Classification of gold ornaments with imitation stones as non-jewellery under a luxury goods schedule turns on the precious character of the stones.

Gold ornaments studded with imitation stones were held not to fall within "jewellery" in serial No. 22 of the luxury goods schedule because the entry focused on ornaments associated with precious or artificial precious stones and pearls. The decisive factor was the precious character of the studding material; imitation stones, being low-value and non-precious, did not satisfy that classification. Earlier decisions on wider notification language were treated as confined to their own facts and did not govern the present entry. The reference question was answered in the negative, in favour of the assessee.

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Issues: Whether gold ornaments studded with imitation stones fall within the expression "jewellery" in serial No. 22 of the schedule of luxury goods so as to attract tax at the higher rate.

Analysis: The relevant entry in serial No. 22 emphasized jewellery together with precious stones, synthetic or artificial precious stones and pearls. The deciding factor was the precious character of the studding material. Imitation stones, being of low value and not precious in character, did not satisfy the scope of the entry. Earlier authorities dealing with wider wording in different notifications were confined to their own facts and did not control the present classification entry.

Conclusion: Gold ornaments studded with imitation stones are not jewellery within serial No. 22, and the reference question was answered in the negative in favour of the assessee.

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