Export of Gems & Jewellery by Thailand to India under EHS. - Customs - F. No. 354/259/2011-TRU

Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi dated 21-10-2011 Subject : Export of Gems Jewellery by Thailand to India under EHS. Please refer to this Office letter of even no. dated 13th September, 2011 and your letter F. No. S/VIII-48 (47 Misc/CCO-III/08 Part-I dated 27th September, 2011 on the issue of Customs authorities charging Special CV duty of 4% on all jewellery (HS 7113 19) imported from Thailand under Notification No. 85/2004-Customs, dated 31-8-2004 . 2. The recovery of differential duty of 3% has been proposed by field formations under your charge based on Para 3 of Notification No. 20/2006-Customs dated 1-3-2006 which has been interpreted to mean that what is excluded in Para 3 is a particular description or category of goods and the whole of the notification (and not just S. No. 1) of Notification No. 20/2006 . As already conveyed earlier, Para 3 of Notification No. 20/2006-Customs when read as a whole clearly rules out the benefit of S. No. 1 alone of the said notification to goods which attract Nil BCD by virtue of a free trade Agreement. This does not imply, however, that even the merit rate available under another entry of this notification would not be applicable to the goods. Thus, in the instant case the applicable Special CV duty would be 1% under S. No. 61 of the said notification. 3. Generally, divergent interpretations of a given provision are possible when there is an ambiguity in the provision. However, in the instant case, it cannot be said that the said Para 3 suffers from any ambiguity. Even if it is accepted for the sake of argument that the Para is capable of interpretations taken by your Zone apart from the one conveyed by this office, then in such cases, the object/intent behind the provision becomes important. This can be easily ascertained from Section 3(5) of the Customs Tariff Act, 1975 under which special CV duty is levied. This provision clearly delineates that this levy is intended to counterbalance sales tax VAT, local tax or any other charges. The rate of 1% Special CV duty has been prescribed for articles of jewellery because these goods attract state VAT at the rate of 1%. Therefore, for obvious reasons, imported goods cannot be subject to a higher rate of Special CV duty than is applicable to such goods when produced domestically. 4. In view of the above, it is hereby clarified that import of articles of jewellery under Notification No. 85/2004-Customs would attract Special CV duty of 1% under S. No. 61 of Notification No. 20/2006 . This issues with the approval of Member (B) [F. No. 354/259/2011-TRU]