BIRLA COPPER LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) VIDE his impugned order Commissioner of Central Excise, Vadodara has confirmed demand of duty of Rs. 109.37 Crores (approx) against the appellant in respect of clearance of gold bars manufactured and cleared by them during the period May 2000 to Feb. 2003 by denying them the benefit of exemption Notfn. No. 6/2001 -C.E., dated 1.3.2000 and its successor notification No. 3/2001 -C.E. In addition, he has also confirmed payment of interest in terms of the provisions of Section 11AB of the Central Excise Act and imposed personal penalty of equivalent amount under Section 11 AC of the Act.

(2.) THE appellant, herein, Birla Copper are primarily engaged in the manufacture of Copper Cathodes classifiable under chapter 74. For the said purposes, they are importing copper ore in the form of concentrate. Though there is no dispute in respect of Copper Cathodes being manufactured by the appellant and cleared on payment of duty, for the sake of, clarity, we would refer to the manufacturing process of the same, in brief. Copper concentrate, as obtained by the appellant, is reacted in the smelting furnace at a high temperature in the presence of air and oxygen with an aim to increase the metal content and to obtain high purity of copper. Sulphide in the concentrate becomes sulphur dioxide and is removed as such, iron combines with silica and is removed with other impurities in the resulting slag. Copper sulphide and iron sulphide form "matte copper", which is then fed into a converter. In the converter, air is blown through the matte copper resulting in emergence of impure copper, sulphur dioxide gas and slag. The impure copper at this stage is called "blister copper" which is transferred to anode furnace where it is fire -refined. Molten copper so obtained is casted into shape of anodes which at this stage are of 99 -99.5%. Thereafter, the said copper anodes are electro -refined to get copper cathode of 99.9% purity. Electro -refining operations are carried out in non -metallic tanks called electrolytic cell. Copper cathodes emerge as final product in the said tank, taken out and are cleared on payment of duty by classifying the same as falling under heading 74.03.

(3.) IN the electrolyte, some anode impurities either dissolve or fall into the bottom of electrolytic cell. They are collected and are called anode slime. This collected anode slime, apart from the various impurities also, contains copper which is removed in an autoclave using sulphuric acid and oxygen and sent back to smelter. The remanant is decopperised anode slime and is in the form of black moist powder. This anode slime is now transferred to another section called Precious Metal Recovery (PMR) plant which was commissioned by the appellant in March 2000. From here starts the process of recovery of gold from the said anode slim and subsequent manufacture of gold bars, which is the subject matter of dispute in the present appeal.