TaxTMI 
TaxTMI 
2018 (8) TMI 237
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....so emerged that CIL have not taken out any license and had also not intimated the department regarding their activities. It was revealed that MDPL purchased pure platinum and supplied the same to CIL for use in the manufacture of CPC. CIL is also engaged in regenerating used platinum catalyst supplied to them by MDPL. Accordingly, show cause notices were issued to CIL inter alia, proposing recovery of duty liability in respect of regenerated catalyst and also in respect of CPC manufactured from pure platinum along with interest thereon. The show cause notices also proposed imposition of penalties under various provisions of law on CIL and MDPL. In adjudication, the original authorities confirmed the demand of duty as proposed in the show cause notices and also imposed penalty under Rule 173Q of erstwhile Central Excise Rules, 1944 on CIL and under Rule 209A ibid on MDPL. The appeals filed by both CIL and MDPL were upheld by Commissioner (Appeals) vide impugned order dated 2.8.2010. Hence the appellants are now before this forum. 2. When the matter came up for hearing, on behalf of the appellants, Ld. Counsel Shri K.V. Subramaniyan made various oral and written submissions, which....
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.... only out of raw materials supplied by MDPL and handed over the finished products for use by the latter, for which they have collected labour charges or conversion charges. 2.9 On the issue of penalties, Ld. Counsel submitted that the appellants were under the bona fide belief that no manufacturing is involved as CPL was only a platinum particle in desperation and further regeneration is nothing but reprocessing amounting to manufacture. 3. On the other hand, ld. AR Shri R. Subramaniyan supports the impugned order. The process carried out by CIL involves conversion of spent colloidal into activated platinum catalyst. Hence it is a process of regenerating resulting in emergence of a new product. The conversion of platinum supplied by MDPL to CIL is resulting in emergence of new product having a distinct name, character and use and also falls under specific Tariff entry in the Central Excise Tariff namely 2843. The appellants have themselves given two processes of production of the subject goods before the adjudicating authorities and before Commissioner (Appeals). 4. Heard both sides and have gone through the facts. 5.1 From the facts on record, it is clear that the duty....
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....Central Excise and Salt Act, 1944 or not 'turns upon whether as a result of the application of the process a new and commercially distinct article, known to the market as such, emerges at the end." b. In Cipla Ltd. Vs. Commissioner of Central Excise, Bangalore - 2008 (225) E.L.T. 403 (S.C.) the Hon'ble Supreme Court held as under : "11. Since marketability is an essential ingredient to hold that a product is dutiable or exigible, it was for the Revenue to prove that the product was marketable or was capable of being marketed. Manufacturing activity, by itself, does not prove the marketability. The product produced must be a distinct commodity known in the common parlance to the commercial community for the purpose of buying and selling. Since there is no evidence of either buying or selling in the present case, it cannot be held that the product in question was marketable or was capable of being marketed. Mere transfer of BMS by the appellant from its factory at Bangalore to its own unit at Patalganga for manufacture of final product does not show that the product was either marketed or was marketable." c. In Shyam Oil Cake Ltd. Vs. Collector of Central E....
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...."bringing into existence a new substance" and does not mean merely "to produce some change in a substance", however minor in consequence the change may be. This distinction is well brought about in a passage thus quoted in Permanent Edition of Words and Phrases, Vol. 26, from an American judgment. The passage runs thus :- "Manufacture implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation; a new and different article must emerge having a distinctive name, character or use." (Emphasis supplied by us) 21. In S.R. Tissues Pvt. Ltd. (supra), the issue for consideration was whether the process of unwinding, cutting and slitting to sizes of jumbo rolls into toilet rolls, napkins and facial tissue papers amounted to manufacture. While holding that the said process did not amount to manufacture this Court inter alia, held as under : "12.......However, the end-use of the tissue paper in the jumbo rolls and the end-use of the toilet rolls, the table napkins and the facial tissues remains the same, namely, f....
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....ain and therefore, is set aside. So ordered. 6.1 The second dispute involves conversion of pure platinum to colloidal platinum catalyst. The Ld. Advocate for appellants has been at pains to emphasize that no new product emerges and that the process is only that of job work. We are not able to appreciate these propositions. In the first place, even as per the copy of the agreement in pages 1.7 onwards of the paper book, in para 1.1 it is laid down that MDPL shall supply to CIL 'the required quantity of metallic platinum for conversion into colloidal platinum catalyst'. In para 2.5 it is reiterated that CIL shall convert the metallic platinum supplied by MDPL into active colloidal platinum catalyst. That the appellants were carrying out these two separate activities, is admitted by them in the reply dated 04.05.1991 to the Show Cause Notice in page 6 of which it is submitted that they were involved in activity relating to "conversion of platinum metal into colloidal platinum catalyst" and "regeneration of the catalyst out of the spent catalyst" in para 11 thereof. 6.2 Applying the same yardsticks laid down by the Hon'ble Apex Court in the judgment cited supra, it is found that ....