2014 (9) TMI 766 - AT - Central Excise

Claiming exemption on extracting gold from gold ore - Exemption under Notification No. 5/2006-C.E., dated 1-3-2006 - Held that - The explanatory notes to Chapter 71.08 also clearly provide that the heading excludes gold ores. Therefore it is difficult to conclude that gold includes gold ore. In our opinion because of subsequent amendments made to the notifications and on that basis interpretation of notification has to be different is not correct. The notifications have to be read as they are worded. Only in case of ambiguity or doubt and when the terms are not clear, there may be a requirement to go to some other definitions/notifications, history of taxation, etc. In our opinion the notification here is quite clear and there cannot be any dispute that appellants are converting gold ore into Dore bar and gold ore cannot be considered as any form of gold. Therefore the appellant in our opinion has not been able to make a prima facie case on merits about applicability of exemption notification. - stay granted partly.

Summary

Issues involved:
1. Interpretation of Notification No. 5/2006-C.E. regarding duty exemption for primary gold and gold bars.
2. Whether gold ore can be considered as any form of gold for the purpose of exemption.
3. Applicability of extended period for duty demand.
4. Requirement of deposit for stay against recovery of adjudged dues.

Issue 1: The case involved the interpretation of Notification No. 5/2006-C.E. regarding duty exemption for primary gold and gold bars. The duty demand of a significant amount was confirmed for the period from January 2007 to March 2011, along with penalties imposed on the appellant and individuals. The contention was whether the appellants were eligible for exemption under the said notification. The tribunal considered the submissions made and concluded that a consolidated view was sufficient for the stay applications.

Issue 2: The main argument revolved around whether gold ore can be considered as any form of gold for the purpose of exemption. The Revenue contended that exemption is available only when primary gold is obtained by the conversion of any form of gold, excluding gold ore. The tribunal analyzed the legislative intent, Central Excise Tariff Act, and the notification itself to determine that gold ore cannot be equated to any form of metallic gold. The tribunal concluded that gold ore cannot be considered as any form of gold, and the appellant failed to make a prima facie case for the applicability of the exemption notification.

Issue 3: The tribunal also addressed the applicability of the extended period for duty demand. Despite arguments and investigations, the tribunal found that two views were possible regarding the invocation of the extended period. Considering the ambiguity and the letter from DGCEI in 2010, the tribunal gave the benefit of doubt to the appellant. It was decided that the issue of the extended period required more detailed consideration, and the appellants made out a prima facie case against its invocation.

Issue 4: Lastly, the tribunal discussed the requirement of a deposit for the stay against recovery of adjudged dues. The appellants were directed to deposit a specific amount within a stipulated time frame, and compliance was to be reported accordingly. Subject to this requirement, the balance adjudged dues were waived, and a stay against recovery was granted during the pendency of appeals. The operative part of the order was pronounced in court on a specific date.