Same Assessee; Same Product; two Commissionerates; Exempted in one, dutiable in other

By Vijay Kumar

AN assessee in Tuticorin of Tamilnadu has been exporting Anode Slime on payment of duty and claiming rebate. The Commissioner objects to it on the ground that the product is exempted under Sl No 195 of the Notification No 12/2012 CE. The rebate involved is Rs 166.83 crores. The assessee has another unit at Silvassa in Dadra & Nagar Haveli and the Commissioner wanted the assessee to clear the same goods only on payment of duty. Poor assessee had no other option but to represent to the Board. As there was no response for nearly three years, they filed a Writ Petition before the Madras High Court seeking directions to Board to issue clarification. The High Court directed the CBEC to clarify the issue in two months and finally the CBEC issued a clarification on the issue, but the same was not made public. DDT tried to obtain it under RTI, but was successful only at first appellate stage.

The Board explains it as:

A representation dated 25.07.2012 was received in the Board from the Chief Commissioner of Central Excise, Coimbatore Zone regarding classification of 'anode slime' and its unconditional exemption under serial no. 195 of Notification No. 12/2012-CE dated 17.03.2012. A representation dated 26.07.2012 on the same subject was also received in the Board from M/s Sterlite Industries India Limited. It was submitted that M/s Sterlite Industries India Limited had copper processing plants at Silvassa (Dadra & Nagar Haveli) and at Tuticorin (Tamil Nadu). During the refining of 'Copper Anodes' to highly pure 'Copper Cathodes' by the electrolytic process, Anode Slime emerges as a residual by-product. The Anode Slime arising at Silvassa refinery was being cleared on payment of central excise duty to the Tuticorin unit. Thereafter, from Anode Slime, selenium was extracted at Tuticorin unit and the desalinized Anode Slime was exported against cash rebate claim of central excise duty. The Chief Commissioner of Central Excise, Coimbatore Zone having jurisdiction over Tuticorin unit had taken a view that Anode Slime was exempted under serial no. 195 of Notification No. 12/2012-CE dated 17.03.2012 and on export of such exempted Anode Slime, rebate was not admissible under Rule 18 of Central Excise Rules, 2002. However, Central Excise at Silvassa unit had taken a view that Anode Slime is not covered under the said exemption. Hence, due to the divergent views of the jurisdictional Central Excise authorities at the two plants on the exemption to 'anode slime' under serial no. 195 of Notification No. 12/2002-CE dated 17.03.2012, Board was requested to intervene and issue a clarification.

As mentioned above, Board did not respond for three years and finally gave a clarification only on the directions of the High Court.

The Board on 14.07.2015 clarified that:

(a) Anode slime, a byproduct of copper refining industry is not entitled to exemption under S. No. 195 of the Notification No. 12/2012-C.E. dated 17.03.2012.

(b) The issue under consideration is a mixed question of law and fact and has been considered and decided by the Commissioner, who is the adjudicating authority under Section 33 of Central Excise Act, 1944. As per Section 35B of Central Excise Act, 1944, against the adjudication Order, a statutory remedy of filing the Appeal is available to the party before the CESTAT. Further, against the Order passed by the Tribunal, an appellate remedy is available before the Division bench of the High Court on questions of Law. The present order does not substitute the due process prescribed in the Act. The view expressed on merits are in compliance of the Orders dated 15.04.2015 of the Hon'ble High Court. The adjudicating and appellate authorities may pass suitable orders in accordance with law.

The Board, for some sound reason, did not make this clarification public. DDT tried to get a copy through an RTI application. The Board gave a part of the Board order and on appeal, on the directions of the appellate authority, they gave us the full order.

CBEC Order No. F.No. 71/4/2012-CX.1 Dated: 14.07.2015