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Informist, Monday, May 25, 2026

 

NEW DELHI – The Supreme Court Monday issued a notice to the customs department on a plea by Vedanta Ltd., seeking refund of the customs duty paid on import of copper concentrate. The apex court directed the customs department to not recover any amount from Vedanta till it hears the case. The apex court will hear Vedanta's plea next on Jul. 13.

 

Vedanta had three distinct units namely the domestic tariff area unit at Tuticorin, an export-oriented unit, and one unit at Silvassa, each separately registered under the Central Excise law. According to the customs department, the refund claim pertained only to the domestic tariff area unit, which manufactured copper anode and certain by-products such as sulphuric acid, phosphoric acid, hydrofluoro silicic acid, phospho gypsum and copper slag. 

 

These products are either transferred to sister units for further manufacture or sold locally, said the customs department. The copper anode is transferred to the sister units and invoices for captive consumption, and its valuation is done under the Central Excise Valuation Rules, 2000, said the department. In such circumstances, reliance on London Metal Exchange rates for final product prices of copper fixed by Mineral and Metal Trading Corp., which apply only to the final products of the sister units, is wholly irrelevant to the domestic tariff area unit's transactions, it said.

 

The Madras High Court ruled that the refund claims by Vedanta arose only from imports by the domestic tariff area unit, which is a smelting unit. It produces copper anode as its main product and by-products like sulphuric acid, phosphoric acid, hydrofluorosilicic acid, phospho-gypsum, and copper slag, said the high court. Transfers of copper anode from domestic tariff area unit unit to sister units are captive clearances, not market sales, and under Rule 8 of the Central Excise Valuation Rules, 2000, their value must be 110% of the cost of production, not market prices, said the high court. 

 

The high court said that Vedanta had not provided clear unit-specific evidence showing that the customs duty paid by the domestic tariff area unit on imported copper concentrate was not included in the cost of copper anode transferred to sister units, or the pricing of by-products sold in the domestic market. Hence, the high court did not allow the refund claims of Vedanta, against which the company moved the apex court.

 

At 1310 IST, shares of Vedanta were up 1.0% at INR 333.25 on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

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