It is a lot more subtle than that. For example; you wouldn't generally refer to a woman as a c***. Even if she was your best mate. But saying "I'm gonna f*** your c*** all night" is okay.
It's okay to say to a bloke that you are friendly with "It's your round, you tight arrsed c***".
The general rule of thumb is that you use it with blokes that you are friendly with, and only in informal circumstances.