2015 (4) TMI 415 - HC - Customs

Imposition of penalty and redemption fine - benefit of notification No.52/2003 - Import of certain quantity of gold jewellery for the purpose of re-export after repair/remaking - exemption denied in respect of import of marketable commodity being one weighing 3197.200 gms finished ladies gold chain (twisted rope type), normally worn with pendants - Held that - The importation of old gold/platinum/silver jewellery, if imported for repair or remake for re-export, is exempted from payment of custom duty. The appraiser report - which does not appear to have been challenged in the present instance, clearly points out that 3197.200 gms gold chain, were finished and compared with the other items imported - concededly three of them were not marketable. The appellant urges that one of the items allowed to be imported, described as assorted gold bangles of different designs/sizes, appears to be old but not used , like subject goods were finished products. However, this Court notices that the description itself facially suggests that these items were lacking in lusture and further processing such as polishing would enhance the lusture to make the product for marketable. The exercise of appraisal not having been challenged, the terms of the notification itself permit a certain element of discretion with the customs authority, who after taking into account the nature of the goods could permit them to be imported as items prescribed or determine the duty. - discretion having been exercised in the first instance and the appellant having been given a hearing at the show cause stage, this Court does not see any question of law which can be termed as substantial to engage attention. - Decided against the assessee.

Issues:
1. Imposition of penalty and redemption fine by Customs authority.
2. Interpretation of notification No.52/2003 regarding importation of gold jewellery for repair/remake.
3. Discretion of customs authority in determining duty on imported goods.
4. Challenge to CESTAT's order and grounds for appeal.

The judgment pertains to an appeal against the Customs, Excise & Service Tax Appellate Tribunal's order imposing a penalty and redemption fine on the appellant for importing gold jewellery. The appellant claimed the jewellery was for re-export after repair/remaking under notification No.52/2003. The Customs authority considered one item, a finished ladies gold chain, as falling within the purview of a marketable commodity, leading to the imposition of penalties. The appellant argued that the chains were to be assembled with mountings and remade for international sale. The Customs Commissioner confirmed the penalty, which was upheld by CESTAT. The appellant contended that CESTAT summarily rejected the appeal without reasoned consideration. The appellant highlighted that similar goods were granted exemption, but one item was denied it without proper justification. The respondent argued against interference, emphasizing the finished nature of the gold chain as per the appraiser report. The Court noted that the discretion of the customs authority in interpreting the notification was valid, and since the appraisal was unchallenged, no substantial legal question arose. The Court dismissed the appeal, stating that the issues raised were factual and did not warrant further legal review.

In this case, the primary issue was the imposition of penalties and redemption fine by the Customs authority on the appellant for importing gold jewellery. The appellant claimed the jewellery was meant for re-export after repair/remaking under notification No.52/2003. The Customs authority, however, considered one item, a finished ladies gold chain, as a marketable commodity, leading to the penalties being imposed. The appellant's argument that the chains were to be remade for international sale was countered by the Customs Commissioner's confirmation of the penalties, a decision upheld by CESTAT. The appellant raised concerns regarding the summary rejection of the appeal by CESTAT and the differential treatment of similar goods under the exemption notification.

Another crucial issue in this judgment was the interpretation of notification No.52/2003 regarding the importation of gold jewellery for repair/remake. The appellant relied on this notification to claim exemption from duties for the imported jewellery intended for re-export after repair. The Customs authority, however, based on the appraiser report, determined that the finished ladies gold chain in question did not qualify for the exemption due to its marketable nature. The Court observed that the discretion vested in the customs authority to interpret the notification and determine duties based on the nature of goods was valid. The Court emphasized that since the appraisal report was not challenged, the customs authority's decision stood, and no substantial legal question arose from the interpretation of the notification.

The judgment also delved into the discretion of the customs authority in determining the duty on imported goods, particularly in the context of the notification allowing for exemption under specific conditions. The Court noted that the customs authority's exercise of discretion, as seen in the appraisal process, was within the scope of the notification's provisions. The Court highlighted that the terms of the notification permitted a degree of discretion for the customs authority to assess the nature of goods and decide on duty implications accordingly. Since the appellant did not challenge the appraisal process, the Court upheld the customs authority's decision and reiterated the validity of their discretionary powers in such matters.

Lastly, the judgment addressed the challenge to CESTAT's order and the grounds for appeal raised by the appellant. The appellant contended that CESTAT's rejection of the appeal lacked reasoned consideration and highlighted the differential treatment of goods under the exemption notification. However, the Court, after considering the arguments presented, concluded that the issues raised primarily pertained to factual findings rather than substantial legal questions. Consequently, the Court dismissed the appeal, emphasizing that the disputes raised were more factual in nature and did not warrant further legal scrutiny.

← Previous Next →