Tribunal grants exemption for oxygen use in copper purification, rejects duty demand for Sulphuric Acid.

The Tribunal held that the appellant is eligible for the benefit of Notification No. 67/95-CE as the oxygen used in the purification of copper concentrate qualifies for exemption. The duty demand on the oxygen used in the manufacture of Sulphuric Acid was set aside, and no penalty was imposed. The impugned Orders-In-Original were overturned, and the appeals were granted in favor of the appellant, aligning with the Supreme Court's decision in a similar case involving Hindustan Zinc Ltd.

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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.

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