2012 (10) TMI 739 - AT - Customs

Duty exemption denied for gold mountings and findings in jewellery; Revenue appeals allowed

The Tribunal held that gold mountings and findings do not qualify for duty exemption under Notification No. 62/2004-Cus as they are considered parts of ... Demand of duty and penalty – import of mountings and findings of Gold jewellery - benefit of duty exemption under Notification No. 62/2004-Cus - expression “gold in any form” or “silver in any form” shall include medallions and coins but shall not include jewellery made of gold or silver as the case may be and foreign currency coins – Held that:- Gold mountings and findings being items as jewellery are outside the purview of Notification No. 62/2004-C.E. and, hence, the Board’s Circulars No. 40/2004-Cus., dated 4-6-04 and 13/2006-Cus., dated 29-3-06 clarifying that the gold and silver mountings and findings are covered by the Notification No. 62/2004-Cus. are contrary to the provisions of law and, hence, have no validity - duty demands raised against the respondents are confirmed along with interest under Section 28AB of Customs Act, 1962. The Revenue’s appeals are allowed. Issues Involved:1. Eligibility of gold mountings and findings for duty exemption under Notification No. 62/2004-Cus.2. Applicability of the Board's Circulars No. 40/2004-Cus. and 13/2006-Cus. in interpreting the exemption notification.3. Validity of appeals filed by the Revenue considering the monetary limits prescribed by the Board's Circular dated 17-8-11.Issue-wise Detailed Analysis:1. Eligibility of Gold Mountings and Findings for Duty Exemption Under Notification No. 62/2004-Cus.:The core dispute revolves around whether the imported gold mountings and gold findings qualify as 'gold in any form' under Notification No. 62/2004-Cus., thereby making them eligible for duty exemption, or if they should be classified as parts of jewellery, which are excluded from the notification's purview. The Commissioner had extended the benefit of the notification to these items, interpreting them as 'gold in any form.' However, the Committee of Chief Commissioners contested this, arguing that findings are parts of jewellery and mountings are semi-finished jewellery, thus excluding them from the exemption.2. Applicability of the Board's Circulars No. 40/2004-Cus. and 13/2006-Cus. in Interpreting the Exemption Notification:The respondents relied heavily on the Board's Circulars No. 40/2004-Cus. and 13/2006-Cus., which clarified that gold mountings and findings fall within the scope of the exemption notification. However, the Tribunal observed that while the Board can issue clarifications, it cannot expand the scope of an exemption notification issued by the Central Government. The Tribunal cited the Supreme Court's judgment in C.C.E., Bolpur v. Ratan Melting & Wire Industries, emphasizing that Circulars contrary to statutory provisions have no legal validity.3. Validity of Appeals Filed by the Revenue Considering the Monetary Limits Prescribed by the Board's Circular Dated 17-8-11:The respondents argued that the appeals should be dismissed based on the Board's Circular dated 17-8-11, which prescribes a monetary limit of Rs. 5,00,000/- for filing appeals to the Tribunal. However, the Tribunal noted that these appeals were filed in 2007, prior to the issuance of the Circular. The Tribunal clarified that the Circulars dated 20-10-10 and 17-8-11 are administrative guidelines and cannot be applied retrospectively. Additionally, the issue involved has a recurring effect, justifying the maintainability of the appeals.Conclusion:The Tribunal concluded that gold mountings and findings are to be treated as jewellery, thus excluding them from the purview of Notification No. 62/2004-Cus. The Board's Circulars No. 40/2004-Cus. and 13/2006-Cus. were deemed contrary to the statutory provisions and invalid. Consequently, the Tribunal set aside the Commissioner's orders, confirmed the duty demands along with interest, and allowed the Revenue's appeals.