TaxTMI 
TaxTMI 
2023 (5) TMI 1133
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.... 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, 1985 and availed exemption 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). However, as alleg....
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....age 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. Noticee further averred that in the process adopted by JMPIc, the supplier cum manufacturer was a secondary refining process where pure platinum was obtained in a form commercially known as ....
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....4)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/ platinum alloys. The various steps involved in the process were broadly as under: a. Smelting: This was a pyrometallurgical process wherein the process material was melted at 1200°C for around 12 hours in large reverberatory furnaces to separate the non-metallic components. Two types of bullion feeds were produced: a silver based feed containing platinum and palladium, and an iron based feed which contained all of the six platinum group metals (for short PGM) namely ruthenium, rhodium, palladium, osmium, iridium, and p....
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....ee 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 mm'. Thus the goods imported by the noticee are in powder form or not has to be decided in the light of this statutory definition. Though, no definition of unwrought and wrought is given in the Section or Chapter Notes of Chapter 71, in the Notes to Heading 81.01 of the HSN [Explanatory Notes Fifth Edition (2012)] the terms Unwrought metal and Wrought metal has been defined as follows: "(B) Unwrought metal, e.g., in blocks, ingots, sintered bars and rods, or as waste and scrap....
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....d 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 semi-finished forms and hence the notification applies to any unfinished form or any semi-finished form. It is also clarified in the Additional U.S. Notes to Chapter 71 of Harmonized Tariff Schedule of the United States (2012)- Supplement 1 that sponge is unwrought form of metal. It has further been clarified therein that wrought form is semimanufactured form and covers metal in powder form, other than primary metal in powder form which is unwrought form....
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.... 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 notifications being in the nature of sub-legislation are to be interpreted strictly. ● Reliance is placed on the decisions in the case of Gammon India Ltd. [2011 (269) ELT 289 (SC), Mihir Textiles Ltd. [1997 (92) ELT 9 (SC), Hari Chand Shri Gopal [2010 (260) ELT 3 (SC) and Hemraj Gordhandas [1978 (2) ELT J350 (SC)]. ● By applying the above principles, the benefit of exemption notification cannot be exte....
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.... 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 clarified that exemption of notification no. 39/94-CE is available to all articles of precious metal including ingots etc. An Explanation is now being added to make the intention clear and to remove any doubts in the matter (Notification No. 54/95-CE refers)." TRU's Budget Circular for the 1994-95, inter alia read as follows: "The present partial exemption to articles of precious metals re-made,....
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....ntries 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 precious metals when remade, 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,....
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....lets, 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 the view that exemption needs to be granted to the metal in the form it emerges during a refining process, whether from ore concentrate or recycled material, the same could not have been denied. From perusal of the entry, it is evident that exemption has been granted to all the forms which arise subsequent to the emergence of the form in which these goods are imported. In view of the above circular, the contentions raised by the Revenue which go contrary to the circular issued by the Board cannot be justified. 4.7 In case of Ratan Wire and Melting [2005 (3) SCC 57], a five judges bench of Hon'ble Supreme Court has stated the law in respect of the clarifications and circulars issued by the Board stating as follows: "5. Learned counsel for ....