Concessional customs duty on gold mountings depends on whether the goods acquired the character of jewellery.

Imported 18-carat gold mountings were examined for eligibility to concessional duty under Notification No. 62/04-Cus., which excluded gold jewellery from the exemption. A circular issued under Section 151A of the Customs Act could not expand the notification's scope, and later Board clarification, read with Ratan Melting, confirmed that circulars bind only to the extent they are consistent with the law. The exemption therefore depended on a factual finding whether the mountings had acquired the character of jewellery. The matter was remitted for de novo decision by the Commissioner (Appeals) after fresh hearing and consideration of the circulars and legal position.

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Issues: Whether imported 18-carat gold mountings were eligible for concessional duty under Notification No. 62/04-Cus., and whether the Board circulars could be relied upon to decide the claim without examining whether the goods had acquired the character of jewellery.

Analysis: The notification excluded gold jewellery from the exemption, and a circular issued under Section 151A of the Customs Act, 1962 could not enlarge the scope of the notification. The later Board clarification and the decision in Ratan Melting established that circulars are binding only to the extent they accord with the law. On that basis, only mountings not having the character of jewellery could qualify for exemption, and the factual determination had to be made by the appellate authority after considering the relevant circulars.

Conclusion: The matter was sent back for de novo decision by the Commissioner (Appeals) after fresh hearing and consideration of the Board circulars and the legal position on the scope of exemption.

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