Gold coin classification under customs law: non-legal-tender coins fall under articles of gold, with exemption and no prohibition.

Gold coins that are not legal tender fall under CTH 7114 as articles of gold, not under CTH 7118 as coins, because the latter covers coins only where legal tender status exists or has ceased to exist. On that classification, the claimed customs exemption under Notification No. 152/2009-Customs, as amended, was available, as the goods were treated as freely importable articles of gold. The Tribunal also held that the coins were not prohibited goods merely because no Reserve Bank of India letter was produced; in the absence of any operative restrictive regulation, confiscation, penalty and duty demand could not be sustained.

---

---

Issues: (i) Whether imported gold coins are classifiable under CTH 7114 1910 or CTH 7118 9000; (ii) Whether exemption from customs duty under Notification No. 152/2009-Customs dated 31.12.2009 as amended by Notification No. 66/2016-Customs dated 31.12.2016 was available; (iii) Whether the imported gold coins were prohibited goods merely for want of a Reserve Bank of India letter.

Issue (i): Whether imported gold coins are classifiable under CTH 7114 1910 or CTH 7118 9000.

Analysis: The tariff entries were examined with reference to the chapter notes, the General Rules for Interpretation, and the HSN explanatory notes. CTH 7118 was found to cover coins of any metal only when they are legal tender, with the heading also extending to coins no longer legal tender, but not to gold coins which were never legal tender. CTH 7114, on the other hand, covers articles of gold, and gold coins were treated as articles of gold struck in coin form. On that basis, the imported goods were held to fall outside CTH 7118 and within CTH 7114.

Conclusion: The classification under CTH 7114 1910 was upheld and the Department's classification under CTH 7118 9000 was rejected, in favour of the assessee.

Issue (ii): Whether exemption from customs duty under Notification No. 152/2009-Customs dated 31.12.2009 as amended by Notification No. 66/2016-Customs dated 31.12.2016 was available.

Analysis: Once the goods were held classifiable under CTH 7114, they were treated as freely importable articles of gold. The record also showed that restrictions and RBI-based limitations did not apply to such gold coins in the relevant regime, and the import policy position supported availability of the exemption. The Department's reliance on a contrary understanding of the import policy and the country-of-origin document was not accepted.

Conclusion: The exemption under Notification No. 152/2009-Customs, as amended by Notification No. 66/2016-Customs, was held to be available to the assessee.

Issue (iii): Whether the imported gold coins were prohibited goods merely for want of a Reserve Bank of India letter.

Analysis: The Tribunal held that the Department had not shown any operative regulation issued by the Reserve Bank of India that prohibited import of such gold coins. A mere reference to RBI correspondence or departmental memoranda was insufficient to treat the goods as prohibited. The goods were therefore not liable to confiscation on that basis, and the consequential penalty and duty demand could not survive.

Conclusion: The imported gold coins were not prohibited goods, and the confiscation and penalty findings were not sustained, in favour of the assessee.

Final Conclusion: The impugned order was set aside and the appeal was allowed, as the imported gold coins were held classifiable under CTH 7114, not prohibited, and entitled to the claimed exemption.

Ratio Decidendi: Gold coins that are not legal tender are to be classified as articles of gold under CTH 7114, and not as coins under CTH 7118; in the absence of a valid restrictive regulation, such imports cannot be treated as prohibited goods or denied a beneficial exemption.

---