STERLITE INDUSTRIES (INDIA) LTD. Vs. CCE

JUDGEMENT

(1.) ONE of these appeals is by the Department and the other by the assessee. During the period of dispute [July 1997 to November 2002], the assessee was engaged in the manufacture of copper anodes [Heading 74.02, CETA Schedule]. They were also manufacturing oxygen [Heading 28.04, CETA Schedule] within the factory premises, for captive consumption. The oxygen plant was designed to produce gaseous oxygen of 95% purity. The mode of captive consumption of oxygen is discernible from the following process of manufacture of final products.

(2.) COPPER concentrate (raw material) contains copper, sulphur, iron, silica and lime. Oxygen is used to remove elements other than copper from the concentrate, by heating in a smelter -furnace. Apart from assisting the combustion of the ore in the smelter -furnace, the oxygen combines with the sulphur in the ore to form sulphur dioxide. The gases from the furnace are passed through electrostatic precipitators to remove the suspended impurities and then through absorption towers to remove unwanted gases. The mixture of sulphur dioxide (SO2) and oxygen is led to a mixing chamber wherein the gases react to form sulphur trioxide (SO3) in the presence of Vanadium pentoxide used as catalyst. The resultant sulphur trioxide gas is absorbed in sulphuric acid to form 'Oleum'. This product is subsequently dissolved in calculated quantity of water to produce 98% pure sulphuric acid.

(3.) LEARNED Commissioner rejected the assessee's claim for exemption under Notification No. 67/95 ibid, but allowed them the benefit of exemption under the aforelisted Notifications in respect of the oxygen used in the manufacture of sulphuric acid cleared without payment of duty. In the result, the entire demand of duty stood vacated.