2022 (11) TMI 958 - AT - Customs

Imported Gold Coins Classified for Customs Duty Exemption Under CTH 7114

The Tribunal classified the imported gold coins under CTH 7114, making them eligible for Customs duty exemption and not restricted goods based on RBI ... Classification of imported gold coins - fall under CTH 7114 1910 as claimed by the appellant or under CTH 7118 9000 as claimed by the department? - eligibility for exemption from payment of Customs duty in terms of Notification No. 152/2009-Customs dated 31.12.2009 as amended by Notification No. 66/2016 Cus dated 31.12.2016 - whether the goods are restricted category merely on the basis of letter issued by Reserve Bank of India? Whether the gold coins imported by the appellants fall under CTH 7114 1910 as claimed by the appellant or under CTH 7118 9000 as claimed by the department? - HELD THAT:- Coins of any metal including precious metal if are legal tender in the country of issue, those are classifiable under CTH 7118. Also all coins of non legal tender but not of gold are covered under CTH 7118. Had the impugned goods, the gold coins, would be the legal tender in the country the gold coins could be classified under CTH 7118. OR, had these coins though of non legal tender, but would not have been made of gold, these could have been classified under CTH 7118. CTH 7114 covers all goldsmiths silversmiths wares of precious metal and all such things as are mentioned under note 10, whereas CTH 7118 applies to the coins of any metal including precious metals but the coin should be such as shall be issued under Government control for use as legal tender. Though coins of non legal tender are also covered in CTH 7118 but these coins should not be of gold - Keeping in view the entire discussion about Chapter Notes, explanatory notes, the General Rules of Interpretation and the description of respective entries under CTH 7114 and 7118, it becomes clear that gold coins are such articles of gold which are in the form of coin, but being the coins of non legal tender, these cannot be covered under CTH 7018. These being articles of precious metals are therefore held to be covered under CTH 7114. Whether the exemption from payment of Customs duty is available to the appellant with respect to imported gold coins in terms of Notification No. 152/2009-Customs dated 31.12.2009 as amended by Notification No. 66/2016 Cus dated 31.12.2016? - Whether the imported gold coins can be called as the goods in restricted category merely on the basis of letter issued by Reserve Bank of India? - HELD THAT:- The gold coins in question were not restricted. Only such coins as are classified under CTH 7118 that were restricted. The impugned gold coins are classified under CTH 7114. The RBI can issue regulations under section 58 of the Reserve Bank of India Act, 1934 or section 47 of the foreign Exchange Management Act, 1999. Section 58 of RBI Act requires such Regulations to be issued only by way of Notification. Section 48 of FEMA requires Regulations issued under section 47 FEMA to prior be presented before the parliament. Non of such regulations have been placed by the Department except a reference has been made to a letter issued by the RBI dated 13.09.2017 or the DGFT Memorandum. None of these documents can be called as Regulations issued by RBI. The issue of prohibition has also been dealt with by this Tribunal in M/s. Abans Jewels [2022 (4) TMI 1370 - CESTAT NEW DELHI] case. We do not find any reason to differ from those findings which have been already followed in the case of M/s. Credence Cmmodities Exports vs Principal Commissioner of Customs, ACC (Imports) in Customs Appeal No. 50467 of 2021. Thus the issue number 2 & 3 as formulated above also stand decided in favour of the importer holding that the gold coins herein were not restricted / prohibited goods. Accordingly, the exemption as availed by the appellant under Notification No. 152/2009-Customs dated 31.12.2009 as amended by Notification No. 66/2016 Cus dated 31.12.2016, is held to be very much available to the appellant. Appeal allowed. Issues Involved:1. Classification of imported gold coins under CTH 7114 1910 or CTH 7118 9000.2. Eligibility for exemption from Customs duty under Notification No. 152/2009-Customs.3. Whether imported gold coins are restricted goods based on RBI guidelines.Detailed Analysis:Issue 1: Classification of Imported Gold CoinsThe primary issue was whether the imported gold coins should be classified under CTH 7114 1910 or CTH 7118 9000. The Tribunal examined the Customs Tariff Harmonized System of Nomenclature (CTH) for both entries. CTH 7114 covers articles of goldsmiths' or silversmiths' wares and parts thereof, of precious metal or metal clad with precious metal, while CTH 7118 specifically pertains to coins, including those of precious metals. The Tribunal noted that the explanatory notes to HSN 7118 indicate that this heading applies to coins of any metal issued under government control for use as legal tender. However, the imported gold coins were not legal tender and were made of gold, thus not fitting under CTH 7118. The Tribunal concluded that gold coins, being articles of gold, fall under CTH 7114. This conclusion aligns with previous decisions in similar cases, such as Abans Jewels Pvt. Ltd. and Sri Exports.Issue 2: Exemption from Customs DutyThe Tribunal addressed whether the exemption from Customs duty under Notification No. 152/2009-Customs, as amended by Notification No. 66/2016-Cus, was applicable. The gold coins were imported from South Korea under the Indo-Korean Comprehensive Economic Partnership Agreement (CEPA), which obliges both parties to avoid non-tariff barriers and follow the Harmonized System of Nomenclature for classification. The Tribunal noted that the Reserve Bank of India (RBI) had removed the prohibition on importing gold coins and medallions in 2015. The Foreign Trade Policy 2015-20 allowed the import of goods classified under CTH 7114 1910 without restrictions. The Tribunal found that the import policy and subsequent notifications did not impose restrictions on gold coins classified under CTH 7114. Therefore, the exemption from Customs duty was applicable to the appellant.Issue 3: Restricted Goods Based on RBI GuidelinesThe Tribunal examined whether the imported gold coins were restricted goods based on RBI guidelines. The RBI can issue regulations under the Reserve Bank of India Act, 1934, or the Foreign Exchange Management Act, 1999, but such regulations must be issued by notification and presented before Parliament. The Tribunal found no such regulations were presented by the Department. The Tribunal also noted that the DGFT Notification No. 25/2017 dated 25.08.2017 restricted imports of gold coins under CTH 7118 but did not apply to gold coins under CTH 7114. The Tribunal concluded that the imported gold coins were not restricted goods and the exemption under Notification No. 152/2009-Customs was available.Conclusion:The Tribunal set aside the impugned orders, allowing the appeals. The imported gold coins were classified under CTH 7114, making them eligible for the Customs duty exemption and not restricted goods based on RBI guidelines. The Tribunal criticized the Adjudicating Authority for judicial indiscipline by not following previous decisions in similar cases.