2013 (12) TMI 673 - AT - Central Excise

Process amounts to manufacture or not u/s 2(f) of the Central Excise Act 1944 - Regeneration of platinum catalyst from spent catalyst and conversion of platinum into colloidal platinum Waiver of Pre-deposit Held that - It is evident from the orders that the applicant manufactured the goods and therefore duty liability is on them - the applicants have not made a prima facie case for waiver of entire amount of duty interest and penalties - the applicant has already deposited a sum of Rs.3, 78, 212.98 - the applicant is directed to deposit a further sum of Rupees three lakhs as pre-deposit upon such submission rest of the amount to be waived till the disposal Partial stay granted.

Summary

Issues:
1. Whether the regeneration of platinum catalyst and conversion into colloidal platinum amounts to manufacture under Section 2(f) of the Central Excise Act, 1944.
2. Liability of duty payment - whether on the applicant or the principal manufacturer.
3. Eligibility for Notification No. 230/80-CE dated 6.7.1988.
4. Prima facie case for waiver of duty, interest, and penalties.

Analysis:

Issue 1: Regeneration of Platinum Catalyst
The main issue in this case revolves around whether the process of regenerating platinum catalyst from spent catalyst and converting it into colloidal platinum constitutes "manufacture" under Section 2(f) of the Central Excise Act, 1944. The appellant argued that the process undertaken does not amount to manufacture, citing a Tribunal decision and a High Court decision in support. However, the adjudication order concluded that the regenerated platinum catalyst is a new product with different physical and chemical properties, indicating a transformation significant enough to qualify as manufacture. The Tribunal distinguished previous decisions cited by the appellant, emphasizing the uniqueness of the current scenario under Central Excise law.

Issue 2: Duty Liability
The question of duty liability arises concerning whether the duty should be paid by the applicant or the principal manufacturer. The appellant contended that duty should be borne by the principal manufacturer, but the Tribunal disagreed, stating that the duty liability rests with the applicant as they were the ones involved in manufacturing the goods. Consequently, the Tribunal found no grounds for waiving the duty, interest, and penalties in full. The appellant was directed to deposit a specific sum within a stipulated timeframe, with the remaining amount being waived subject to compliance.

Issue 3: Notification No. 230/80-CE
The appellant claimed eligibility for the benefits under Notification No. 230/80-CE dated 6.7.1988. However, the judgment did not delve into this aspect in detail, focusing primarily on the determination of duty liability and the manufacturing process's classification.

Issue 4: Prima Facie Case for Waiver
Regarding the prima facie case for waiving duty, interest, and penalties, the Tribunal found that the appellant had not established sufficient grounds to warrant a complete waiver. Despite a partial deposit made by the appellant, the Tribunal directed further payment within a specified period, with the remaining amount being stayed pending appeal disposal.

In conclusion, the judgment addressed crucial issues related to the manufacturing process, duty liability, and waiver considerations, providing a detailed analysis to resolve the legal complexities surrounding the case.