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2017 (3) TMI 5 - AT - CustomsBenefit of N/N. 62/2004-Cus dated 12.05.2004 - import of parts/ components as well as locks, springs, spring rings, beads etc. - whether the components are correctly described as finding and are classifiable under heading 7113 19 60 and 7113 11 90 respectively, when made of gold and silver? - Held that - similar issue was decided in the case of CC, Jaipur vs. V.K. International 2012 (10) TMI 739 - CESTAT, NEW DELHI , where it was held that Gold mountings and findings being items as jewellery are outside the purview of N/N. 62/2004-C.E. and, hence, the Board s Circulars No. 40/2004-Cus., dated 4-6-04 and 13/2006-Cus., dated 29-3-06 clarifying that the gold and silver mountings and findings are covered by the N/N. 62/2004-Cus. are contrary to the provisions of law and, hence, have no validity - appeal allowed - decided in favor of Revenue.
Issues:
1. Eligibility for concessional rate of customs duty under Notification No. 62/2004-Cus for imported parts/components used in manufacturing jewelry. 2. Classification of imported parts/components as jewelry or not under the notification. 3. Interpretation of CBEC circulars regarding the eligibility of findings and mountings of gold and silver for the concessional rate. Analysis: Issue 1: The appeal was filed by Revenue against the Order-in-Appeal passed by the Commissioner (Appeals), Customs, Jaipur, challenging the eligibility of the respondent for the benefit of Notification No. 62/2004-Cus for importing parts/components for manufacturing jewelry for the period between 28.05.2011 to 20.12.2011. Issue 2: The Tribunal analyzed whether the imported parts/components, specifically gold mountings, should be classified as jewelry under the notification. The Tribunal considered the characteristics of the mountings, such as being semi-finished jewelry with the shape and character of jewelry, and concluded that they should be treated as jewelry under sub-heading 7113 19 10 of the Tariff. The Tribunal highlighted that the mountings, even if requiring further processing like setting gemstones, had the essential character of finished jewelry, thus falling outside the scope of the notification. Issue 3: The Tribunal referred to Circular No. 40/2004-Cus and Circular No. 13/2006-Cus issued by CBEC, which clarified that findings and mountings of gold and silver are covered by the notification. However, the Tribunal emphasized that while CBEC can issue clarifications on classification, it cannot expand the scope of an exemption notification. The Tribunal cited a Supreme Court judgment stating that circulars contrary to statutory provisions have no validity in law. Therefore, the Tribunal held that the CBEC circulars were not in accordance with the law and had no validity in extending the benefit of the notification to the imported items. In conclusion, the Tribunal set aside the impugned order passed by the Commissioner (Appeals) and allowed the appeal of the Revenue, confirming the duty demands raised against the respondent along with interest under Section 28AB of the Customs Act, 1962. The Tribunal's decision was based on the classification of the imported parts/components as jewelry and the invalidity of CBEC circulars in expanding the scope of the notification.
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