tons of wolfram
concentrate,
under a contract which prescribed minimum contents of 65% of W03 in
1he concentrate. Tue Customs authorities levied duty at the rate of 00%
amount under item 87 of the First Schedule. The appellant claimed refund on 1hc ground that no duty was leviable as the goods imported was
an "ore" and fell under item 26 or 70(7) of the Import tariff. Tue Aosislant Collector of Customs held that the appellant was not entitled to rerund because the tern1 '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 the present case. On
appeal by the appellant the Appellate Collector held that the goods
in
question were in the monufacturcd form made by special specifications by
dressing and v.;ere 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 fron1 rock_ hut also from various impurities· and had been
sub.1ccted to such processing as \vouttl take them· out of the category of
1nctallic ore 1ncntioned in entry 26.
In appeal 10 this Court the appellant contended that for the purp06es
,,f levy of duty under entry 26 the norma)ly
acceptable
merchantable
quality of wolfram (containing a minimum 65% W03) is relevant nnd
not wolfram in mined form.
Allowing the "ppeals,
HELD : Wolfram ore when mined contains only 5 to 2 per cent WOJ
aml 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
re~tricti::d to wolfram being n1aterial containing 5 to 2 per cent W03. H
would be mainly rock which can not be imported in large quantity and it
will have no market.
Jt is only usable ore with 65lJO W03 concentration
that is relevant for levy of duty. What bas to be seen is what is meant in
International trade and in the market by Wolfram ore containing 65% or
n1ore W03. ·The s::iid concentrate is achieved by seiecti,-e mining and
\Vashing or magnetic separation.
It docs not involve any manufacturing
or processing \Vith chemical for removing
impurities. The concentrate,
therefore. d1Jes not cease to be an 'ore) \vithin t:he 1neaning of Hem 26.
[1002C.F]
HELD. further, that in interpreliug items in trucing statutes resort
'hould be had not 10 the scientific or technical meaning buno the meaning
attached to them hy those dealing in them in their commercial sense.
.
~
fl002H] ·
997
998
SUPREME COURT REPORTS
[1973] l S.C.R.
ClVIL APPELLATE JURISDICTION :
C.A. Nos. 877-879
of
A
1967.
Appeal by speciat Jea.ve under Article 136 ( 1) of the Cousti·
tution of India· from the order No. 2846-2848 of 1966, dated
25th and 29th November, 1966 of the Govt. of India, Ministn
of Finance in Custom Revision Application.
·
ll
M. C. Setalvad, B. Sen, M. K.
Banerji,
P.
C.
/ihartari,
Ravinder Narain, D. N. Misra, J. B. Dadachandji, for the
appellant.
L. N. Sinha, Solicitor-General of India, S. N. Prasad,
B. D.
Sharma and S. P. Nayar, for the respondents.
S. V. Gupte, D. B. Engineer, I'. C. Bhartari and Ravindcr
C
t\'araii1, for the interveners.
The Judgment of •the Court was delivered by
Grover, 1.
These appeals by special leave are from an order
of the Government oi India passed in Novem®r 1966 refusing
to refund the duty charged on 200 metric tons of Wolfram Ore
imported by the appellant Corporation from the US.S.R.
D
The facts are not in dispute. In October 1953 the appellant
entered into a contract with a Moscow concern for the purchase
of 200 metric tons of
Wolfram Concentrate.
The chemical
composition of the good~ apart from other components was to contain W03 1he minimum percentage being 65%. The Office of
the. Chief Controller of Imports and Exports, Government of
E
· India, granted an import license on November 21, 1963 permitting import of the aforesaid Wolfram Ore.
The goods arrived
in Bom'bay on January 14, 1964. It appears that certain tests
were carried out by the Deputy Chief Chemist of Customs. The
' customs authorities levied duty under item 87 of the First Schedule-Import Tariff, at the rate of 60% amounting to Rs. 4,13.
F
796.24.
The appellant paid that amount under protest.
The
appellant ~!aimed refund on the ground that no duty was leviable
as the goods imported fell either under item 28 or' 70(7) of the
said SchecluJe.
On September 14, 1964 the Assistant Collector
of Customs (Refund Section) held that the "goods imported were
in powder form and were found to be mainly composed of TungG
ston Oxide with small portion of iron and manganese ,pxides. The
!erm 'ore' mentioned in the text of item 26 T.C.T. is confined to
articles which are in the form of condition in which they are
mined.
As such, ores in powder form cannot qualify for assessm~nt u:i 26 J.C.T. as they are not in the condition in which they
are mined.
Further the goods imported are Wolfram Ore· ConH
centrate and not Wolfarm Ore as mixed.
Concentration of ore
i, considered a manufacturin~ process which will exclude its as-
~essment u/i 26 l.C.T."
•
A
ll
c
D
M.M.T.C. i-. UNION (Gro1•er, !.)
999
Three orders were passed by the Assistant Collector because
the goods had been imported in three consignments.
The matter
was taken in appeal to the Appellate Collector of Customs. He
disposed of the matter in January 1965.
Before him a good
deal of evidence was produced both from authoritative bpoks
and in the. shape of certificates from experts that the goods were
metallic ore.
The Appellate Collector, however, held that the
"goods in question were not subjected to simple washing
with
water but 'were made of special specifications by "dressing" and
are therefore not classifiable as 'ores' ".
The appellant then
took the matter in revision to the Government.
The order of
the Government was passed by the Joint Secretary on. November
25, 1966. According to his view examination of the sample of
goods showed that the goods were in the form of fairly uniform
granules.
Further they had been separated !!IOt only from the
rock but also from various other impurities and had been subjected to such processing as would1 take them out of the category
of metallic re.
Thus the correct position was that the good>
imported were intermediary articles between ore and metal and
had been correctly assessed under item 8 7.
The relevant entries in the Import Tariff contained in Annexure-L o.f the special leave petition may be set out :
---·---
Item
Na111e of Article
Nature of
Sta"ndard
E
No.
dl1ty
rate of• *
MINERAL PRODUCTS
26. M'!tallic ores all sorts except ochres and other pig·
ments ores and antimony ore
'70(7)
Cobalt chromium tungsten magnesiu1n and aii
other non.ferrous virgin metals not othern:isl! spe-
~<
Free
x
cified.
,
Free
F
SECTfON xxn (ARTfCLES NOT OTHERWISE srECJFIED)
G
H
87.
All other articles not otherwise specified
Revenue
GO percent
ad valerein"
The short question that has to be decided is whether' Wolfram
Ore W03 65 % falls within item 26 which covers metallic ores
of all sorts with the exceotions mentioned •therein. It is and cannot be disputed that Woifram ore which was imported does not
fall within the exceptions. All that had, therefore, to be determined by the authorities was whether such ore was a metallic
ore. In Stro11d's Judicial Dictionary, Vol. 3 pa;;e 2020. It is
stated that "ore" is a metal in its crude state seoarated from the
rock. In the well known treatise on TUNGSTEN, its Metallurgy, Properties and Applications by Colin J. Smithells
3rd
Edition., it is stated that Tungsten ores rarely occur in 1~assive
1000
SUPREME COURT REPORTS
[1973] l S.C.R.
form.
These ores are usually found in narrow veins. "The tungsten content of the ore as it is mined is usually 0.5 to 2 per cent ..
although it amounts to 6 per cent. in rare inS'lances.
The concentration of tungsten ores depends chiefly on gravity methods.
taking advantage of. the high density of the metal, although floatation methods are also used.
The concentrates, which contain
60-70 per cent W03" . , ...... " On page 12 of .Smithells' book
it is stated that tungstens are sold in Europe under Contracts A
and B given in Appendix I. The form of Contract A in the f_ppendix reads as follows :-
"Messrs
A
B
We have this day. . . . . . . . . . . . . . . . . . . . you the
C
following Chinese Wolfram Ore of good· merchantable quality, containing minimum 65% W03 ....
The certificate dated January 13, 1965 of Derby & C01npan'
co11tains the· following sta1ement :
"in accordance with International
Wolfram
Ore
Contract 'B' which is the standai.d fom1, on which the
vast majority oi. Wolfram ore concentrates are based,
such ore of normally acceptable merchantable quality
contains a minimum of 65% W03.
Wolfram bearing material as mined, contains frequently less than 0.5% of W03 and asmuch as a content of 2 % of W03 is rare.
In order to produce a
usable or>:o
concentration operations
are necessary
whkh involve cmshing, washing and
similar process
separating the useless gangue to bring it ~o a minimum
65% W03 content without which it is not regarded as
an acceptab\le wolfram ore or wolfram concentrate and
useless to
consuming
industries.
Basic
operations
bringing the material to such a
standard are not a
manufacturing process but form part oi. normal wolfralllite mining activities".
According to a letter dated February 3, 1965 from the Director
of . National Metallurgical Laboratory to 1he Controller of Custom> wolfram ore is always
selectively mined in the technical
terminology.
The selectively mined
tungsten
contains about
7% W03.
Such selective mining does not constitute a manuc
facturing process.
Unless selective mining is done the tungsten
ore cannot be exp'1rted or even
sold in
the country of
its origin.
Thus the import of selectively mined tungsten
ore containing 65% W03 or more should not be regarded as the
import of a product which has been manufactured overseas and
D
E
F
G
H
..
B
c
D
E
F
1:1
M.M.T.C. v. UNION (Grover, J.)
1001
has passed through the manufacturing process.
The expression
"selectively mined" means that the wolfram ore is detached and
taken out from the rock in which it is embedded and this is done
by crushing the rock and sorting out pieces of wolfram either by
hand or by washing or magnetic separation.
The appellant produced certificates from well known analytical Consulting & Technical Chemists.
According to R V. Briggs & Co who claim to
have been analysing various ores and minerals including wolframite for 'Over sixty years this ore is always concentrated as
part of the 'mining operations.
The normal method is by washing the crushed ore, there~ freeing the mineral from the gangue.
The certificate from Derby & Co. London has already been referred to. Alongwith the appellant's statement of the case an extract
from the Brussels Tariff nomenclature has been attached as annexuie A.
In Chapter XXVI with the heading Metallic Ore etc.
para 26.01 deals with Metallic Ores and Concentrates ....... .
The ,eleva11t and material portions from these extracts may be
reproduced :
"Ores are seldom marketed before
"preparation"
for subsequent metallurgical
operations.
The
most
important preparatory processes are those aimed
at
concentrating the ores.
For the purposes of the present hearing, the term
"concentrates" applies to ores which have had part or
all of ·th.c foreign matter
removed by special treatments, either because such foreign matter ·might hamper subsequent metallurgical operations or with a view
to economical transport.
Processes to which products, physic-chemiool
or
chemical OJJ'.!rations, provided that they are normal to
the preparation of the ores for the extraction of metal
':\Tith the ~xception .·of changes resulting from calcina'.
t;on, roasting or firing
(with or without agglomeration), such operations must
not alter the chemical
compos!tion of the basic
compound which furnishes
the desrred metal.
The physical or physico-chemical
operations mcl~de crush!ng, grindi~g, magnet~c separation, gravimetn~ separat10n, floatation, screemng, gradin11:, agelomerahon of powers (e.g., by sintering or pelleting) into
g~ins, balls or briquettes (whether or not with the ad-
~1tion of ~mall qua!1t!ties of binders), drying, calcinatton, roa~tmg to ox1d1se or magnetise the ore, etc. (but
not roastmg for purposes of sulphating, chloridatine
~.).
~·
1002
SUPREME COURT REPORTS
[1973] 1 S.C.R.
·The chemical processes are aimed at eliminating the
unwanted matter (e.g. dissolution)."
A
Among the ores specifically mentioned to which the !above statement applies is Tungsten "or Wolfram". As against this the only
evidence put in by the revenue consisted of the test -report of the
Deputy Chief Chemist lAnnexure E).
After giving the necessary
8
particulars it was stated by him that the samples were not ore as
mined.
We are wholly unable to comprehend how in order
to fall
under item 26 the ore has to be ias mined.
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 c
contains a minimum 65% W03. This is the unable ore and it is
in that sense
that
i.t
is
commercially understood.
Wolf11am ore when mined contains only S to 2 per cent W03 and in
order to make it usable and merchantable ore with minimum
65% W03, concentration is
necessary.
If items
26 of.
the
Import Tariff is to be restricted to Wolfram being material conJ)
taining 5 to 2 per cent W03 it would be mainly rock whicr 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
E
to be seen is what is meant in international trade and in the market by wolfram ore containing 60% 0r more W03. On th&t there
is a preponderation weight of authority both of experts and books
and of writings on the sub_ject which show
that wolfram. ore
when detached and taken out from the rock in which it is embedded either bv crmhing the rock and s0rting out pieces of wolF
fram or by washing or magnetic separation and other sirriilar
and necessary process it becomes a concentrate but does
not
cease to be ore.
Unless the ore is roasted or treated with any
chemical it cannCl't be classed as processed.
It is common ground that the wolfram ore which was imported by the appellant.s was never sub.iected to any process of
G
roasting or treatment with chemicals to remove the impurities. It \
thus remained wolfram ore concentrate containing 65 % W03
which was of the merchantable quality and was known commercially as such and imported as ore.
Apart from all this it must
be remembered that in interpreting items in Taxing Statutes resort should be had not to the scientific or technical
meaning
H
but to the meaning attached to them bv those dealing in them in
their commercial sense.
There can, therefore. be ·no manner of
doubt that the goods imported by the appellants fell within item
A
B
M.M.T.C. v. UNION (Grover. J.)
I 003
26 of the Import Tariff and no duty was leviable on them. The
::\ppellants were entitled to the refund of the amounts which were
paid by them by way of duty.
For the reasons given above the . appeals are allowed with
costs and the impugned orders including that of the Central Government dated 25 /29th November 1966 are hereby set aside. The
respondents are directed to make appropriate orders for refunding the amounts collected from the appellants by way of duty on
the goods in question. One hearing fee.
Appeals allowed.
S.B.W.