# "' INDIAN HARD METALS (P) LTD v. UNION OF INDIA

- **Citation:** [1979] 2 S.C.R. 469
- **Court:** Supreme Court of India
- **Decided:** 1978-11-30
- **Bench:** R. S. Sarkaria, V. D. TuLzAPURKAR, A. P. Sen
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/indian-hard-metals-p-ltd-v-union-of-india-7613
- **Pages:** 7

## Headnote

469
Indian Customs Tariff Act, 1934 (32 of 1934), Item Nos. 26, 70(7)
and
87-Wolfram ore containing tungsten ore of 75%-Whether assessable under
Item 26 or Item 70(7) or under residuary lte1n 87.
The appellant imported wolfram ore. The Customs Authorities classified the
said ore under the residuary Item 87 of the Indian Customs Tariff and charged
:luty at the, rate of 60% ad valorem. Metallic ores (Item 26) and cobalt, cbro~
mium, tungsten magnesium etc.
[Item No. 70(7)1 are allowed to be imported
free of duty.
The aforesaid classification was upheld by the Assistant Collector of Customs
and the appeal to the Commissioner of Customs was dismissed. The appellant's
revision petition under s. 131 of the Customs Act to the Government was also
A
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dismissed.
D
In the appeal to this Court it was contended on behalf of the appellant that
the imported ore contained a concentrate of 74% of tungsten from wolfram
and the rest were impurities, that the concentration was the result of •selective
mining' process which involves crushing, washing and magnetic separation that
in better quality ore the content may be as high as 79 % and that even after
being subjected to such process, the ore concentrate does not cea,,e to be tungsE
ten 'ore' within the contemplation of Item 70(7) of the Indian Customs Tariff.
Allowing the appeal,
HELD: 1. The goods imported had to be classified as imported ore, falling
either under Item 26 or Item 70(7) of the Import Tariff, and no duty was
leviable on them. The appellants are entitled to refund of duty paid by them.
!475 El
F
2. The mere fact that the percentage of tungsten in the ore concentrate in
the instant case is about 75% does not take the case out of the ratio of this
Court's decision in Minerals & Metal Trading Corporation of India Ltd. v.
Union of India & Qrs., [1973] I SCR 977.
[471 HJ
3. There is ample authority for the view that the tungsten content in the
wolfram ore of marketable quality may vary from 60 to 79%, and a concentration within these limits of the metal in the ore can bo attained simply by a
process of a "selective mining", that is by physical process not involving any
chemical change in the metal. Wolframite of ordinary merchantable quality contains 60 to 70% of tungsten, while wolframite ore of better commercial quality
contains 75 to 79% of the metal.
[473 C, 475 DJ
"Tungsten" by C.J. Smithe/ls Chapman-Hall-Introduction, referred to.
4. The finding of the appellate Collector of Customs that such a high dogree
(75%) of the tungsten metal virll1ally free from impurities in the material, could
be atlain<d only by some chemical manufacturing process and not merely lty
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II
470
SUPREME COURT REPORTS
[1979] 2 S.C.R.
A
cru!hing, washing or magnetic separation, is not based on any evidence whatever.
It is contrary to the opinion of experts and authorities on the subject, which
were brought on tbe record. [475 BJ
CIYIL APPELLATE JURISDICTION : Civil Appeal No. 571 of
1969.
B
Appeal by Special Leave from the Order dated. the 6th September,
c
1968 /26th October 1968 of the Government of India, Ministry of
Finance (llipartment of Revenue and Insurance) bearing No. 5262 of
1968.
!. L. Nain, Mrs. A. K. Verma for J. D. Dadachanji & Co., for the
Appellant.
R. B. Datar and Miss A. Subhashini, for the Respondent.

## Text

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INDIAN HARD METALS (P) LTD.
V.
UNION OF INDIA
November 30, 1978
[R. S. SARKARIA, V. D. TuLzAPURKAR AND A. P. SEN, JJ.]
469
Indian Customs Tariff Act, 1934 (32 of 1934), Item Nos. 26, 70(7)
and
87-Wolfram ore containing tungsten ore of 75%-Whether assessable under
Item 26 or Item 70(7) or under residuary lte1n 87.
The appellant imported wolfram ore. The Customs Authorities classified the
said ore under the residuary Item 87 of the Indian Customs Tariff and charged
:luty at the, rate of 60% ad valorem. Metallic ores (Item 26) and cobalt, cbro~
mium, tungsten magnesium etc.
[Item No. 70(7)1 are allowed to be imported
free of duty.
The aforesaid classification was upheld by the Assistant Collector of Customs
and the appeal to the Commissioner of Customs was dismissed. The appellant's
revision petition under s. 131 of the Customs Act to the Government was also
A
B
c
dismissed.
D
In the appeal to this Court it was contended on behalf of the appellant that
the imported ore contained a concentrate of 74% of tungsten from wolfram
and the rest were impurities, that the concentration was the result of •selective
mining' process which involves crushing, washing and magnetic separation that
in better quality ore the content may be as high as 79 % and that even after
being subjected to such process, the ore concentrate does not cea,,e to be tungsE
ten 'ore' within the contemplation of Item 70(7) of the Indian Customs Tariff.
Allowing the appeal,
HELD: 1. The goods imported had to be classified as imported ore, falling
either under Item 26 or Item 70(7) of the Import Tariff, and no duty was
leviable on them. The appellants are entitled to refund of duty paid by them.
!475 El
F
2. The mere fact that the percentage of tungsten in the ore concentrate in
the instant case is about 75% does not take the case out of the ratio of this
Court's decision in Minerals & Metal Trading Corporation of India Ltd. v.
Union of India & Qrs., [1973] I SCR 977.
[471 HJ
3. There is ample authority for the view that the tungsten content in the
wolfram ore of marketable quality may vary from 60 to 79%, and a concentration within these limits of the metal in the ore can bo attained simply by a
process of a "selective mining", that is by physical process not involving any
chemical change in the metal. Wolframite of ordinary merchantable quality contains 60 to 70% of tungsten, while wolframite ore of better commercial quality
contains 75 to 79% of the metal.
[473 C, 475 DJ
"Tungsten" by C.J. Smithe/ls Chapman-Hall-Introduction, referred to.
4. The finding of the appellate Collector of Customs that such a high dogree
(75%) of the tungsten metal virll1ally free from impurities in the material, could
be atlain<d only by some chemical manufacturing process and not merely lty
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470
SUPREME COURT REPORTS
[1979] 2 S.C.R.
A
cru!hing, washing or magnetic separation, is not based on any evidence whatever.
It is contrary to the opinion of experts and authorities on the subject, which
were brought on tbe record. [475 BJ
CIYIL APPELLATE JURISDICTION : Civil Appeal No. 571 of
1969.
B
Appeal by Special Leave from the Order dated. the 6th September,
c
1968 /26th October 1968 of the Government of India, Ministry of
Finance (llipartment of Revenue and Insurance) bearing No. 5262 of
1968.
!. L. Nain, Mrs. A. K. Verma for J. D. Dadachanji & Co., for the
Appellant.
R. B. Datar and Miss A. Subhashini, for the Respondent.
The Judgment of the Court was delivered by
SARKAru:A, J.-This is an appeal by special leave against \m order
of the Government of India, Ministry of Finance (Department of
o
Revenue and Insurance).
The order was passed by Shri B. Sen,
Commissioner (Revision 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 centi ad valorem
amounting to
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Rs. 62,871.03P., instead of classifying the imported ore either under
item 26 of item 70(7) which are free from duty.
These relevant
items, as entered in tlle Imported Tariff, may be set out as nuder
Item
No.
F
26
700)
G
87
Name of Article
Nature of
Standard
duty
rate of
Metallic ores all sorts except ochres and x Free
x
other pigments ores and antimony ore.
Cobalt chromium tungsten magnesium x
Free
and all other nonferrous virgin metals
not otherwise specified.
SECTION XXII (ARTICLES NOT OTHERWISE SPECIFIED)
All other articles not otherwise specified. Revenue
60 per cent
ad valorem.
The classification made under the residuary item 87 at the time
elf the import was upheld by the Assistant Collector of Customs;
and the Commissioner of Customs dismissed the appeal of the assessee
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by an order dated July 31, 1965, holding that the 381 bags of wolfram
ore was correctly assessable at the rate of 60 per ceut duty under
item 87 of the Indian Customs Tari.ff, and not being covered either
. ...,...
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HARD METALS LTD. v. UNION (Sarkaria, J.)
471
by entry 26 or 70(7) of the Indian Customs Tariff, was not duty-free.
The appellant preferred a
revision petition under s.
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 a concentrate of 74% of tungsten from wolfram
and the rest were impurities.
This concentration is the result of
'selective mining' process which invol~s 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
-.,A.per cent. By the aforesaid concentrating process, the ore is convterted
~to ore of commercial quality. It is maintained that in commercial
parlance wolfram ore of marketable quality must contain a minimum
of 65 % to 70% 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 & Metals Trading Corporation of India Ltd.
v. Union of India & Ors. ( 1) '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 July 31, 1965, wherein the Appellate Collector of Customs
has observed that no evidence was adduced by the importer to sub__,,,- - stantiate the contentions that the ore in question had undergone no
chemical process before being imported, and that the inference is that
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such high puri!kation of the concentrate could have been possible
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only by applying process other than by water, crushing and magnetic
separation. It is stressed that the decision of this Court in Minerals
& 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,
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the percentage of the wolfram contained in the goods concerned is
little over 7 5 % .
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 the ratio of this Court's decision cited by Mr.
Nain.
(I) [1973] 1 S.C.R. 997.
H
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472
SUPREME COURT REPORTS
[1979] 2 S.C.R.
In Minerals & Metals Trading Corporation of India Ltd. (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 cone
centrate in powder form as in that case. On appeal by the importer,
-:;;.
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. the Appellate Collector heild that the goods in (luestion were lithe manufactured form made by special specifications by dressing and __
were thus not "ores".
The Central Go~rnment rejected the revision
~ I--
application filed by the appellant, holding that the examination by the
Chemists showed that the uniform granules of the material were not
D
only separated from rock but also from various. impurities and had
been subjected to such processing as would take them out of the
category of metallic ore mentioned in Item 26. This Court, speaking
through Grover J., a11owed the importer's appeal, with these apposite
observations :
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"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 wjiich
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 ilnported is in powder or granule
fonri 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
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HARD METALS LTD. v. UNION (Sarkaria, !.)
473
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 be ore."
(emphasis added)
There is ample authority for the view that the tungsten content
in the wolfram ore of marketable ,quality may :vary from 60 to 79
_... per cent, and a concentration within these limits, of the metal
~
in the ore can be attained simply by a process of a "selective mining",
that is, by physical process not involving any chemical change in the
metal.
The following passage (vide Anncxure fl' in ithe record) culled out from the Introduction to the treatise on "Tungsten" by C.J.
SmitheUs Chapman-Hall, fully bears out this conclusion :
"Mining.-Tungsten ores, although so widely
distributed
rarely occur in massive form.
The ores are usually found
in narrow veins, but in ,some of the rich deposits the veins
may in places be several mCllrcs wide.
Cassiterite is
the
commonest metallic mineral associated with tungsten, but
minerals captaining bismuth, molybdenum, lead and copper
are frequently found; pyrite aud arsenopyrite are objectionable minerals, which may be present in appreciable amounts,
and other common minerals are quartz and fluorite.
There
are several kinds of ore deposits classified as segregates, pegmatites replacement deposits, veins and placers.
The tungsien content of the ore as it is mined is usually from 0.5
to 2 per cent, although it amounts to 6 per cent in rare
instances.
The concentration of tungsten ores depends
chiefly on gravity methods, taking advantage of the high
density of the metal, although floatation me-thods are also
used. The concentrates, which contain 60-70 per cent W03,
or in the better qualities 75-79 per cent should be virtually
free from S.P, As, Sb, Bi, Cu, Sn, Ti, and Mo.
Magnetic
methods are employed to separate the tin and tungsten in the
concentrates. Scheelite, however, is non-magnetic, but when
it occurs with garnet, as it does in Tasmania, the garnet may
be removed magnetically. The concentration of Wolframite
ores is difficult on account of their mica-like formation. Excessive crushing leads to high losses in tabling and as far as
12~978 SCI/78
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SUPREME COURT REPORTS
[19791 2 s.c.R.
possible the ore should be separated when coarsely
crushed."
(Emphasis supplied)
There is on the record another Certificate in the form of a letter,
dated February 3, 1965, from the Director, National Metallurgical
Laboratory, Jamshedpur, addressed to the Controller
of
Customs,
Calcutta, in which it is opined : "The wolfram ore is always selectively mined in the technical terminology .... such "selective mining"
does not constitute a manufacturing process.
Unless selective mining
is done, the tungsten ore cannot be exported or even sold in the
country of its origin. In view of the above, 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 has passed through the manufacturing process. By the
__,-
_
expression 'selecti'.'ely mined', we mean that the wolfram
ore
is
detached and taken out from the rock in which it is embedded '1nd
this is done by crushing the rock and sorting out piece of wolfram
ore therefrom either by hand or by washing or magnetic separation."
Then, there is another Certificate from R. Y. Briggs & Co. Pvt.
Ltd., who claim to have been analysing various ores and minerals
including wolframite for over 60 years.
According to these experts,
wolframite is always concentrated as part of the mining operation.
The normal method is by washing the crushed ore, thereby freeing
the mineral from the gangue.
These experts have further certified
that the wolfram ore, which they have analysed for M/s. India Hard
Metals, is processed except for physical concentration by washing. It
may be observed that in the Minerals & Metal Trading Corporation
(ibid), also, this Court had relied upon a similar Certificate from R. V.
Briggs & Co.
Still, another Certificate, dated January 13, 1965, which is more
or less to the same effect as the Certificate of the National Metallurgical
Laboratory, was brought in evidence. A similar Certificate from this
Laboratory was relied upon as authentic expert opinion in the earlier
case, also, decided by this Court.
No authority or expert -0pinion has been cited before us that a
concentration of 75 per cent tungsten in wolframite ore of commercial
H
quality, cannot be achieved merely by 'selective mining',
i.e.
the
physical process of crushing, washing, gravitation, magnetic separation or the like.
Nor is there any evidence on the record to show
,
HARD METALS LTD. v. UNION (Sarkaria, J.)
47 5
that the mined ore was subjected to any chemical process which
caused a change in the chemical structure of the ore. The finding of
the Appellate Collector of Customs that such a high degree (75%)
of tungsten metal virtually free from impurities in the material, could
be attained only by some chemical manufacturing process and not
merely by crushing, washing or magnetic separation, is not based on
any evidence whatever. It is contrary to the opinions of experts and
authorities on the subject, which were brought on the record.
It is
evident from the passage extracted from Smithells' treatise, and the
~ther Certificates of experts, mentioned above, that in order to bring
mined wolframite ore to a marketable quality, it has to be concentrated by physical methods, such as, crushing, washing, gravitation.
p nagnetic separation etc.
And by such physical process only, a con-
,..--
cenfration of W03 varying from 60 per cent to 79 per cent in the
-rore can be achieved.
Wolframite (W03) of ordinary merchantable
quality contains 60 to 70 per cent of tungsten, while wo!framitc ore
of better commercial quality contains 75 to 79 per cent
of
the
metal.
In the light of the above discussion, there is no manner of doubt
that the goods imported by the appellants had to be classified as imported ore, falling either under item 26 or item 70(7) of the Import
Tariff, and as such, no duty was levliable on them.
The appellants
A
B
c
D
are, therefore, entitled !O the refund of the duty paid by th'cm on the
E
goods in question.
In the result, the appeal is allowed with costs, and the impugned
orders including the Order dated October, 26, 1968, of the Central
Government, are set aside.
The respondents are directed to make
appropriate orders for refunding the amounts collected from the appellants by way of import duty on the goods in question.
N.V.K.
Appeal allowed.
F