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TMI Blog2023 (5) TMI 1133X X X X Extracts X X X X X X X X Extracts X X X X ..... otification No. 228/88 was rescinded. Also, vide Notification No. 39/1994-CE dated 01.03.1994, unconditional and complete exemption was granted to article of precious metals irrespective of their form. However, Notification 230/1988 continued to be in force. In the budget 1995-96 Notification No. 54/95-CE dated 16.3.1995, effectively continued Notification No.30/94 dated 1.3.1994, Explanation (iv) was however added to the existing notification, clarifying the meaning of articles in relation to precious metals - Notification No.54/95-C.E dated 16.3.1995 and Notification No.230/88-CE dated 6.7.1988 continued in the subsequent years also albeit with new numbers. Sl.No.72.2 of Notification 8/96 inter alia exempted articles of platinum. Sl.No.71.3 of Notification, inter alia, exempted platinum in their primary of forms that is to say to any unfinished or semi-finished including ingots etc. Sl.No.28.14 of notification granted partial exemption, inter alia to catalysts, ingot, powder and sponge inter alia, of platinum. From 1994 onwards the notification has been issued exempting the impugned goods and the wording used in the notification then till the notification under consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legations adduced in the Show Cause Notice and the replies submitted by the noticee and have also heard the noticee's representative in person. I find that the main issue to be decided here is the eligibility of exemption from payment of CVD under Notification No 05/2006 -Central Excise dated 01.03.2006 (Sr. No. 25) and Notification No. 12/2012 -Central Excise dated 17.03.2012 (Sr. No. 193), for goods declared as Platinum Sponge by the noticee. 5.1 ELIGIBILITY OF EXEMPTION FROM PAYMENT OF CVD: The main issue to be examined here is as to whether the noticee is entitled for the exemption from payment of Countervailing Duty (CVD) on the impugned goods. imported by them by declaring them as 'Platinum Sponge, and classifying them. under Heading 7110 11 10/7110 1120. In order to come to any conclusion let us examine the allegations adduced in the SCN and the reply submitted by the noticee in the light of various legal provisions and related case laws on the issue. 5.1.1 It is alleged in the Show Cause Notice that the noticee M/s Johnson Matthey India Pvt. Ltd. imported Platinum powder falling under Chapter 71 of the First Schedule to the Central Excise Tariff Act, 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ispute raised was only whether eight digit Tariff Item 7110 11 10 unwrought form or 7110 11 20 powder form covers the platinum sponge in question. Noticee argued that for the purpose of coverage under Serial No.25 that the imported precious metal should be in their primary forms . It was clarified in the notification itself that that is to say any unfinished or semifinished form including ingots, bars, blocks, slabs, billets, shots, pellets, rods, sheets, foils and wires . Noticee submitted that evidently primary form of a precious metal would certainly cover the form in which the metal first emerges during its process of manufacture. The platinum sponge in question was produced by secondary refining process of smelting, chemical leaching, chemical separation by our overseas suppliers. In this process, in the penultimate stage, ammonium chloroplatinate salt was obtained as a precipitate. This was subjected to calcination due to which ammonium chloride gets reduced off and what remains was platinum sponge. Thus, the first form in which the pure metal emerges was in the form of sponge imported by the Noticee. Hence, platinum sponge in question was indeed a primary form of platinum. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods are produced and what are their properties. As explained at Volume 19 of Kirk- Othmer's Encyclopaedia of Chemical Technology, Fourth Edition recovery and refining of platinum starts with concentration of the ore to obtain PGM concentrate. Then PGM Concentrate is attacked with aqua regia to dissolve gold, platinum and palladium whereas more soluble metals iridium, rhodium, ruthenium and osmium remain as a residue. The solution is then treated with ammonium chloride to produce precipitate of ammonium hexachloroplatinate (NH4)2 PtCl6. Calcination of the precipitate produces platinum sponge. Even in case of refining from secondary materials containing PGM ammonium chloroplatinate is obtained in the penultimate stage and thereafter, platinum sponge is produced as usual. Thus, platinum sponge is the first pure form of the metal, whether one started from primary ore/ concentrate or secondary sources of platinum. 5.1.5 Further, as per the affidavits of Dr. Michael David Turner Jones and Mr. Jay Hasmukh Dave, employees of JMPIC, refining process undertaken by JMPIC was from recycled/ recovered materials like spent catalysts, and other waste and scrap containing platinum/ plat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto iridium. The platinum sponge is then sintered or melted in a refractory furnace to obtain solid platinum. 5.1.7 Thus, from the above discussions it is clear that 'sponge' is the first form of metal obtained in chemical refining process. If platinum metal in solid form is required, platinum sponge can be melted and cast into desired shape such as ingots, bars, blocks, slabs, billets etc. 5.1.8 As there is no allegation in the SCN that the goods imported by the noticee M/s Johnson Matthey India Pvt. Ltd. is not 'platinum sponge' and the only allegation is that platinum sponge imported by JMIPL is in powder form which wrought form different and distinct from unwrought form the same should be classified under Central Excise Tariff Heading 7110 11 20. As per the SCN the goods imported by JMIPL was Platinum in powder form which is not primary form of platinum and hence the exemption under the said notifications is not available to them. As per sub-heading Notes of Chapter 71, for the purpose of heading 7110, 'the expressions powder and in powder form mean products of which 90% or more by weight passes through a sieve having a mesh aperture of 0.5 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng any condition and hence classification is immaterial so long as it falls within Chapter 71 and the description of goods given in the notification is satisfied 5.1.9 Now to ascertain as to whether platinum sponge imported by the noticee is entitled to the exemption Notification No 05/2006 -C.E. dated 01.03.2006 (Sr. No. 25) and Notification No. 12/2012 -C.E. dated 17.03.2012 (Sr. No. 193) or not the requirement is that the imported material should be platinum in their primary forms, that is to say, any unfinished or semi-finished form including ingots, bars, blocks, slabs, billets, shots, pellets, rods, sheets, foils and wires . As discussed above in paras 5.1.4 to 5.1.6, platinum sponge is the form in which the platinum metal first emerges during the process of manufacture and hence it is one of the primary forms of platinum. This has further been clarified by Additional U.S. Notes to Chapter 71 of Harmonized Tariff Schedule of the United States (2012)- Supplement 1, wherein it is clearly stated that sponge is a primary form of metal. In the notification the prefix 'any' preceding the phrase unfinished or semi-finished form would mean all unfinished or s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g platinum sponge being unfinished or semi finished from of platinum metal or not and the impugned order needs to be set aside on this count itself. ● The platinum sponge imported in the instant case is in finished form and not unfinished or semi-finished form and hence the benefit of exemption claimed could not be admissible to the respondent. ● As per the market report published and available literature any platinum group of metals cannot be used to determine the finished or unfinished nature of the goods as it is frequently converted from one form to other form. ● The adjudicating authority has failed to substantiate with any facts that the first form of metal which comes into existence shall be treated as primary form. ● The reliance placed by the adjudicating authority on the Additional U.S. Note to Chapter 71 of Harmonized Tariff Schedule of the United States (2012)-Supplement 1 to hold that sponge is an unwrought form of metal. The said United States (2012)-Supplement 1 is not similar to that of the classification under Indian Customs Tariff after the six digit level. ● The law is well established that the notificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existing full exemptions from excise duty on a number of items would continue by means of a new notification. The present partial exemption to articles of precious metals re-made, reprocessed, etc. from old articles has been extended unconditionally to all articles of such precious metals without any conditions. (Notification No. 39/94-C.E.). In view of the above, Notification Nos. 228/88, 53/86, 313/86 and 137/89 have been rescinded. (Notification No. 64/94-C.E). NOTES EXPLAINING IMPORTANT CHANGES MADE IN EXCISE DUTY 31.1 Notification No. 39/94-CE is being rescinded (Notification No. 71/95-CE refers). However, the Nil rates for certain articles of precious metals, ornaments of gold or silver, strips, wires, etc. of silver and gold, imitation jewellery and precious and semi-precious stones, etc. are being continued (Notification No. 54/ 95-CB refers) 31.2 A doubt had arisen as to whether articles in relation to precious metals (other than gold) will include their unfinished or semi-finished form (including ingots, bars, blocks, slabs, billets, shots, pellets, rods, sheets, foils and wires). Board have vide letter no. 172/2/94-CX 4 dated the 5th July, 1994 cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification No 05/1998-CE dated 02.06.1998 read as follows: 194 71 Silver, platinum, palladium, rhodium, iridium, osmium and ruthenium in their primary forms, that is to say, any unfinished or semi-finished form including ingots, bars, blocks, slabs, billets, shots, pellets, rods, sheets, foils and wires Nil 4.4 CBEC had issued Circular No. 431/64/98-CX dated 19/11/1998 clarifying the scope of entries in Notification No 05/1998-CE. The text of the Circular is reproduced below: 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 preciou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Silver, platinum, palladium, rhodium, iridium, osmium and ruthenium in their primary forms, that is to say, any unfinished or semi-finished form including ingots, bars, blocks, slabs, billets, shots, pellets, rods, sheets, foils and wires 3/2001-CE dt 01.03.2001 189 6/2002-CE dt 01.03.2002 172 5/2006-CE dt 01.03.2006 25 12/2012-CE dt 17.03.2012 193 Platinum, palladium, rhodium, iridium, osmium and ruthenium in their primary forms, that is to say, any unfinished or semi-finished form including ingots, bars, blocks, slabs, billets, shots, pellets, rods, sheets, foils and wires. 4.6 The same entry continued till the supersession of Notification No 12/2012 dt 17.03.2012, till 30.06.2017, at the time of introduction of GST. The above clearly explains that from 1994 onwards the notification has been issued exempting the impugned goods and the wording used in the notification then till the notification under consideration remains the same. The Ministry itself was always of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law. 7. As noted in the order of reference the correct position vis-`-vis the observations in para 11 of Dhiren Chemical's case (supra) has been stated in Kalyani's case (supra). If the submissions of learned counsel for the assessee are accepted, it would mean that there is no scope for filing an appeal. In that case, there is no question of a decision of this Court on the point being rendered. Obviously, the assessee will not file an appeal questioning the view expressed vis-`-vis the circular. It has to be the revenue authority who has to question that. To lay content with the circular would mean that the valuable right of challenge would be denied to him and there would be no scope for adjudication by the High Court or the Supreme Court. That would be against very concept of majesty of law declared by this Court and the binding effect in terms of Article 141 of the Constitution. 4.8 Nothing has been brought forth in the appeal or during the arguments to show that there was any subsequent change in the wording of the Notification, or a pronouncement of Hon ble Supreme Court or a Hon ble High Court has come which goes contrary to the above clarification. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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