2024-VIL-312-CESTAT-BLR-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Manufacture of gold bars by processing gold ore extracted from the adjacent underground mines belonging to the appellant - Admissibility of exemption under Sl. No.21 of the Notification No.5/2006-CE dated 1.3.2006 on the manufacture of ‘Gold Dore Bars’ (Notification No.5/2006-CE dated 1.3.2006 allows exemption to “Primary Gold converted with aid of power from any form of gold”) – Demand of duty on the manufacture of ‘gold dore bars’ along with interest and penalty – HELD – the starting point in the present case is gold ore, which has been subjected to both physical and chemical processes to obtain gold concentrate, which is later subjected to further process by which gold powder is obtained. The said gold powder taken to the melting refinery section and mixing the concentrate with other chemicals and heating up to 1200 centigrade, impurities are separated and gold is obtained in the form of buttons after cooling. The buttons obtained from both the processes are melted together to eliminate further impurities and homogenous gold dore bars are manufactured having gold content of 90-92% purity - the observation of the Commissioner that to allow exemption to primary gold in the form of dore bar, there should be gold in existence in the form of ornaments, jewellery etc., is contrary to the judgment of the Hon’ble Supreme Court in Hindalco Industries case holding that the parentage of the primary gold need not to be looked into but the product which emerges before the final process is completed i.e., gold powder/concentrate generated during the course of manufacture of ‘gold dore bars’ be the decisive factor. The objective is to consider exemption of final products, i.e., primary gold in the form of dore bars resulted from conversion of any form of gold, which in the present case is the gold powder/concentrate. Consequently, the Appellant are eligible to the benefit of the Sl. No. 21 of the exemption Notification No. 05/2006-CE dt.01.3.2006 till it has been amended by Notification 25/2011CE dt.24.3.2011 - Since the appellants succeeds on merit, the other issues of limitation and imposition of penalty becomes academic, hence not dealt with - the impugned order is set aside and the appeals are allowed
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