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2018 (8) TMI 237 - AT - Central ExciseManufacture - Regeneration of platinum catalyst from spent platinum catalyst - Process of making colloidal platinum catalyst from pure platinum - processes amounting to manufacture - manufacturer - extended period of limitation - penalty u/r 209A of the Central Excise Rules, 1944. Whether in the facts and circumstances of the case excisable goods viz. colloidal platinum catalyst from platinum and also regenerated platinum catalyst from spent platinum catalyst amounts to manufacture? - Held that - The process involves only conversion of spent platinum catalyst into regenerated/activated platinum catalyst. As a catalyst, by its very nature, does not participate in the chemical reaction but only facilitates the same, the spent platinum catalyst will still remain what it was before being used as a catalyst, namely, a platinum catalyst. By implication, regeneration of spent platinum catalyst into reactivated platinum catalyst will not bring about a new product in existence with a different name, character or use - the process of conversion of spent platinum catalyst into regenerated platinum catalyst cannot be considered as a process resulting in emergence of a new product having a different name, character or use - demand set aside. Conversion of pure platinum to colloidal platinum catalyst - Held that - The appellants have converted metallic platinum into colloidal platinum for which there is a separate entry in Chapter Heading 28.4300 as colloidal precious metals of the Central Excise Tariff Act. It is but obvious that the metallic platinum by itself cannot be used for the purpose, as desired by MDPL, for which obviously only colloidal platinum will do the job as the catalyst of choice. The name, character and use of the raw material (metallic platinum) thus, changes by its emergence into colloidal platinum. In the event, the process is definitely one amounting to manufacture for the purpose of Section 2(f) of the Act - process amounts to manufacture - demand upheld. Whether M/s. MDPL, in whose premises the colloidal platinum catalyst and regenerated platinum catalyst are alleged to be manufactured are liable for any penalty under Rule 209A of the Central Excise Rules, 1944 - Held that - Penalties imposed on CIL and MDPL are set aside since the disputes revolve around interpretations on whether the processes concerned amount to manufacturing or otherwise. Appeal allowed in part.
Issues Involved:
1. Whether the processes of converting platinum into colloidal platinum catalyst and regenerating platinum catalyst from spent platinum catalyst amount to manufacture. 2. Identification of the manufacturer of the impugned goods, i.e., M/s. CIL or M/s. MDPL. 3. Applicability of the extended period under proviso to Section 11A of the Central Excise Act, 1944 for demanding duty. 4. Liability of M/s. MDPL for penalties under Rule 209A of the Central Excise Rules, 1944. Detailed Analysis: 1. Whether the processes amount to manufacture: Regeneration of Platinum Catalyst: The process involves converting spent platinum catalyst into regenerated/activated platinum catalyst. The Tribunal held that a catalyst, by its nature, does not participate in the chemical reaction but facilitates it. Therefore, the spent catalyst remains a platinum catalyst, and its regeneration does not create a new product with a different name, character, or use. This principle aligns with the definition of "manufacture" as interpreted by the Hon’ble Apex Court in several judgments, including Union of India Vs. Parle Products Pvt. Ltd. (1994), Cipla Ltd. Vs. Commissioner of Central Excise (2008), and others. Consequently, the demand of ?3,61,754.34 for regenerated catalyst was set aside. Conversion of Pure Platinum to Colloidal Platinum Catalyst: The Tribunal found that the conversion of metallic platinum into colloidal platinum catalyst results in a new product with a distinct name, character, and use. Colloidal platinum falls under a specific tariff entry (Chapter Heading 28.4300) distinct from metallic platinum. Thus, the process amounts to manufacture under Section 2(f) of the Act. The duty demand of ?11,53,302.39 with interest for this process was upheld. 2. Identification of the Manufacturer: The Tribunal did not explicitly address this issue in the final judgment, focusing instead on the nature of the processes and the resulting products. 3. Applicability of the Extended Period: The Tribunal did not explicitly address this issue in the final judgment, focusing instead on the nature of the processes and the resulting products. 4. Liability for Penalties: Penalties imposed on both CIL and MDPL were set aside. The Tribunal reasoned that the disputes revolved around interpretations of whether the processes amounted to manufacturing, which involved complex legal interpretations. Summary: (i) The demand of ?3,61,754.34 for regenerating the catalyst was set aside. (ii) The demand of ?11,53,302.39 with interest for converting platinum into colloidal platinum catalyst was upheld. (iii) Penalties imposed on M/s. Catazyme India Ltd. and M/s. Malladi Drugs & Pharmaceuticals Ltd. were set aside. Disposition: The appeals were disposed of in the above terms, with the judgment pronounced in open court on 31.07.2018.
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