Circular No. 431/64/98-Central Excise
Government of India
Ministry of Finance
Department of Revenue, New Delhi
Subject: Catalysts of precious metals falling under Chapter 71-scope of exemption in notification No. 05/98-C.E.-Reg.
I am directed to state tat representations have been received from the trade, regarding the scope of exemption available to precious, metals and articles of precious metals such as ingots, bars, crucibles, foils, dishes, wires, wire gauges etc. under Sl. No. 193 or 194 of Notification No. 05/98-C.E. dated 2.6.98. It has been represented that the benefit of exemption under Sl. 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 Sl. 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 Sl. No. 193, the precious metals in unfinished and semi-finished forms are subject to Nil rate of excise duty under Sl. 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 re-fabricated. Accordingly, it will be incorrect to charge duty on such goods under Sl. 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 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 Sl. 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 recovered from old or used articles or precious metals or subjected to any other similar process. In order to remove any doubts in this regard the entry at Sl. No. 36 of Notification No. 05/98-C.E. has also been amended suitable vide Notification No. 34/98-C.E. dated 10.11.98.
