Custom, Excise & Service Tax Tribunal
Vedanta Ltd vs Madurai on 17 December, 2025
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
CHENNAI
REGIONAL BENCH - COURT NO. III
Excise Appeal No.40153 of 2017
(Arising out of Order-in-Appeal No.TNL-ST-000-APP-96-2016 dated
19.08.2016 passed by Commissioner of Central Excise (Appeals-I),
Madurai)
M/s. Vedanta Ltd., ....Appellant
Sipcot Industrial Complex,
Madurai Byepass Road,
Tuticorin.
Versus
Commissioner of GST & Central Excise ... Respondent
Central Revenue Building,
No.4, Lal Bahadur Shastri Road,
Bibikulam,
Madurai-625 002.
APPEARANCE:
Shri Vishal Agrawal, Advocate for the Appellant
Shri Sanjay kakkar, Authorized Representative for the Respondent
CORAM:
HON'BLE MR. P. DINESHA, MEMBER (JUDICIAL)
HON'BLE MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL)
FINAL ORDER No.41496/2025
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DATE OF HEARING: 21.08.2025
DATE OF DECISION: 17.12.2025
Per: Shri P. Dinesha
The present appeal is filed by
M/s. Vedanta Ltd., aggrieved by the Order-in-Appeal
No.96/2016 dated 19.08.2016 passed by Commissioner
of Central Excise (Appeals-I), Madurai.
2. Brief facts of the case are that the Appellants are
engaged in the manufacture of Copper Anodes and
cathodes falling under Chapter 74 of the CETA, 1985 by
subjecting the Copper concentrate to one smelting
process. During the smelting process, Sulphur di-oxide
gas emerges which is further converted into Sulphuric
acid, an excisable product falling under chapter 28.07
of CETA. This Sulphuric acid is partly cleared to
fertilizer units without payment of Duty by availing
exemption under Notification No.04/2006-CE dated
01.03.2006 and w.e.f. 17.03.2012 under Notification
No. 12/2012-CE. The remaining Sulphuric acid is used
to manufacture Phosphoric Acid. Since, same input
services were being used for the manufacture of both
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copper anode/cathode the excisable final product and
sulphuric acid the excisable product cleared without
payment of duty, the appellant were liable to maintain
separate accounts for dutiable final product and the
exempted product as per Rule 6 of Cenvat Credit Rules,
2004(CCR). It is admitted that they did not maintain
separate accounts for the manufacture of copper
anode/cathode and sulphuric acid, they were liable to
pay an amount equivalent to 6%/5% of the value of
exempted goods as per Rule 6(3) of CCR. Hence, the
Appellants were reversing credit equivalent to 6%/5%
of the value of sulphuric acid from April, 2011. From
April, 2011 to March, 2014 they had reversed a total
amount of Rs.94,94,363/- from their Cenvat Credit
account.
3. The Hon'ble Supreme Court in the case of Union
of India & others Vs. M/s.Hindustan Zinc Ltd.,
2014-TIOL-55-SC-CX/2014 (303) ELT 321 (SC), had
held that "Sulphuric acid was only a by-product-
Conversion of sulphur dioxide to sulphuric acid could
not elevate sulphuric acid to status of final product - It
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was more so as technologically, commercially and in
common parlance, sulphuric acid was treated as a by-
product in extraction of non-ferrous metals by
companies not only in India but all over the world....
Application of Rule 57CC ibid when Rule 57D ibid does
not talk about its application when by-product emerged
as technological necessity, would equate by-product
and final product thereby obliterating difference though
recognized by legislation itself. There was no necessity
and actually it was impossible to maintain separate
records for zinc concentrate used in production of
sulphuric acid -Requirements of Rule 57CC of erstwhile
Central Excise Rules, 1944 were fully met and recovery
there under of 8% sale price of exempted sulphuic acid
to fertilized plants was unsustainable...."
4. Supreme Court in the case of Hindustan Zinc
Ltd. [supra], held that sulfuric acid generated as a
byproduct in the manufacture of zinc or similar products
is not in the nature of a final product and thus, the
assesse was not required to follow the procedure
prescribed under Rule 57CC of the Central Excise Rules,
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1944 (Rule 6 of Cenvat Credit Rules, 2004); and as
such, was not required to pay the requisite amount,
i.e., 5% or 6%, of the value of exempted sulfuric acid,
cleared by it. The Appellant accordingly filed an
application dated 28.05.2014 seeking refund of the
amount of Rs.94,94,363/- which was paid by it under
mistaken belief of law during the period of dispute i.e.,
April, 2011 to March, 2014. The said claim was received
by the Department on 05.06.2014.
5. The Revenue appears to have issued a Show
Cause Notice dated 29.11.2014 to the Appellant
proposing to reject the Appellant's refund claim
primarily on the ground that the same was barred by
limitation prescribed under Section 11B of the Central
Excise Act, 1944 and after due process, vide Order-in-
Original No.39/2015 (ST) dated 06.07.2015 the said
refund claim came to be rejected. Aggrieved by the
denial of refund, the Appellant appears to have filed an
Appeal before the Commissioner (Appeals) and the First
Appellate Authority after hearing the Appellant, partly
allowed the refund claim thereby modifying the Order-
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in-Original. The Appellant has filed the present Appeal
against the partial rejection but the Revenue has
accepted the partial refund granted by the First
Appellate Authority.
6. Heard Shri Vishal Agrawal, Ld. Advocate for the
Appellant and Shri Sanjay Kakkar, Ld. Deputy
Commissioner for the Respondent; perused the Appeal-
record and the judicial pronouncements relied upon by
both the sides during the course of hearing.
7. After hearing both the sides, the only issue that
crops up for our consideration is, "whether the refund
claim to the extent it is subject-matter of this Appeal, is
hit by time bar as held by the authorities below?"
8. Thrust of the contentions of Shri Vishal
Agrawal, Ld. Advocate is that the refund claim was not
a „Central Excise duty‟ but was relating to the exempted
goods as per Rule 6(3)(i) of CCR, 2004 for which,
limitation prescribed under Section 11B could not apply.
He would also submit that the ratio of Mafatlal
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Industries Ltd. Vs UOI - 1997 (89) ELT 247 (SC) was
therefore not applicable as the refund claim here, in the
case on hand was not refund of „duty‟. He would rely
on the following decisions/orders, in support of his
contentions:-
3E Infotech Vs. CESTAT, Chennai 2018
(18) G.S.T.L. 410 (Mad.)
S. Sakthikumar Vs. Commissioner of
GST & Central Excise, Madurai, 2022 (61)
G.S.T.L. 364 (Tri.-Chennai)
Commissioner of Customs and Central
Excise, Hyderabad GST Commissionerate
Vs. Credible Engineering Construction
Projects Ltd., MANU/TL/0625/2024
Commissioner of Central Excise and
Service Tax Vs. Oriental Insurance
Company Ltd., MANU/DE/6586/2023
M/s. Natraj and Venkat Assocaites Vs.
Assistant Commissioner, Service Tax, 2010
(249) E.L.T. 337 (Mad.)
9. Per contra, Shri Sanjay Kakkar, Ld. Deputy
Commissioner supported the findings of the First
Appellate Authority. He also relied heavily on the
decision of Hon‟ble Apex Court in Mafatlal Industries
Ltd. (supra) by inviting our attention to paragraph 82 of
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the said judgment wherein, the Apex Court has held
that all claims for refund shall be filed, considered and
disposed of in accordance with the provisions relating to
refund. Further, he would also draw our attention to
para 70 of Mafatlal (supra) wherein, the Hon‟ble Apex
Court has clearly laid down that the theory of mistake
of law and the consequent period of limitation would not
be invoked by an Assessee taking advantage of the
decision in another Assessee‟s case; an Assessee must
succeed or fail in his own proceedings. In this context
he would further place reliance on Orders of Chennai
Bench in i) ZF Commercial Vehicles Control System
India Ltd. ii) M/s. India Yamaha Motor Pvt. Ltd.,
apart from relying on one another decision of the Apex
Court in VKC Footsteps India Pvt. Ltd. In the light of
the above, he would submit that the denial of refund
being time-barred, as confirmed in the impugned order,
may kindly be upheld.
10. We have considered the rival contentions at
length; there is no dispute insofar as the facts are
concerned. The Appellant clearly admits that the period
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of dispute is from April 2011 to March 2014 for which
the application for refund was filed on 05.06.2014 (date
of the application doesn‟t matter). The Commissioner
(Appeals) has, after a detailed analysis granted partial
refund for the period which was not hit by limitation,
which order stands accepted by the Department and,
hence, insofar as the earlier periods of dispute are
concerned, they are apparently barred by limitation.
11. We find that but for the decision of Apex Court in
Hindustan Zinc Ltd. (supra), the Appellant would not
have even conceived of filing any refund claim and
clearly, it is only the decision of Supreme Court (Supra)
that triggered the filing of refund claims in question, by
the Appellant. This is precisely what the Hon‟ble Apex
Court in Mafatlal - at para 70 has held, the relevant
observation reads as under:-
"70.......
-
-
Every decision of this Court and of the High Courts on a question of law in favour of the assessee is giving rise to a wave of refund claims all over the country in respect of matters which have become final and are closed long number of years ago. We are not shown that such a thing is happening anywhere else in the world. Article 265 10 surely could not have been meant to provide for this. We are, therefore, of the clear and considered opinion that the theory of mistake of law and the consequent period of limitation of three years from the date of discovery of such mistake of law cannot be invoked by an assessee taking advantage of the decision in another assessee's case. All claims for refund ought to be, and ought to have been, filed only under and in accordance with Rule 11/Section 118 and under no other provision and in no other forum."
12. Further, we also note that in Mafatlal‟s case (supra) it has been declared by the Apex Court that any action taken to refund an amount collected as tax, under and in accordance with the provisions of Section 11B would be an action taken under the „authority of law‟ and hence, any and every claim for refund of excise duty would only be made under and in accordance with Rule 11 or Section 11B, as the case may be. This ratio, in fact, takes care of the arguments of the Appellant that what was claim by it was not the refund of "Central Excise duty" under Rule 2(e) of the Central Excise Rules, 2002 read with Section 3 of Central Excise Act, 1944. This also became evident when the whole refund mechanism is provided under Section 11B alone.
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13. In view of the above discussion, we do not find any infirmity in the impugned order to the extent it is appealed against in this Appeal and, therefore, we reject the Appeal filed by the Appellant.
(Order pronounced in open court on 17.12.2025) sd/- sd/-
(VASA SESHAGIRI RAO) (P. DINESHA) Member (Technical) Member (Judicial) Vl