2017 (4) TMI 135 - AT - Customs

Benefit of N/N. 12/2012-Cus dated 17.03.2012 as amended - import of preforms of precious and semi precious stones - denial on the ground that the imported goods cannot be considered as rough semi precious stones since they have already been partially worked upon - Held that - the description rough semi finished stones will cover anything which requires further working upon to render them as cut and polished . These would cover gem stones of various levels of working right from rough stones. In this view of the matter the imported goods will fall under Sl. No. 312 as rough semi precious stones since they need to be further worked upon to convert them into cut and polished stones. Consequently, they will be eligible for benefit of nil rate of duty for the period upto 01.03.2013. There is no dispute for the period after the amendment carried out on 01.03.2013. - appeal allowed - decided in favor of appellant.

Summary

Issues:
Benefit of customs notification for imported preforms of precious and semi-precious stones under chapter subheading 7103 of the Customs Tariff Act.

Analysis:
The appellant imported preforms of precious and semi-precious stones and claimed the benefit of entry no. 312 of notification no. 12/2012-Cus, which exempts rough semi-precious stones. The appellant also paid a concessional rate of duty of 2% under Sl. No. 313 for cut and polished stones. However, subsequent to an amendment in the notification, the Revenue alleged that the appellant was not eligible for the nil rate of duty for rough semi-precious stones. Both the original authority and the Commissioner held that the appellant was not eligible for the nil rate of duty, leading to the filing of the present appeals.

The dispute revolved around whether preforms of semi-precious stones should be considered rough semi-precious stones eligible for nil rate of duty or not. The appellant argued that preforms are partially worked rough semi-precious stones that need further processing to become cut and polished stones. The Revenue contended that preforms, having undergone some processing, cannot be classified as rough semi-precious stones and should not be eligible for the nil rate of duty.

The Customs notification in question had separate entries for rough semi-precious stones (Sl. No. 312) and cut and polished stones (Sl. No. 313). The tribunal held that preforms, being partially worked stones requiring further processing, fall under the category of rough semi-precious stones. Therefore, the tribunal concluded that for the period before the amendment on 01.03.2013, the imported preforms should be classified under Sl. No. 312 and be eligible for the nil rate of duty. Post-amendment, the preforms would be eligible for the concessional rate of 2%. As a result, the impugned orders were set aside, and the appeal was allowed with consequential benefits.

In summary, the tribunal's decision favored the appellant, recognizing preforms of semi-precious stones as rough stones eligible for the nil rate of duty before the amendment date, and at a concessional rate thereafter. The judgment emphasized the need for further processing to determine the classification of imported goods and upheld the appellant's claim for the benefit of the customs notification.