2003 (8) TMI 279 - AT - Central Excise

Summary

Issues:
- Waiver of deposit of unpaid duty and penalty
- Interpretation of exemption notifications for gold bars manufacturing process
- Application of Rule 6 of Cenvat Credit Rules for exemption eligibility

Analysis:
1. The case involved an application for the waiver of deposit of unpaid duty and penalty amounting to Rs. 45.98 crores out of a total demand of Rs. 109.37 crores. The applicant, engaged in copper refining, converted copper concentrate into various forms of copper, including gold bars. The dispute arose when duty on gold bars was not paid, leading to multiple notices demanding duty payment based on the manufacturing process of gold bars.

2. The applicant claimed exemption under Entry 184 of Notification No. 6/2000, stating that gold bars were manufactured from gold powder, which was derived from Dore anode containing gold. However, the Commissioner rejected this claim, asserting that the starting point of gold manufacture was anode slime, not gold. The Tribunal questioned this conclusion, drawing parallels to a cotton garment made from cotton fabric, not directly from cotton in the fields.

3. The applicant also argued for exemption under Notification No. 67/95, contending that captively consumed goods were exempted, and Rule 6 of Cenvat Credit Rules obligations were fulfilled. The departmental representative disagreed, emphasizing the requirement of discharging obligations before clearance, which was allegedly not met in this case.

4. The Tribunal found the issues arguable, especially regarding the application of Rule 6 and the eligibility for exemptions. While acknowledging that 60% of the duty had been paid, it waived the deposit of the remaining duty and penalty. The Tribunal accepted the applicant's request for an expedited hearing due to the significant duty amount involved and the repetitive nature of the issue.

In conclusion, the judgment delved into the complexities of exemption notifications, manufacturing processes, and rule applications in the context of gold bar production, ultimately providing relief to the applicant by waiving a portion of the duty and penalty while scheduling an expedited hearing for further resolution.