Classificatory amendment so as to provide that exemption from excise duty under Sl.No.193 and 194 of Notification no.5/98 is available to goods of precious metals such as catalysts, falling under chapter 71when re-made out of used or spent catalysts of such precious metals, etc. - Central Excise - 431/64/98

Circular No .431/64/98-CX dated 19/11/1998 Subject: Catalysts of precious metals falling under Chapter 71 - scope of exemption in notification No. 05/98-C.E. I am directed to state that representations have been received from the trade, retarding the scope of exemption available to previous, metals and articles of precious metals such as ingots, bars, crucibles, foils, dishes, wires, wire gauges etc., under SI. No. 193 or 194 of Notification No. 05/98-C.E. dated 2.6.98. lt has been represented that the benefit of exemption under SI. no. 193 or 194 of Notification No. 05/98-CE dated 2.6.98 is being denied on the ground that the above goods of precious metals when re-made, re-conditioned, re-fabricated etc., and used as catalysts, are subject to excise duty at the rate of 18% of the value of materials, if any added and the amount charged for such manufacture under SI. No. 36 of the same notification. References have also been received from some field formations in this regard. 2. The matter has been examined. While articles of precious metals falling under Chapter 71 are subject to Nil rate of duty under SI. No. 193, the precious metals in unfinished and semi- finished forms are subject to Nil rate of excise-duty under SI. No. 194 of notification No. 05/98-C.E. dated 2.6.98. The above exemption is unconditional and is applicable to the said goods irrespective of whether they are manufactured first time or re-made, re-conditioned or refabricated. Accordingly, it will be incorrect to charge duty on such goods under SI. No. 36 of the same notification. 3. As per the HSN explanatory notes, catalyses in the form of wire cloth or grill, of platinum, iridium, osmium, palladium are covered under Chapter Heading 7101.90 of the central excise tariff, as ""Other articles of precious metals"". Only amalgams of precious metals and colloidal precious metals (Chapter 28) and supported catalysts (Chapter 38) are excluded from Chapter 71 as per the chapter notes. Hence catalysts and articles of precious metals falling under Chapter 71 are distiretly identified from the catalysts of Chapter 28 or 38. 4. Accordingly, it is clarified that the exemption from excise duty under SI. No. 193 and 194 of Notification No. 05/98-C.E. shall not be denied to goods of precious metals such as catalysts, ingots, powder and sponge falling under Chapter 71 when re-made out of used or spent catalysts of such precious metals, re-conditioned or re-fabricated or re-covered from old or used articles of precious metals or subjected to any other similar process. In order to remove any doubts in this regard the entry at SI. No. 36 of Notification No. U5/98-C.E. has also been amended suitably vide Notification No. 34/.98-C.E. dated 10.11.98. F.No. 332/82/98.TRU