ORDER
Gowri Shankar, Member (T)
1. The application is for waiver of deposit of duty of Rs. 45.98 crores remaining unpaid out of the total demand of Rs. 109.37 crores and penalty equal to the duty.
2. The applicant is engaged in the refining of copper. The starting part of the production is copper concentrate which is converted into the various forms of copper, ultimately cathodes (purity of 99.99%) or continuous cast rods made from cathodes. The copper concentrate contains process of gold, silver and other metals. These metals are contained in the anode slime which settles in the electrolytic tank after the cathode comes into existence. After selenium is extracted from slime, it is dried and melted in a furnace during which impurities are removed. The resulting material is poured into a mould and is known as “Dore anode” and consists of a mixture of gold silver and traces of palladium. From this substance, first silver and gold and final palladium are isolated by means of chemical process. The gold which emerges in the form of powder is melted and cast into bars of 1 kg. weight. It is stated that the gold powder and the gold bar are of purity 999.0. It is the gold bars that the applicant clears.
3. While clearing the gold bar the applicant did not pay any duty on it. The applicant also did not deposit 8% of the sale price of the gold bar. The applicant was availing credit of the duty paid on copper concentrate and other materials used in the manufacture of the copper and the other goods. Various notices were therefore issued starting from 1-6-2001 demanding duty on the gold bar on the ground that the exemption contained in Entry 184 of Notification No. 6/2000 because the gold was not obtained by conversion from any other form of gold but out of anode slime. After receipt of the notice, the applicant deposited 8% of the sale price of the gold bars which it did not pay. In reply to the notice, it claimed that the benefit of Entry 184 of Notification No. 6/2000 would be available because the gold bars have been manufactured out of the gold powder. It also claimed the benefit of the exemption which would also be available to gold powder, since it was manufactured out of the Dore anode, which since it contained more than 12% by weight of gold must be considered to be gold for the purpose of Chapter 71 and the notification by virtue of Notes 4 and 5 of Chapter 71, the Commissioner did not accept this contention. He was of the view that neither the gold bar nor the gold powder would be considered to have made out of any kind of primary gold. The starting point of the manufacture of the metal was anode slime which was not gold. He relied upon the decision of the Tribunal in CCE v. Triveni Conductors P. Ltd. – 2001 (130) E.L.T. 363 and confirmed the duty and imposed penalty.
4. Counsel for the applicant reiterates before us the claim for the benefit of the exemption contained in Notification No. 6/2000. He contends that since it would not be incorrect to say that the gold powder and slime have been manufactured out of the anode slime. However, it does not mean that it cannot be so that the gold slab had not been manufactured out of the gold powder and the gold powder had not been manufactured out of Dora anode, both of which are forms of gold. He contends alternatively that the benefit of exemption contained in Notification No. 67/95 will be available. The notification exempts inter alia captively consumed goods and restriction contained in the proviso will not apply because the applicant had discharged the obligation in Rule 6 of Cenvat Credit Rules. This exemption will apply to the clearance made from 1-6-2001 until February, 2003 and therefore covers the majority of the clearance made during the period specified in the notice, May, 2000 and February, 2003.
5. The departmental representative reiterates what the Commissioner says, that the starting point of the gold being anode slime the benefit of the exemption contained in Entry 184 of the table to the Notification No. 6/2000 would not be available. As to the other point, he points out that the notification requires that goods must have been cleared by a manufacturer of dutiable and exempted final product after discharging the application prescribed in the Rule 6 of the Cenvat Credit Rules which has not been done, in any way, notification will not be available to clearance made prior to 1-6-2001.
6. The issues are arguable particularly the claim for the exemption contained in Notification No. 67/95. The Clause 6 under the proviso specifically provides prima facie that the goods should have been cleared after payment of the amount in Rule 6 of the Cenvat Credit Rules. Whether payment made subsequent to the physical clearance of the goods would be considered to relate back to this clearance would have to be gone into detail. Whether Rule 6 would at all apply in a situation where, the manufacturer clears only the exempted product (as in this case) not dutiable and exempted product would also have to be examined. On the face of it, we find it difficult to say the exemption contained in Entry 184 of Notification No. 6/2000 will not apply to the gold bar. The duty has been demanded on the gold bar and it was manufactured by melting down and casting the gold powder. The fact that the original starting point of manufacture may have been the anode slime does not prima facie lead to the conclusion that the gold bar has not been made out of the gold powder. To take a simple example, it would be difficult to say a cotton garment has not been made out of cotton fabric and has been made out of the cotton growing in the fields. The liability to penalty is also open to question. It is not alleged that the applicant concealed that the process was manufacture from the department and the Commissioner’s order seems to suggest the contrary.
7. Taking into account that 60% of the duty has been paid, we waive deposit of the remaining duty and penalty. Having regard to the amount of duty involved and the repetitive nature of the issue, we accept the prayer made by the Counsel for the applicant for out of turn hearing and list the appeal for hearing on 3-9-2003.