2001(07)LCX0043
IN THE CEGAT, SOUTH ZONAL BENCH, BANGALORE
S/Shri G.A. Brahma Deva, Member (J) and S.S. Sekhon, Member (T)
TITAN INDUSTRIES LTD.
Versus
COMMR. OF CUS. & C. EX. (A), BANGALORE
Final Order Nos. 1371-1372/2001, dated 27-7-2001 in Appeal Nos. C/797 & 798/98
Cases Quoted
Collector v. Chauhan Zavear — 1998(09)LCX0180 Eq 1999 (109) ELT 0486 (Tribunal) — Relied on .............. [Para 2 (c)]
Collector v. L.N. Gadodia & Sons (P) Ltd. — 1996(08)LCX0084 Eq 1996 (087) ELT 0495 (Tribunal) — Relied on [Para 2 (c)]
U.O.I. v. Solar Pesticides — 2000(02)LCX0147 Eq 2000 (116) ELT 0401 (S.C.) — Referred............................. [Para 2 (d)]
Advocated By : S/Shri Ram Panchu, Sr. Advocate and T. Mohan, Advocate, for the Appellant.
Smt. Radha Arun, SDR, for the Respondent.
[Order per : S.S. Sekhon, Member (T)]. - The Appellants are a well-known manufacturer of watches, watch parts and jewellery made out of precious metals. They had imported “gold findings” on 5 Bill of Entries during the period 27-4-1994 to 6-10-1994 on special import licences issued in terms of EXIM policy 1992-97, which permitted import of ‘gold’ under such licences and had claimed the benefit of Customs Notification 117/94 to concessional rate of duty. This benefit of the subject customs notification at the time of clearance was not granted and they cleared the goods on the tariff rate of duty. They filed refund claims which was rejected by the Assistant Commissioner in Appeal. The Commissioner (Appeals) remanded the matter back and in remand the refund claim was once again rejected by the lower authorities. The present appeal is against this rejection of the refund claim.
2. We have heard learned Senior Advocate, Shri Ram Panchu alongwith Shri T. Mohan, Advocate for the appellants and Smt. Radha Arun, SDR for the Revenue and after considering their submissions and the material find :-
(a) The Commissioner (Appeals) had concluded that the goods under import had acquired the essential character of an article and were required to be classifiable under Heading 7113.19 which covers articles of jewellery, of other precious metals. Having thus settled classification of the goods under import, he proceeded to examine the applicability of Notification 117/94 and considering that statutes must, strictly construction is called according to the wordings, and on careful reading of the notification, he concluded that the notification will not be applicable to articles of sub-chapter III of Chapter 71 as the Chapter which covers ‘jewellery, gold-smiths, silver-smiths wares and other articles’. He finds that the notification covers only ‘gold’ and not ‘articles of gold’ and because the import was of articles of gold, the benefit of the notification was not eligible. He held that the refund claimed was also barred by the provisions of Section 28D.
(b) We find, that it is an admitted fact, that the goods under import are unfinished or in semi-manufacture form, jewellery parts. The goods under question need further processes of working on them, to become what is understood as jewellery. Therefore, we cannot approve the classification of such crude jewellery, which are admittedly in parts and not full jewellery and requires further manufacturing, completing and finishing processes, to be classified as articles of jewellery under 7113/7113.19 as arrived at by the learned Commissioner. The classification of crude jewellery or in semi-manufactured form parts of gold would be more appropriately be classifiable under 7108.13 under the heading “other semi-manufactured forms of gold”. By reading the heading notes under 7108 of HSN, we cannot find the imported items to be excluded ‘from semi manufactured forms of gold’ falling under Heading 7108.13. These HSN notes only excludes ‘Blanks of jewellery’ and there is no finding that the subject imports are such.
(c) We find that Notification 117/94-Cus., dated 21-4-1994 has been amended on 1-11-1995. The imports in the present case have been made before this amendment. This notification exempts ‘goods of the description specified in column (2) of the table hereto and falling within chapter 71 of the First Schedule to the Customs Tariff Act, 1975’. The table, in column (2), had the description ‘gold’ and covered ‘gold’ without any classifications of any sub-heading or sub-chapter number. We are therefore, not able to find any restriction in the coverage of the description of the items of ‘gold’ in the table. The only interpretation would be that all items made are of gold, which fall under chapter 71, would be covered. We find that tribunal in the case of Collector of Central Excise, New Delhi v. Chauhan Zavear - 1999 (109) ELT 486 while considering Notification 117/94 have held as follows: -
“...…..Further the expression used in the list of items which are permissible to importers against SIL is simply “gold”. This would include, in our view, gold in all forms. The Revenue’s contention, based on distinction between the gold jewellery and ‘gold’ being under different Tariff headings in the Customs Tariff is of no avail inasmuch as Tariff Heading 71.08 refer to “gold unwrought or semi-manufactured form or in power form” whereas the special import licence describes the goods as ‘gold’ and not gold in unwrought form etc. Therefore, the expression in the SIL being of generic nature, it would include all types of gold including the jewellery thereof......”
Similarly, in the case of Collector of Customs, New Delhi v. L.N. Gadodia and Sons (P) Ltd. 1996 (087) ELT 495 the tribunal had held that a Notification 117/94’s, purpose was only to allow the more liberalized policy for import of gold and any interpretation which will restrict its scope will go against its very purpose of special import licences and its notification. They observed that :
“the fact that ‘gold’ was used both in SIL and in the exemption Notification has to be seen in the context of the object sought to be achieved by SIL and the exemption notification. The various Chapter headings and sub-headings given in the Customs Tariff Act are meant to (sic) one object of levying and collection of different rates of duty on different items and sub-items. In the instant case the use of the word “gold” normal meaning in common parlance which will include all items of gold.”
No other contrary decision has been shown to us. Once we find that the classification of the items under import is correctly under 7108.13 as semi-manufactured gold, following these decisions of the Tribunal, we have no hesitation, in setting aside the order of assessment as made in these cases.
(d) The learned Senior Advocate has submitted before us that the finding of ‘unjust enrichment’ is not arrived at by the Assistant Commissioner and the Commissioner (Appeals) has gone beyond the scope of their original appeal. He also submitted that the appellant possesses documents and Chartered Accountant Certificates to prove that there is no unjust enrichment in the facts of this case and requested for the consequential benefits. We find that the documentary evidence has not been examined by the original authority and in terms of the Supreme Court decision in the case of Solar Pesticides - 2000(02)LCX0147 Eq 2000 (116) ELT 0401 (S.C.) this matter should be examined in the light of the principle of unjust enrichment and thereafter an appropriate order of the refund to be paid to the consumer welfare fund or the importer should be settled as provided under Section 27 of the Customs Act, 1962.
3. In view of our findings the order is set aside and the matter remanded to the original authority for re-determination of the claim of refund as per findings herein above. The learned Advocate mentioned that this refund is pending for a long time and in view of the same, we direct the lower authority to settle the same within a period of three months from the receipt of this order. The importer/appellants should produce all the relevant documents and material to justify their claim of refund in light of allegation of the unjust enrichment. Appeals disposed of in above terms.
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Equivalent 2001 (135) ELT 425 (Tri. - Bang.)