TaxTMI 
TaxTMI 
2025 (12) TMI 250
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....Sl. No. 966 of Notification No. 46/2011-Cus dated 01.06.2011 as the goods are imported from Indonesia under the ASEAN-India Free Trade Agreement (AIFTA). The goods were assessed under Faceless Assessment System by the Jaipur Customs. The assessing/adjudicating authority held that the goods are to be classified under Customs Tariff Item entry (CTI) 7118 9000 as "Gold Coins". Further as the goods are classifiable under Customs Tariff Heading (CTH) 7118, adjudicating authority held that the impugned goods can only be imported by nominated agencies of the DGFT and in the absence of a licence, the goods are held to be liable for confiscation and the issue was referred to the Port Assessment Group (PAG), where the goods are imported and are physically available i.e., Bangalore Air Cargo Customs (ACC) for action on seizure and confiscation. The SIIB unit of Air Cargo Customs, Bangalore seized the goods under Mahazar dated 08.08.2024. 3. The appellant aggrieved by the assessment order of the assessing/adjudicating authority filed an appeal before Commissioner (Appeals), who has passed the impugned Order-in-Appeal No.270/2024 dated 31.05.2024, whereby the assessment order of the adjudica....
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.... under CTH 7118 are not covered under the AIFTA as the goods are under restricted category and as per Notification No. 49/2015-2020 dated 05.01.2022 issued by DGFT, import under HS code 71189000 is restricted and can only be imported through nominated agencies as notified therein; h. The Country-of-Origin Certificate issued to the Appellant which mentions that the goods are classifiable under CTH 7114 cannot be considered as valid document to allow claimed notification benefit. The exemption benefit claimed by the appellant since the goods imported were of Indonesian origin and covered under the AIFTA as notified by the above Notification does not hold water. Since the issue is sub-judice before the Hon'ble Supreme Court, there is no infirmity in the order of the Ld. Lower Adjudicating Authority in denying the exemption to the Appellant; i. In view of restriction imposed in terms of Notification No. 49/2015-2020 dated 05.01.2022 issued by DGFT, the impugned goods became liable for confiscation under Section 111 of the Act. 5.0 The learned counsel further submitted that; the goods imported by the Importer are round in shape and have images of flowers and swa....
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.... (religious or other medallions and insignia). Hence are more akin to medals and medallions and thus, rightly classifiable under CTH 7114. 5.5 Medallions/medals are made to commemorate an event, person, or place. Although, medallions/medals are typically round in shape like coins but they are not same as coins which are classified under CTH 7118. They are not legal tenders which could be spent like coins. In this regard, reliance is placed on: a. Abans Jewels Pvt. Ltd. Vs. Principal Commissioner of Customs, ACC (Imports), New Delhi-(2023) 2 Centax 283 (Tri-Del), where, by way of a detailed judgment, it was categorically held that gold medallions are classifiable under CTH 7114. This judgment specifically discusses that CTH 7118 is only applicable to those coins which were or are legal tenders. All articles of gold which are struck in the form of a coin cannot be classified under CTH 7118. b. Abans Jewels (supra.) has also been followed by the Hon'ble Tribunal in Raja & Co. Overseas Ltd. Vs. PCC, New Delhi-(2023) 6 Centax 23 (Tri.-Del) which also holds that round shaped gold coins are classifiable under CTH 7114. c. Khandwala Finstock Pvt. Ltd. Vs. ....
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....hout admitting that the goods are classifiable under CTH 7118, the same are not subject to any restrictions as per the ITC (HS) and therefore, the order of confiscation is completely erroneous. 5.7. It is noteworthy that above judgments and specifically Abans Jewels (supra.) and Raja & Co. (supra) were pointed out before the adjudicating authority and have, in fact, been noted in the Impugned Order. Further, the Commissioner (Appeals) has also referred to these judgments (at Para 6.5 as well as at Para 7). However, in gross violation of principles of judicial discipline, the judgments have been ignored on the grounds that appeals are pending before the Hon'ble Supreme Court. It is submitted that there is no stay against the above judgments and thus, in the light of decision in Kamalakshi Finance-(1991) 55 SCC 433 (SC), the Impugned Order is liable to be set aside. In any case, there is no appeal against M/s. Sri Exports (supra.) of the jurisdictional High Court and the said judgment ought to have been followed. 5.8. In view of the above seizure and confiscation of the imported Goods and further denial of the exemption notification is completely untenable and the Impugned ....
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.... of law laid down by this Hon'ble Tribunal in several cases as well as the Hon'ble High Court in the Appellant's own case, it is clearly evident that on account of Section 110 (2), the seizure dated 08.08.2023 is non est. 6.2 In light of the above, it is prayed that the Impugned Order dated 31.05.2023 may be set aside and the consignment imported by the Appellant vide Bill of Entry dated 20.03.2023 may be ordered to be released to the Appellant. 7. The learned Authorized Representative (AR) for the Revenue, reiterated the findings in the impugned order. He also submitted the copy of the Mahazar dated 08.08.2023 wherein the goods, 709 pieces of 'Gold Coins' weighing 14.18 Kgs valued at Rs. 6,65,11,400/- have been seized by the Special Intelligence and Investigation Branch (SIIB) under Section 110 of Customs Act, 1962 on the grounds that the goods are liable for confiscation under Section 111 of the Customs Act, 1962, the copy of the handing over letter (Supurdnama) to the custodian of WFS Cargo Terminal of the seized goods and copy of letter dated 14.08.2023 addressed to the Deputy Commissioner of Customs (Import Assessment-1 section) Bangalore sent by the ....
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....nue. When the matter came up for hearing on 27.03.2025 the applicant has filed additional submissions wherein he has contended that though the Commissioner (Appeals) has upheld the confiscation there was no confiscation proceedings by the department under Section 124 and goods are not confiscated under Section 111 as was observed and upheld by the Commissioner (Appeals), therefore in the absence of confiscation proceedings having not taken up within 6(six) months of the seizure, the goods are liable to be released as per Section 110(2) of the Customs Act, 1962. 9.2 In this case we further find that the issue of classification is pending decision before the Hon'ble Supreme Court and there is no stay. However, on merits we find that the goods which are in the form of coins with embossing/ struck on both sides of the coin with Flower and Swastika or not legal tender issued under the control of the government, nor it was a legal tender earlier nor proposed to be a legal tender. 9.3 We find that the issue is no longer res integra. The issue of classification and importability was decided in the case of Abans Jewellers Pvt., Ltd. Vs. Pr. CC, Acc (Imports), New Delhi reported in....
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....ssioner are based on an incorrect application of the GRI provisions and wrongly classify the imported goods under CTH 7118 on this basis. Even on application of GRI, the imported goods will not be classifiable under CTH 7118 90 00 in view of Explanatory Notes to HSN for Heading 71.18. Rule 1 of the GRI states that classification has to be ascertained on the basis of Section and Chapter Notes. In terms of the Chapter and Section Notes read with the HSN Explanatory Notes, coins would be classifiable under CTH 7114 and CTH 7118 cannot be assumed to be the only entry with respect to classification of all coins. The imported goods were correctly classified under CTH 7114, inasmuch as non-legal tender coins cannot be classified under CTH 7118 65. The Principal Commissioner erred in holding that coins are specifically described in CTH 7118 and accordingly, on application of Rule 3(a) of GRI, the imported goods merit classification under CTH 7118, Rule 3(a) can only be applied where goods fall in two or more headings. However, where coins which are not legal tender are excluded from CTH 7118 in terms of HSN Explanatory Notes, the same cannot be included under CTH 7118 on applicati....
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....Karnataka High Court in the matter arising out the appeal filed by the Department against the decision of the Bangalore Tribunal. The Karnataka High Court clearly held that in the absence of a specific notification issued by DGFT, there is no restriction which existed in the import of gold medallion and such restriction cannot be imposed by way of communications. 70. The power of RBI to issue directions under Section 11 of FEMA extends only to authorized person with regards to making payment for foreign exchange or foreign security and RBI cannot regulate imports which are in the exclusive domain of DGFT. 9.4 We also find that the decision in Abans Jewellers Pvt., Ltd. (supra) was followed in the case of Raja & Co. Overseas Pvt., Ltd. Vs. Pr. CC, Acc (Imports), New Delhi reported in 2023 (6) Centax 23 (Tri.-Del), wherein it is held that:- 13. The phrase legal tender is not defined in any tariff heading or in any explanatory notes. Hence the dictionary meaning has to be taken into consideration. Oxford legal Dictionary defined legal tender as coins or any other money which the creditor is bound by law to accept when tendered in payment of debt. According to Webs....
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....silversmiths wares of precious metal and all such things as are mentioned under note 10, as discussed above, 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 above 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. This issue is otherwise no more res integra as has been decided by this Tribunal's Principle Bench in the case of Abans Jewels (supra) case and also by the Regional Bench of Hyderabad as well as of Bangalore in the case of Sri Exports (supra). Accordingly, the above formulated issue No. 1 stands decided in favour of the importer and against the Department. ....
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....7118 as per explanation provided in HSN Explanatory Notes and therefore, the same are covered under CTH 7114. As per import policy given in ITC (HS) Schedule 1 for CTH 7114, policy for imports of the goods covered under the said heading is 'Free' without any policy conditions. Further, reference is also made to RBI Master Circular No.17/201617 dated 1-1-2016 updated as on 12-1-2017 (as available on RBI website). As per para C. 11.1 iv of the said Master Circular, "The import of gold coins and medallions is permitted. 5. In view of the above, this office is of the view that gold coins other than legal tender are covered under CTH 7114, that is an article of gold struck in the form of coin and there was no bar till 24-8-2017 on import of such gold coins. However, the matter is being brought to your kind notice for necessary clarification" 18. The DGFT has also issued Notification No. 25/2017 dated 25-8-2017 in connection with the amendment in import policy of gold and silver under Chapter 71 of the Tariff Act. The same is reproduced below: "Directorate General of Foreign Trade Notification No. 25/2015-2020 New Delhi, Dated: 25th August, 201....
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....3 (383) ELT 560 (Tri. - Delhi) (2023) 2 Centax 285 (Tr. Delhi)]. 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 31-122009 as amended by Notification No. 66/2016 Cus dated 31-12-2016, is held to be very much available to the appellant. We are of the opinion that Commissioner (Appeals) has wrongly relied upon the decision of Hon'ble High Court of Delhi in the case of Khandwala Enterprises Pvt. Ltd. v. Union of India case (supra). We find that Hon'ble High Court of Delhi while appreciating the above office memorandum dated 6-9-2017 as issued by Principal Commissioner has merely held that there was no reason to interfere with office memorandum. But, at the same time, the Hon'ble Delhi High Court also observed that importer can always establish before the Adjudicating Authority the cogent and convenient evidence to the effect that goods imported by it are entitled to the benefit of exemption. It was also observed by the Hon'ble Delhi High Court that manne....