AI Drafter 
TaxTMI 
TaxTMI 
2026 (4) TMI 1755
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....Customs Duty by claiming exemption under Sl. No. 966(I) of Notification No. 46/2011-Cus. dated 01.06.2011 (FTA Notification") and IGST at the rate of 3% in terms of Sl. No. 13 of Schedule V of the Notification No. 1/2017-IGST (Rate) dated 28.6.2017, on the import of the impugned goods. The Appellant obtained Certificate of Origin dated 06.10.2017 under FTA Notification, wherein it was certified that impugned goods are imported from Indonesia. 3. As the goods were not allowed clearance by the customs authorities, the Appellant requested for provisional assessment of the Bill of Entry by executing a provisional duty bond /bank guarantee. However, the goods were not allowed clearance and investigation was initiated and the impugned Bill of Entry was examined on first check basis to determine whether the actual description of goods imported with respect to its purity, weight, quantity and value was correctly declared. The examination order dated 03.11.2017, stated that the goods may be verified by the Jewellers' Association. Pursuant to the above, the Jewellers' Association vide letter dated 06.11.2017 certified after examination of the impugned goods that they correspond to the wei....
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....fore the Commissioner of Customs (Appeals), who passed the impugned order by dismissing the appeal filed by the Appellant on the basis of, inter alia, the following findings: i. 'Articles of Jewellery' are meant to be complete in all aspects and 'ready to use': ii. The examination report of the shed officer and the report of the Authorized appraiser of the Jeweller's Association undoubtedly state that the impugned goods are 'Gold chains in running length varying from 2.8 ft. to 206 ft. (approx.). Hence, the impugned goods cannot be said to be 'small objects' as defined under Chapter Note 9(a) of Chapter 71 of the Customs Tariff Act: iii. The chains of this length cannot be worn as such, as they require cutting into specific smaller lengths and attaching hooks at both ends by soldering and may require polishing. Hence, it is obvious that the chains in running length are not finished products but are subject to further process for the intended use; iv. As per FTP 2015-20, only nominated agencies specified under Para 4.41 are permitted to import gold. The Appellant admitted that it is neither a nominated agency nor authorized person,....
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....ly, Customs Tariff Item (CTI) 7113 19 90 covers '---Other; --of other precious metal, whether or not plated or clad with precious metal;- of precious metal, whether or not plated or clad with precious metal'; on a plain reading of the description of Customs Tariff Heading (CTH) 7113 and the sub-headings thereunder, it is clear that all articles of jewellery made of precious metals and parts thereof merits classification under Customs Tariff Heading (CTH) 7113. Since the impugned goods are gold chains of running length meant for wearing as neck chains, they are articles of jewellery made of gold and hence, classifiable under Customs Tariff Heading (CTH) 7113; further, Chapter Note 9(a) to Chapter 71 specifically provides for classification of 'articles of jewellery' under Customs Tariff Heading (CTH) 7113. Further, it provides an insight into the scope of the nature of articles which may be classified under Customs Tariff Heading (CTH) 7113. The relevant Chapter Note 9(a) is extracted as under: "9. For the purposes of heading 7113, the expression "articles of jewellery" means (a) any small objects of personal adornment (gem-set or not) (for example, rings, bracelet....
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....ing (CTH) 7113 should be interpreted to include various articles of jewellery in addition to those articles that are mentioned in the Chapter Note 9(a) of Chapter 71. Thus, by application of Rule 1 of the GRI which provides for classification in terms of headings and Chapter Notes, the impugned goods are to be classifiable under Customs Tariff Heading (CTH) 7113 and more specifically under Customs Tariff Item (CTH) 7113 1990; further, the HSN Explanatory Notes to Customs Tariff Heading (CTH) 7113 specifically mentions that articles of jewellery, unfinished or incomplete, are also to be classified under Customs Tariff Heading (CTH) 7113. Hence, even assuming without admitting that the impugned goods are unfinished or incomplete in nature due to the absence of hooks and as well as on account of running length, they are still classifiable under Customs Tariff Heading (CTH) 7113; impugned goods are classifiable under Customs Tariff Heading (CTH) 7113 as per Rule 2(a) of the GRI as well. Rule 2(a) of the GRI provides that articles which are incomplete or unfinished, if have attained the essential character of the complete or finished article, shall be classified under the heading of fin....
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....re cutting and slitting would not amount to manufacture. 12. The learned counsel further placed reliance on the following cases wherein it was held that mere cutting of a particular product into a smaller size without change in the nature and characteristics of the said product does not amount to manufacture as no new product emerges from such cutting. a) Commissioner of Central Excise, Chennai-II Commissionerate Vs. M/s. Tarpaulin International and Others, 2010 (8) TMI 2-Supreme Court b) Commissioner of Central Excise, Mumbai-V Vs. GTC Industries Ltd. - 2014 (302) ELT. 535 (Bom.) c) Nemlaxmi Books India P. Ltd. and Vimal Kumar Sekhani vs. CCE & ST, Surat-II, 2022 (8) TMI 537-CESTAT Ahmedabad d) Rolls Pack Vs. Commissioner of Central Excise, Mumbai, 2017 (8) TMI 1039-CESTAT Mumbai e) Commissioner of Central Excise, Belapur Vs.Upm Kymmene India Pvt. Ltd., 2015 (6) TMI 617-CESTAT Mumbai 13. The learned counsel submits that; in the instant case, the process of cutting the impugned goods into specific sizes as per the customer's requirement does not change the essential character and nature of the impugned goods. Both pre-and post-....
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....als, etc., separated from their gangues. Semi-manufactured form Semi-manufactured form Bars, rods, sections, wire, plates, sheets and strip. These are usually obtained by rolling or drawing; strip and discs, etc., may also be obtained by cutting sheet silver. The heading includes silver thread for use in the textile industry provided it has not been spun or otherwise combined with textile yarn (Section XI). Very fine sterile silver wire used for surgical sutures is, however, classified in heading 30.06. Tubes and pipes (including coiled tubing) provided that they are not made up into specific identifiable articles (e.g., parts of chemical apparatus). Foil (for silvering) is usually obtained by hammering or beating thin sheets of silver separated by sheets of goldbeaters' skin. This foil is generally put up in booklets and may be fixed to a backing of paper, plastics, etc. Purls, spangles and cuttings. Purls are small twists of silver wire used in embroidery or trimmings. Spangles and cuttings, used for the same purposes, are small pieces cut to geometric from (round, star-shaped, etc.) and usually pierced in the middle. 16. The learned counsel submits that; on the perus....
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.... and correctly declared the description and value of the impugned goods in the impugned Bill of Entry; Further in the instant case the dispute pertains to the classification of the impugned goods. Hence, confiscation under Section 111 of the Customs Act is not sustainable and consequently imposition of redemption fine in lieu of confiscation under Section 125 of the Customs Act is also not sustainable. Reliance in this regard is placed on the Sandan Vikas Vs. Commr. of Cus. New Delhi-2017 (357) E.L.T. 893 (Tri. - Del.) wherein it was held that confiscation, redemption fine and penalty are not warranted in cases of genuine dispute on classification. 19. The learned counsel submits that since the goods are not liable for confiscation under Section 111 of the Customs Act, the question of imposition of penalty under Section 112(a) of the Act does not arise. Since the appellant in their submissions related to confiscation above has clarified that there was no mis-declaration of goods, and there is only a dispute regarding the classification of impugned goods, no penalty under Section 112(a) can be imposed; reliance in this regard is placed on Kores (India) Ltd. Vs. Comm. of Cus., Nha....
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....rt 'was accorded by the customs. 24. I find that the customs authorities have reclassified the goods under Customs Tariff Item (CTI) 7108 1300 as opposed to the classification under Customs Tariff Item (CTI) 7113 1990 claimed /declared by the appellant. The department classified the impugned goods under Customs Tariff Item 7113 on the grounds that the goods are in unfinished and incomplete form and therefore they are not classifiable as 'Articles of Jewellery' under Customs Tariff Heading 7113. The relevant Chapter Note 9(a) to Chapter 71 of the Customs Tariff Act, 1975 is extracted as under: "9. For the purposes of heading 7113, the expression "articles of jewellery" means (a) any small objects of personal adornment (gem-set or not) (for example, rings, bracelets, necklaces, broaches, ear-rings, watch-chains, fobs, pendants, tie-pins, cuff-links, dress-studs, religious or other medals and insignia),......... 25. I have perused the photographs of the impugned goods submitted during the hearing. I find that the goods as imported, 'gold neck chains' though are in running length have almost attained the form of a finished article which requi....