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TMI Blog2001 (6) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... basic issue relates to classification of the product described by the appellant as rich copper concentrate manufactured at their factory at Malanjkhand, Madhya Pradesh, out of copper ore obtained from the mines. According to the assessee the product falls for classification under Chapter Heading 26.03, while the Commissioner has upheld the classification under Chapter Heading 7401.20 of the Schedule to the Central Excise Tariff Act, 1985 holding that the product is cement copper (precipitated copper). Another issue is the applicability of the extended period of limitation. Eligibility of the goods to the benefit of exemption in terms of Notification 217/86 also arises for our consideration. 3. In appeal Nos. E/2735-2736, the assessees have filed Miscellaneous Application (E/Misc. 107/2001) for raising additional ground relating to the admissibility of Notification 217/86. On hearing both sides and noting that the plea regarding availability of this benefit was raised in the reply to the show cause notice and further noting that it is a legal plea, we permit the applicants to raise the additional ground. The miscellaneous application is thus, allowed. 4. We have heard Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Chapter Heading 74.01. The basis for the finding that the goods fall under Heading 74.01 is that the admitted process of manufacture shows that it is obtained by precipitation, i.e., by adding iron to the aqueous solution resulting from the leaching of ores or residue. The Department has relied upon HSN Explanatory Notes to Heading 74.01 at page 1043 which states that : Copper Cement (precipitated copper) is a product obtained by precipitation (cementation) i.e. by adding iron to the aqueous solution resulting from the leaching of certain roasted ore or residue... Further basis for the classification is that appellant themselves described the product as Cement Copper, as seen from the notes of discussion held on 18-5-1995 with the Representatives of the purchaser for sale of cement copper. 7. The submission of the appellants that the goods in dispute are minerals of mineralogical species actually used in the metallurgical industry for extraction of metals of Section XV (Copper) is not rebutted by the Revenue. It is also not the case of the Revenue that the minerals have been submitted to the processes not normal to the metallurgical industry. The HSN Explanatory Note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leached waste - process of manufacture of the product in dispute clearly shows that Oxide Ore is leached (treated with diluted sulphuric acid) and leaching of unroasted ore results in sulphate of metal. Learned SDR had also referred to extracts from the book Metallurgy and Plastics for Engineers by Merle C. Nutt, at pages 16, 17 and 18 dealing with various methods of extraction of metal ores such as Concentration methods, Pyrometallurgical Processes and Hydrometallurgical to support the argument that the process adopted by the appellant results in production of cement copper. We find that the process of manufacture adopted by the assessee is not of the three methods mentioned above. The Department has not been able to establish with reference to any technical literature that leaching of unroasted ores will also result in production of cement copper. There is one more reason why the goods in dispute do not fall for classification under Chapter 74 and, that is, that Chapter 74 does not cover raw materials from which copper is made - it covers base metals and products thereof; cement copper is a product sometimes used in anti-fouling paints and agricultural fungicides. The product i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the sulphuric acid would be used for producing Rich Copper Concentrate. 9-1-1992 21-4-1994 Illustrate copies of CT-2 certificates for the procurement of duty free inputs. 1-6-1995 Letter to the Supdt. for making suitable amendment to the Registration Certificate dated 30-6-1992 - for the purpose of selling Cement Copper . The process of manufacture of rich copper concentrate (cement copper) was also submitted along with this letter as Annexure - A. The appellants applied for registration as manufacturer since they wanted to dispose of the Rich Copper Concentrate through tender. Earlier, the appellants were clearing the rich copper concentrates to their other units for extraction of metal. 9-6-1995 Application in Form D-2 submitted to the Department. 9-6-1995 Application for registration with the Department as a manufacturer of Cement Copper . 17-7-1995 Letter from Supdt. directing the appellants to furnish the details pertaining to production and clearance of cement copper for the last four years. 22-7-1995 Details as requested by the Supdt. furnished by the appellants. 17-8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow cause notices and also imposing equivalent amount of duty demanded, as penalty under Section 11AC. 3-9-1998 Corrigendum to the impugned order dated 2-7-1998. The above correspondence clearly shows that the central excise authorities were fully aware of the manufacture of rich copper concentrate by the appellant, and the Superintendent after being satisfied that rich copper concentrate cannot be classified as cement copper accepted surrender of registration by the appellants. The allegation and finding of intention to evade payment of duty on the disputed product is also not sustainable since the benefit of Modvat credit would have been available to the assessee s units at Khetri and Ghatsila if the appellants had paid excise duty in Malanjkhand by treating the product as cement copper . In this connection decision of the Larger Bench of the Tribunal in the case of Jay Yushin Ltd. - 2000(119) E.L.T. (Tribunal-LB) = 2000 (39) RLT 501 becomes very relevant. In Para 13 of that order it has been held that with particular reference to the Modvat scheme it has to be shown that the revenue neutral situation comes about in relation to the credit available to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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