Origin of Goods: remnants retaining essential character of gold are metal not waste, denying preferential tariff entitlement.

Remnants remaining after coins are cut from gold strips retain the essential character and utility of gold and therefore do not qualify as waste or scrap under the waste/scrap classification (heading 7112) or as 'wholly obtained' goods under the origin rules. Consequently, their origin follows that of the original gold strip and they are classifiable as gold (heading 7108). Because classification and origin requirements for the waste/scrap entry are not met, the claimed concessional tariff under the preferential notification is not available for the described remnants.

---

---

Issues: (i) Whether the remnants of precious metal (gold) remaining after cutting coins from gold strips qualify as waste or scrap originating in Malaysia under the Customs Tariff (Determination of Origin of Goods under the Preferential Trade Agreement between the Government of the Republic of India and Malaysia) Rules, 2011; (ii) Whether such remnants, if treated as originating in Malaysia, are entitled to tariff concession under serial number 1007 of Notification No. 65/2016-Customs dated 31.12.2016 (originally Notification No. 53/2011-Customs dated 01.07.2011).

Issue (i): Whether the described remnants answer to the description of waste or scrap of precious metal and thereby qualify as originating goods under the Rules, 2011.

Analysis: The Authority examined dictionary definitions of waste, scrap and remnant, the scope of headings 7108 and 7112 of the Customs Tariff, Chapter and HSN explanatory notes (including the inclusive list under heading 7112) and rule 4 of the Rules, 2011 which treats as wholly obtained those articles collected there which cannot perform their original purpose and are fit only for disposal or recovery of raw material or for recycling. The HSN guidance indicates that heading 7112 covers material fit only for recovery (e.g., sweepings, dust, shavings) and not material retaining the essential character and utility of the metal. The facts and technical process described (cutting coins from strips leaving remaining strips) show the remnants retain the essential character and unit value of gold, are usable without recovery of metal from waste-like residues, and do not acquire the nature of sweepings, dust, lemels or shavings contemplated by heading 7112 or rule 4(1)(i).

Conclusion: The remnants remain gold and do not qualify as waste or scrap of precious metal within heading 7112; therefore they are not to be treated as goods wholly obtained or produced in Malaysia under rule 4(1)(i). The country of origin of the remnants is the same as the country of origin of the original gold strip.

Issue (ii): Whether the tariff concession under serial number 1007 of Notification No. 65/2016-Customs dated 31.12.2016 is available for the described remnants when imported under a certificate of origin.

Analysis: Applicability of the concessional tariff depends on correct tariff classification and satisfaction of rules of origin. Since the described remnants are held not to be classifiable under heading 7112 but rather to retain classification as gold (heading 7108) and their origin follows that of the original gold strip, the premise for concessional treatment under the entry for waste and scrap in Notification No. 53/2011-Customs / Notification No. 65/2016-Customs does not arise for the goods as described. Other compliance requirements (direct consignment, CAROTAR, certificate of origin) remain relevant but do not alter the classification-based ineligibility.

Conclusion: The applicants' claim to tariff concession under serial number 1007 of Notification No. 65/2016-Customs dated 31.12.2016 is not accepted for the goods as described; the concession is not available to the described remnants.

Final Conclusion: The Authority rules that the remnants left after extraction of coins from gold strips are gold (not waste or scrap), retain the origin of the original gold strip, and are not classifiable under heading 7112 for purposes of preferential tariff treatment; accordingly, the claimed concessional tariff under the cited notification is not available for the described goods.

Ratio Decidendi: Material retaining the essential character and utility of a precious metal and not reduced to sweepings, dust, shavings or similar residues is classifiable as the metal (e.g., heading 7108) and does not fall within the definition of waste or scrap fit only for recovery under heading 7112 or rule 4(1)(i) of the Rules, 2011; origin and tariff concession follow correct classification.

---