ORDER
Archana Wadhwa, Member (Judicial)
1. The stay petition filed against the demand of pre-deposit of duty amount of Rs. 80,02,147/- and an identical amount of personal penalty imposed under the provision of Section 11AC read with Rule 173Q.
2. The short issue required to be decided in the present appeal is to whether the spent catalyst cleared by the appellant from their premises to the job workers without payment of duty for recovery of precious metals viz. platinum is an acceptable product or not.
3. Shri V. Sridharan, Ld. Advocate appearing for the appellant submits that the issue is no more resintegra and has been decided by the Tribunal in the case of Kusum Product’s as also by the larger bench’s decision of the Tribunal in the case of Markfed Vanaspati and Allied Industries. He submits that the said decisions were placed before the Commissioner who has observed that the Revenue has not accepted the Tribunal’s decision in the case of Markfed Vanaspati and has filed an appeal before the Hon’ble Supreme Court. He submits that the appeal filed by the Revenue before the Supreme Court has since been decided as reported in 2003 (55) RLT 745 (SC) laying down that the spent earth is not a product arising as result of manufacture and the same cannot be held to be excisable though specified in the tariff.
4. After hearing Shri. M.K. Gupta, Jt.C.D.R. and after going through the impugned order we find that the Commissioner has observed as under:-
“M/s. Nirma Ltd. has claimed that spent catalyst is not a manufactured product and, therefore, it is not chargeable to Central Excise duty and they have relied on the CEGAT’s decision in case of Kusum Products v. CCE, – 1988 (33) ELT 639, wherein, it was held that spent nickel catalyst is not excisable since the same is not the result of manufacture. They pleaded that this decision was upheld by the Supreme Court in 1995(78) ELT A 217 and this was subsequently followed in case of CCE v. Mehta Vegetable Products – 1997 (93) ELT 229 which is approved by the Larger Bench of Tribunal in Markfed Vanaspati and Allied Industries v. CCE – 2000 (116) 204. I find that the Department have taken the stand that due to continuous use of the catalyst, the same loses its catalytic properties after use and after its standard life it cannot be used as catalyst and it becomes only spent catalyst. Thus, a new product comes into existence through a manufacturing activity which is liable for duty. The spent catalyst is used for recovery of precious metals and it cannot be activated to make it usable as catalyst. The spent catalyst is a marketable commodity separately identifiable in market being bought and sold as a separate commodity for recovery of precious metals. I find that the stand taken by the investigating officers is correct as spent catalyst is known in the market as a separate commodity and it is marketable for recovery of precious metals. The catalyst falling under heading 38.15 cannot become spent without manufacturing activity. If the catalyst is kept as such without any use, it cannot become spent catalyst. It becomes spent catalyst when it is used in manufacture of some commodity and, therefore, in that process, it all gets converted into spent catalyst. Therefore, spent catalyst which is fit for recovery of precious metal is a manufactured commodity and the decisions relied upon by M/s. Nirma Ltd. are nto applicable in this case. Hon’ble Supreme Court has admitted the appeal of the Department against decision of CEGAT in case of Markfed Vanaspati & Allied Industries reported in 2000 (118) 204 (T) and now the matter is subjudice before the Hon’ble Supreme Court in Civil Appeal No. D 21502 of 2000 filed by the Commissioner, Central Excise, Kanpur. There is a specific entry under heading 71.01 for other waste and scrap which is used for recover of the precious metal and such spent catalyst is properly classifiable under that heading.
5. From the above it is clear that the Commissioner ha snot followed the larger bench’s decision of the Tribunal on the ground that the same has been challenged before the Hon’ble Supreme Court. We find that the said appeal filed by the Revenue stands dismissed. As such we of the view that the appellant has been able to make out a prima facie case in their favour so as to allow the stay petition. We order accordingly.
(Dictated in Open Court)