2023 (6) TMI 454 - AT - Central Excise

Benefit of Exemption under N/N. 67/95- CE dated 16.03.1995 - intermediate goods - Oxygen Gas - captive consumption - final product namely Sulphuric Acid is exempted from Central Excise Duty - period December, 2008 to November, 2013 - whether the oxygen captively consumed in the manufacture of dutiable Copper Cathodes as well as exempted Sulphuric Acid can be denied the benefit of exemption Notification No. 67/95- CE dated 16.03.1995? HELD THAT - The matter is no longer res- integra . The issue has already been settled by the Hon ble Supreme Court in the case of UNION OF INDIA OTHERS VERSUS M/S. HINDUSTAN ZINC LTD. 2014 (5) TMI 253 - SUPREME COURT . The decision of the Hon ble Supreme Court in the case of Hindustan Zinc has also been followed by this Tribunal in the case of STERLITE INDUSTRIES INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, TIRUNELVELI 2015 (11) TMI 1247 - CESTAT CHENNAI where it was held that the requirements of 57CC were fully met in the way in which the Respondent was maintaining records and inventory and the mischief of recovery of 8% under Rule 57 CC on exempted sulphuric acid is not attracted. The impugned Orders-In-Original are without any merit and is set aside - appeal allowed.

Summary

Issues Involved:
1. Whether the oxygen captively consumed in the manufacture of dutiable Copper Cathodes as well as exempted Sulphuric Acid can be denied the benefit of exemption Notification No. 67/95-CE dated 16.03.1995.

Summary:

Issue 1: Exemption Notification No. 67/95-CE Applicability
The department contended that since the final product, Sulphuric Acid, is exempted from Central Excise Duty, the appellant should have discharged the duty on their intermediate product, oxygen gas, which is captively consumed. The exemption Notification No. 67/95-CE dated 16.03.1995 was argued to be inapplicable to the oxygen gas used in the manufacture of exempted Sulphuric Acid.

Judgment Details:
The Tribunal referred to the Supreme Court's decision in Union of India Vs. Hindustan Zinc Ltd, which established that Sulphuric Acid is a by-product and not a final product. The Tribunal noted that the oxygen produced is captively consumed in the manufacture of Copper Cathodes and not in the manufacture of Sulphuric Acid. It was clarified that during the conversion of SO2 to SO3, the additional oxygen required is sourced from the atmosphere, not from the oxygen plant.

The Tribunal emphasized that the oxygen used in the purification of copper concentrate is eligible for exemption under Notification No. 67/95. The Tribunal also highlighted that the appellant complied with the Environment (Protection) Rules, 1986, which mandate the conversion of Sulphur Dioxide into Sulphuric Acid to prevent environmental pollution.

Conclusion:
The Tribunal concluded that the facts of the case are similar to those decided by the Supreme Court in Hindustan Zinc Ltd. The impugned Orders-In-Original were set aside, and the appeals were allowed. The duty demand on the quantity of oxygen used in the manufacture of Sulphuric Acid was set aside, and no penalty was imposed. The Tribunal held that the appellant is eligible for the benefit of Notification No. 67/95-CE.