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of <h1>CEGAT Chennai: Gold targets classified under 7101.39, duty-free under Rule 57F(3), not waste/scrap.</h1> <h3>COMMR. OF C. EX., COIMBATORE Versus TITAN INDIA LTD., HOSUR</h3> The Appellate Tribunal CEGAT, Chennai, held that depleted gold 'targets' should be classified under Heading No. 7101.39 instead of 7101.80, making them ... Classification Issues: Classification of depleted gold 'targets' under Central Excise Tariff Act, 1985 - Applicability of duty under Rule 57F(4) vs. Rule 57F(3).In this appeal before the Appellate Tribunal CEGAT, Chennai, the issue at hand concerns the classification of depleted gold 'targets' under the Central Excise Tariff Act, 1985, specifically whether the movement of these targets back to the Jewellery Division should attract duty under Rule 57F(4) at the rate of 20% or be considered duty-free under Rule 57F(3). The respondents, manufacturers of quartz watches and components, obtain these 'targets' for gold plating their products and return them to the Jewellery Division for refurbishing. The Revenue contends that the depleted targets should be classified as waste and scrap of gold under Heading No. 7101.80, attracting duty, while the respondents argue for a different classification under Heading No. 7101.39. The Tribunal must determine the correct classification and the duty implications thereof.The Revenue's grounds for appeal revolve around the argument that the depleted gold 'targets' should be classified as waste and scrap of gold under Heading No. 7101.80 due to their unusable nature after maximum utilization in the gold plating process. They assert that the targets, post-gold plating and subsequent processes, qualify as waste and scrap under the HSN explanatory notes, justifying the application of duty at 20% under Rule 57F. The Revenue challenges the respondents' classification and the procedure adopted by the manufacturers for clearing the depleted targets, emphasizing the necessity of duty imposition.During the proceedings, the Revenue reiterated its stance through its representative, highlighting the technological process involved in gold plating and manufacturing of watch components by the respondents. On the other hand, the respondents, represented by their counsel, presented samples and relied on precedents to contest the Revenue's classification proposal. They referenced the decision in Wyeth Laboratories Ltd. v. CCE and OEN (I) Ltd. v. CCE to argue against the waste and scrap classification, emphasizing the purity and intrinsic value of the remnants in question, challenging the duty imposition at 20%.Upon careful consideration of the submissions and evidence, the Tribunal rendered its decision. Firstly, it found no basis for duty recovery on the return movement of the depleted targets, aligning with the precedent set by the Larger Bench decision in Wyeth Laboratories Ltd. v. CCE. Secondly, rejecting the Revenue's proposed classification under Heading No. 7101.80, the Tribunal determined the appropriate classification to be under Heading No. 7101.39, in line with the decision in OEN (I) Ltd. Consequently, the Tribunal upheld the Commissioner's order, dismissing the Revenue's appeal and disposing of the cross objection accordingly.
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