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TMI Blog2012 (6) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... t given any reasoning to counter the various grounds given by adjudicating authority for allowing benefit of Notification No. 31/03-Cus. The definition given in the other notification clearly indicates that the such jewellery studded with Cubic Zirconia (Synthetic Stone) having negligible value is to be treated as plain jewellery. Moreover this eligible passenger has made the declaration of the goods before the Customs Officers and paid duty on the Cubic Zirconia studded in gold bangles on weight basis as gold jewellery whereas its value in very negligible as compared to gold value. The reasoning given by adjudicating authority is logical and merits acceptance. - original adjudicating authority has rightly extended the benefit of concessional rate of duty in this case in terms of Notification No. 31/03-Cus., dated 1-3-2003. Accordingly, the other charges w.r.t. confiscation of goods and imposition of penalty do not sustain - Decided in favour of assessee. - F. No. 371/61/B/2011-RA - Order No. 250/2012-Cus. - Dated:- 22-6-2012 - Shri D.P. Singh, Joint Secretary Shri Prakash Shingrani, Advocate, for the Assessee. ORDER This revision application is filed by applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r words, he put nil duty and nil fine. However, the Commissioner (Appeals) has not only denied the benefit of concessional rate of duty under Notification No. 31/2003-Cus. but also imposed redemption fine and personal penalty. This amounts to increase in levy of duty, fine and penalty. This is against the statutory provisions laid down under the Customs Act, 1962. The provisions attached to sub-section (3) of the Section 128A of the Customs Act stipulate that : an order enhancing any penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund shall not be passed unless the applicant has been given a reasonable opportunity of showing cause against the proposed order. And where the Commissioner (Appeals) is of opinion that any duty has not been levied or has been short-levied or erroneously refunded, no order requiring the applicant to pay any duty not levied, short-levied or erroneously refunded shall be passed unless the applicant is given notice within the time limit specified in section 28 to Show Cause against the proposed order. However, the Commissioner (Appeals) did not issue any Show Cause Notice to the impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s studded with low value artificially created cubic zirconia crystals and hence is covered under the scheme of Notification No. 31/2003, dated 1-3-2003. 4.6 The Appellate Commissioner failed to appreciate that the jewellery mentioned in the said notification means that the jewellery studded with precious and natural stones like diamonds whose value is much more than the gold component of the studded jewellery and such jewellery is sold in the market as diamond jewellery etc. and not gold jewellery . The reason behind such restriction was that duty on precious natural stones like diamonds was much more, as it was being levied on ad valorem basis, while on gold, the notification prescribed duty on weight basis. The Noticee s ornaments are studded with Cubic Zirconia which is a low price synthetic crystal having miniscule weight-wise value, much less than the gold. The same is also evident from the examination report of the exports, relied upon in the Show Cause Notice. The experts have stated that the artificial stones studded in the gold bangles are of negligible value if compared to the value of gold component of the bangles. The Cubic Zirconia studded ornaments are therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has also been held by the Hon ble Supreme Court in the case of Commissioner of Customs (Prev.), Amritsar v. Malwa Industries [2009 (235) E.L.T. 214 (S.C.)] that exemption notification should be read and construed literally having regard to purpose and object it seeks to achieve and if it is found that notification is applicable to the case of assessees, the assessees should not be deprived by taking recourse to doctrine of narrow interpretation simplicitor. Therefore, the exemption notification in this case cannot be read with a closed and narrow mind and as rightly held by the adjudicating authority, its benefit may be extended to the passenger. 4.10 Even though he has held that the goods are not physically available with Department, he proceeded to impose redemption fine of ₹ 10 Lakhs. This is against the settled legal position that the Department does not have the goods in its possession, which it could offer for redemption, no redemption fine can be imposed unless a bond in this regard has been submitted by the importer. In this case, the goods were cleared on payment of duty and no bond or undertaking were taken from the importer. The adjudicating authority has there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rivate Ltd. [2010 (258) E.L.T. 197]. 6. Government has carefully gone through the relevant case records and perused the impugned Order-in-Original and Order-in-Appeal. 7. It is observed that the applicant passenger had declared the impugned goods at Red Channel after arrival at CSI Airport, Mumbai as gold bangles weighing to 8.3 Kgs. and examination resulted in recovery of gold bangles 232 Pcs of Radium Plated and studded with Cubic Zirconia (Synthetic Stones) weighing to 8335.500 gms valued at ₹ 1,28,22,500/-. The Benefit of concessional rate of duty though was available to the said passenger under Notification No. 31/3003-Cus. (N.T.), 1-3-2003 in terms of Sl. No. 2 of the table of the said notification but a Show Cause Notice was issued to him for denying the benefit of notification as the said Notification covered only gold in any forms, including tola bars and ornaments excluding ornaments studded with stones or pearls and hence the imported goods being gold bangles studded with Cubic Zirconia (Synthetic Stones) were considered to be not covered by the said notification. The adjudicating authority after following due process of law extended benefit of Notification N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n from Application of Rules in Certain Cases) Order, 1993. The Rule 2(O)(h)(d) specifically stipulates that there will be no restriction on sale of gold imported by the eligible passengers. This provision of sale of gold imported by the eligible passengers is a specific provision while the Para 2.20 of the FTP as evident from heading of Chapter 2 of the policy, is a general provision. It is a well settled legal position that a specific provision shall prevail over a general provision. It is also a well settled law that the provisions of a statute are to be read harmoniously and not in a manner which would render a specific provision rather otiose or redundant. Even Reserve Bank of India has given general permission vide Notification No. F.E.R.A. 175/97-RB, dated 27th February, 1997 to the resident Indians to purchase the gold and silver imported by the N.R.Is if such gold/silver is imported under the Foreign Trade (Development and Regulation) Act, 1992 or under any other law for the time being in force. 8.2 There are many other specific provisions in the FTP and notifications issued by the Ministry of Commerce as well as Ministry of Finance which allow the import of commercial i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trument in the absence of any definition in that very document, it must be given the same meaning which it receives in ordinary parlance or understood in the sense in which people conversant with the subject matter of the statute or the statutory instrument understand it. It is evident from the invoice that the impugned bangles have been described by the jewellers as gold bangles . There is no allegation in the Show Cause Notice that the invoice is not genuine and there is no sale between the buyer and the seller. In fact, the case records indicate that an overseas enquiry was caused by the Department and it has revealed that the invoice produced by the passenger is true and the sale is genuine. Under these circumstances, it can be safely presumed that the impugned bangles i.e. the bangles studded with cubic zircon is traded and sold in the market as plain jewellery and not jewellery studded with stone. 8.6 In Notifications related to manufacturing of jewellery by the units of free trade zones, the Ministry of Finance has always considered the jewellery studded with Cubic Zirconia as plain jewellery and articles thereof unstudied . In this regard reference may be had to the Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the passenger not declared about the Cubic Zirconia studded gold bangles, there was no occasion for the detention officers to come to know about the exact description of the studding. 9. Commissioner (Appeals) has relied upon the case laws as mentioned in Para 7 above. The said case laws are cited for the proposition that exemption notifications are to be construed strictly and if the intention of Legislature is clear and unambiguous then it is not open to the Courts to add words in the exemption notification. Accordingly he has held that the benefit of said notification is not available said gold jewellery studded with Cubic Zircoinia (Synthetic Stone). It is noticed that Commissioner (Appeals) has not considered each of the grounds as discussed by adjudicating authority while extending the benefit of Notification No. 31/03-Cus. 10. Government notes that the Notification No. 31/03-Cus. exempts goods of description specified in column (2) of table in notification and falling in Chapter 71 of First Schedule to the Customs Tariff Act, 1975 when imported into India by eligible passenger from so much of duty of Customs leviable thereon which is specified in the said First Sched ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds has opined that said goods are 22 kt. Gold jewellery studded with Cubic Zirconia (Synthetic Stone) having gross weight including studded material of 8335.50 grams and the studding material value is negligible as compared to total value of the goods. Government notes that experts have not termed the said jewellery as jewellery studded with stone or pearls. The overseas enquiries conducted by Department has found it the bona fide transaction and the invoice produced by passenger was proper and genuine. 10.3 Government notes that Commissioner (Appeals) has not given any reasoning to counter the various grounds given by adjudicating authority for allowing benefit of Notification No. 31/03-Cus. The definition given in the other notification clearly indicates that the such jewellery studded with Cubic Zirconia (Synthetic Stone) having negligible value is to be treated as plain jewellery. Moreover this eligible passenger has made the declaration of the goods before the Customs Officers and paid duty on the Cubic Zirconia studded in gold bangles on weight basis as gold jewellery whereas its value in very negligible as compared to gold value. The reasoning given by adjudicating author ..... X X X X Extracts X X X X X X X X Extracts X X X X
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