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TMI Blog2022 (4) TMI 1370X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 71.14 of HSN clearly shows that they are identical. Likewise, CTH 7114 19 is identical to sub-heading 7114.19 of HSN. It is also seen that CTH 7118 is identical to heading 71.18 of HSN and CTH 7118 10 and CTH 7118 90 are identical to sub-headings 7118.10 and 7118 90 of HSN. It is clear that sub-headings 7118.10 and 7118.90 of HSN will cover only that sub-category of COINS which fulfill the aforesaid conditions and the sub-headings cannot be read in a manner so to over ride or travel beyond the Explanatory Notes provided for the main heading. Thus, coins of heading 7118 of HSN would be those made by stamping sheet and struck with appropriate dies of officially prescribed weight and design and issued under government control for use as legal tender. Sub-heading 7118.10 of HSN would cover coins which are no longer legal tender or intended to be legal tender, while sub- heading 7118.90 of HSN would cover coins which are legal tender in the country of issue - when HSN is a safe guide for tariff classification under the Tariff Act, CTH 7118 under which the description of goods is coin would apply to coins of any metal of officially prescribed weight and design issued under government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation dated 31.12.2016 and ordered for recovery of differential duty with interest. The Principal Commissioner also held that the goods provisionally cleared were liable to confiscation under section 111(d) of the Customs Act, 1962 [the Customs Act] but since the goods were not available and had already been cleared against Bond and Bank Guarantee, redemption fine with penalty under section 112 of the Customs Act was also imposed. 2. Customs Appeal No's. 50165 of 2021, 50166 of 2021 and 50197 of 2021 have also been filed by M/s. Roots Network LLP, M/s. Insat Export Pvt. Ltd. and M/s. Kesari Jewellers Marketing, respectively, to assail similar orders passed by the Principal Commissioner. 3. The details of the Bills of Entry and the demand made in the aforesaid four appeals are as follows: Customs Appeal No. 50192 of 2021 SN. BoE No. and Date Value (₹) Total Differential Duty (₹) Provisionally Assessed 1. 2628451 dated 28.07.2017 4,01,17,565 42,56,072 2. 2640702 dated 28.07.2017 13,89,31,850 1,47,39,280 3. 2884716 dated 17.08.2017 12,18,97,787 1,29,32,136 3,19,27,489 Finally Assessed 4. 2804040 dated 10.08.2017 27,12,028 28,77,191 5. 2927341 da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22.07.2017 5,34,97,543 56,75,554 3. 2596441 dated 25.07.2017 10,76,27,657 1,14,18,218 4. 2622540 dated 27.07.2017 10,82,59,025 1,14,85,200 5. 2622542 dated 27.07.2017 12,17,77,903 1,29,19,418 6. 2638220 dated 28.07.2017 12,19,49,799 1,29,37,654 7. 2652361 dated 29.07.2017 10,81,02,814 1,14,68,628 7,15,63,054 Finally Assessed 8. 2685522 dated 01.08.2017 23,29,20,566 2,47,10,543 9. 2699884 dated 02.08.2017 20,45,08,127 2,16,96,267 10. 2714101 dated 03.08.2017 13,74,82,447 1,45,85,513 11. 2772714 dated 08.08.2017 13,60,82,502 1,44,36,993 12. 2772714 dated 08.08.2017 20,44,09,211 2,16,85,773 9,71,15,089 Total Demand Details (A) Grand Total 16,86,78,143 (B) Redemption Fine Imposed against Provisionally Assessed BoEs [u/s. 125] 7,15,00,000 (C) Penalty Imposed [u/s. 112] 1,60,00,000 4. The appellants claim to have imported articles of gold which are round in shape and have images of gods, saints, temples or historical sites. These articles are struck in the form of a coin and according to the appellant are not or were not intended to be legal tender and infact were more akin to medals or medallions and were loosely or colloquially de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Chapter Note for Chapter 71 of the CTA which are relevant in this case. I do not find anything in the said Section Notes and Chapter Notes that excludes GOLD COIN from the CTH 7118. I also do not find any heading or sub-heading in Chapter 71 of the CTA or for that matter in any Chapter which has specific entry for "Coin" or "Gold Coin". Therefore, I find that the classification of impugned goods remains under CTH 7118. This view also finds support from GIR 3(a), as discussed hereinafter, which provides that "the heading which provides the most specific description shall be preferred to headings providing a more general description" 47. Now the issue to be decided is what would be the tariff item of gold coin not being legal tender. From the above, it is clear that CTH 7118 covers coin made of any metal including precious metal. I find that tariff item 7118 1000 of the CTA covers Coin (other than gold coin), not being legal tender whereas tariff item 7118 9000 of the CTA refers to coin other than coin of tariff item 7118 1000 of the CTA. In other words, tariff item 7118 9000 of the CTA covers all coins which are not covered under tariff item 7118 1000 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld coins irrespective of their being legal tenders or otherwise, the main argument put forth by ABANS that the goods imported by them were not gold coins as the same are not legal tenders of any country stands nullified. The undisputed fact which they cannot deny is that the goods imported by them are made up of gold and are round in shape and that is why they themselves have acceded to the fact that the same can loosely be referred to as the gold coins and therefore declared the same as gold coins in the Bills of Entry filed by them. ****** 65. I also find that, to corroborate the claim of classification under heading 7114 of the CTA, ABANS has placed reliance on S.No. 200 of Notification No. 12/2012-Central Excise dated 17.03.2012 vide which "Gold Coins of purity 99.5% and above having a brand name when manufactured from gold on which appropriate duty of Customs or Excise has been paid", have been exempted. It has been contended by ABANS that classification of such goods has been shown as heading 7114. ABANS has also invited attention to S.No. 3 of Notification No. 60/86-Customs dated 17.02.1986 wherein "current coin of the Government of India" classifiable under CTH 711890 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Star and Premier Trading Houses, other entities are not permitted to import gold coins (as well as medallions). Hence, once it is upheld by the Hon'ble High Court, in the Khandwala's case, that the import of goods falling under CTH 7118 9000 will be regulated by the RBI guidelines, any contrary argument made in this regard will be a mere cavil on the part of ABANS and offering any discussion on the same will be a futile exercise. ****** 86. Thus, in the light of the clarification by RBI, the DGFT and provisions of the FTP, I find that since ABANS is neither an authorized bank nor a nominated agency nor a Status Holder (Star and Premier Trading house), they are not permitted to import the impugned goods. Consequently, I find that the imported goods have been imported contrary to the prohibition imposed by the DGFT (i.e. RBI Regulations) under the provisions of Section 3(3) of the FTDR and Para 2.08 of the FTP. ****** 89. In the present case the COO produced by ABANS mentions the imported goods are classifiable under CTH 7114, whereas the said imported goods have been held to be classifiable under CTH 7118. Hence, the COO is not a valid document to allow benefit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les of Interpretation [GRI], the imported goods would not be classifiable under CTI 7118 90 00 in view of the Explanatory Notes to HSN for CTH 7118; (v) CTH 7114 covers "articles of gold". The goods imported by the appellants are articles of gold which are round in shape and, therefore, have correctly been classified by the appellant under CTI 7114 19 10; (vi) The foreign supplier issued a specific confirmation clarifying that the imported goods are articles of gold classifiable under CTH 7114; (vii) The Country of Origin Certificates issued by the South Korea Governmental Authority also certify the classification to be under CTH 7114; (viii) The burden of proof in classification cases is on the Customs Department and evidence has to be placed by it to establish mis-declaration by the importer; (ix) In the present case the classification has been decided on mere assumptions and on a complete mis-reading of the judgment of the Delhi High Court in Khandwala Enterprise; (x) In the face of consistent views that the subject goods were classifiable under CTH 7114, it was not permissible for the Principal Commissioner to hold that the goods were classifiable under CTH 7118; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v) All gold coins, whether or not legal tender, are elements of sub- heading 711890; and (vi) Once the DGFT clarified that all the subject goods shall be classified under CTI 7118 90 00 as per the clarification dated 06.09.2017 and the same having been upheld by the Delhi High Court in Khandwala Enterprise; it is not open to take a contrary view. 11. The contentions advanced by the learned counsel for the appellant and the learned authorized representatives appearing for the Department have been considered. 12. The dispute in the present appeals relates to classification of the goods described in the Bills of Entry by the appellant as "gold coins (round) (other than legal tender)". According to the appellant, the imported articles of gold which are round in shape have images of gods, saints, temples or historical sites and are struck in the form of a coin. The appellants claim that these goods are not and were not intended to be legal tender and infact were more akin to medals or medallions and were loosely or colloquially described as gold coins. It is for this reason that the appellant classified these imported goods as "articles of gold" under CTI 7114 19 10 and these goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by notification dated 31.12.2016 with effect from 01.01.2017 and the rate was reduced to NIL from 0.94. 16. It would also be useful to examine the relevant provisions of HSN. 17. 71.14 of HSN is reproduced below: "71.14 - Article of 'Goldsmiths or Silversmiths' wares and parts thereof, of precious metal or of metal clad with precious metal. - Of precious metal whether or not plated or clad with precious metal: 7114.11 - - Of silver, whether or not plated or clad with other precious metal 7114.19 - - Of other precious metal, whether or not plated or clad with precious metal 7114.20 - Of base metal clad with precious metal This heading covers articles of 'goldsmiths or silversmiths' wares as defined in Note 10 to this Chapter wholly or partly of precious metal or metal clad with precious metal. In general these goods are larger than articles of jewellary of heading 71.13; they include: (A) Articles of tableware ***** (B) Toilet articles ***** (C) Office or desk equipment ***** (D) Smokers' requisites ***** (E) Other articles for domestic or similar use, for example, busts statuettes and other figures for interior decoration, jewel eases, table centre-pieces, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise duty is now levied at the rates specified in the First Schedule to the Central Excises and Salt Act, 1944. The Central Excises and Salt Act, 1944 originally provided for only 11 items. The number of Items has since increased to 137. The levy, which was selective in nature, to start with, acquired a comprehensive coverage in 1975, when the residuary Item 68 was introduced. Thus, barring a few Items like opium, alcohol, etc., all other manufactured goods now come under the scope of this levy. 2. The Technical Study Group on Central Excise Tariff, which was set up by the Government in 1984 to conduct a comprehensive inquiry into the structure of the central excise tariff has suggested the adoption of a detailed central excise tariff based broadly on the system of classification derived from the International Convention on the Harmonised Commodity Description and Coding System (Harmonised system) with such contractions or modifications thereto as are necessary to fall within the scope of the levy of central excise duty. The Group has also suggested that the new tariff should be provided for by a separate Act to be called the Central Excise Tariff Act. 3. The Tariff suggested by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence between the meaning of the expression given in the HSN and the meaning of that term given in the Glossary of Terms of the ISI." (emphasis supplied) 21. The same view was expressed by the Supreme Court in L.M.L. Ltd. vs. Commissioner of Customs [2010 (258) E.L.T. 321 (S.C.)]. 22. A perusal of CTH 7114 and heading 71.14 of HSN clearly shows that they are identical. Likewise, CTH 7114 19 is identical to sub- heading 7114.19 of HSN. It is also seen that CTH 7118 is identical to heading 71.18 of HSN and CTH 7118 10 and CTH 7118 90 are identical to sub-headings 7118.10 and 7118 90 of HSN. In view of the aforesaid decisions of the Supreme Court, the Explanatory Notes to HSN can be taken to be safe guides for determining the classification under the Tariff Act. 23. It would, therefore, be useful to first examine the Explanatory Notes to heading 7118 of HSN. This Note extends to both the sub- headings 7118.10 and 7118.90 of HSN. It discloses that the pre- condition for any goods to fall under the heading 'COIN' (71.18) is that they are: a) made by stamping out blanks from sheet metal which are then struck with appropriate dies to produce simultaneously the design on the two faces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valore 2 7112.20 Waste and scrap of platinum and other metals of the platinum group 60% ad valorem 3 7118.90 Current coin of the Government of India Nil" (emphasis supplied) 26. The aforesaid notification has described "current coin of the Government of India" as goods falling under CTH 7118 90 with NIL rate of duty. 27. In this view of the matter, when HSN is a safe guide for tariff classification under the Tariff Act, CTH 7118 under which the description of goods is 'coin' would apply to coins of any metal of officially prescribed weight and design issued under government control for use as legal tender. CTI 7118 10 00 and CTI 7118 90 00 would cover only that category of 'coins' which fulfill the aforesaid conditions. For the reasons stated while examining sub-heading 7118.90 of HSN, CTI 7118 90 00 would cover coins which are legal tender in the country of issue. 28. The appellant had described the goods in the Bills of Entry as "gold coin" (round) (other than legal tender). Thus, coins imported by the appellant are not legal tender and nothing has been brought on record by the Department to substantiate that the goods imported by the appellant are legal tender. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kiwi) with head held high to reflect the nation's optimistic and proud spirit, NZ representing the New Zealand Mint, 1 oz, and the words in all capitalized letters NEW ZEALAND GOLD KIWI. This round is not legal tender, has no engraved nominal value, and the purchasing and selling price are determined by the current spot price for its metal content. ******** ISSUE: Whether the subject gold rounds are classified as goldsmiths' wares, of heading 7114, HTSUS, or as other articles of precious metal, in heading 7115, HTSUS. ******** We note at the outset that the rounds at issue are not legal tender. They are not struck by a national issuing authority, they do not have a face value, and they cannot be spent in their country of issue. It is for this reason that heading 7118, HTSUS, which provides for coins, is not being considered. See Headquarters Ruling (HQ) H074995, dated July 29, 2010 (classifying gold and silver coins by differentiating legal tender from commemorative coins), and see NY N016199, dated September 11, 2007 (classifying silver commemorative coins). ******** The Explanatory Notes to heading 71.14 clarify the tariff text "other articles for domestic or simil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GA-GIL, Donhwamun-Ro, Jongno-Gu, Seoul, 3. Importer (name, address, country) (optional) Abans Jewels Private Limited 416, 4TH Floor, Shah&Nahar Industrial Premises (A/1) Dhanraj Mills Compound, Sitaram Jadhav Marg, Lower Parel, City: Greater Mumbai (M Corp.), 400013, Taluka: Mumbai, India 5. For Official Use 4. Means of transport and route (optional) Departure date : 2017.07.27 Vessel's name/Aircraft etc : OZ767 Port of Discharge : India, Delhi 6. Remarks 7. HS Code (6 digit) (HS2007) 8. Description of goods, including quantity 9. Gross weigh and value (FOB) 10. Origin Criterion 11. Number and date of invoices 7114.19 1(CT) 15.8 (KG) CTH SGE170726-2 ///////////// Gold Coin (Round) 608,008 (USD) ////////////////// 2017.07.26 50GM each, /////////////////////// /////////////////// purity 99.5% (Other than legal tender) 15,000 (GR) /////////////////////////// 12. Declaration by the exporter The undersigned hereby declares that the above details and statement are correct; that all goods were produced in THE REPUBLIC OF KOREA ………………………………………&he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , has been manufactured by SAMSUNG GOLD EXCHANGE CO., LTD. and exported under India Korea CEPA 2009." 36. It would also be useful to refer to the Comprehensive Economic Partnership Agreement [CEPA] between India and Republic of Korea that was entered on 07.08.2009. The Agreement, amongst others, provides in Articles 2.5, 2.6 and 2.11: "Article 2.5: Rules of Origin Goods covered by this Agreement shall be eligible for preferential tariff treatment, provided that they satisfy the rules of origin as set out in Chapter Three (Rules of Origin). Article 2.6; Non-Tariff Measures 1. Neither Party shall adopt or maintain any non-tariff measures on the importation of any goods of the other Party or on the exportation of any goods destined for the territory of the other Party except in accordance with its rights and obligations under the WTO Agreement or in accordance with other provisions of this Agreement. 2. Each Party shall ensure that such measures are not prepared, adopted or applied with a view to or with the effect of creating unnecessary obstacles to trade in goods between the Parties. Article 2.11: Tariff Classification For the purposes of this Chapter and Chapter Thre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time, read with paragraph 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020, the Central Government hereby inserts Policy Condition No. 4 under Chapter 71 of the ITC(HS) 2017, Schedule-I (Import Policy) to read as under:- "Imports from South Korea of articles of jewellery and parts thereof, of precious metal or of metal clad with precious metal under Exim code 7113; articles of goldsmiths' or silversmiths' wares and parts thereof, of precious metal or of metal clad with precious metal under Exim code 7114; other articles of precious metal or of metal clad with precious metal under Exim code 7115; and coins under Exim code 7118 are Restricted." 2. The facility/protection under para 1.05 of FTP shall not be available for import of the above items from the date of restriction. 3. Effect of this Notification: Policy Condition No. 4 restricting imports of gold and silver under Exim Codes 7113, 7114, 7115 and 7118 from South Korea is inserted in Chapter 71 of ITC(HS) 2017." 40. It needs to be noted that all the Bills of Entry involved in the four appeals are prior to 25.08.2017. 41. This apart, the foreign supplier has also issued a certificate to Insat Exports Pvt. Ltd. cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to refer to letter No. VIII(12) Import/Gr. III. IV & VI/KCPL/39/2016 /1605 dated 30.8.2017 from the Commissioner (Customs) Air Cargo Complex seeking clarification on the above mentioned subject. 2. In the matter, it is clarified that date of reckoning of import is decided w.r.t the date of shipment, as per Para 2.17 read with para 9.11 of the HBP (2015-20). Accordingly, shipments prior to 25.8.2017 may be considered for clearance by Customs. However, of late there has been an unprecedented surge in import of gold coins from South Korea under INDIA- Korea CEPA. Customs being the verifying agency for Rules of Origin (RoO) criteria of the imported goods, may like to examine these consignments of gold with duc diligence to ensure that such imports have complied with the RoO under the Indo-Korea CEPA. 3. To further amplify the point, since Korea is not a gold producing Country, the point to be checked is whether the exported gold articles from Korea are complying with the 'origin criteria' of Product Specific Rules of Origin under India-Korea CEPA. It may so happen that gold coins are being imported into Korea only for export purpose without any conversion facility. This is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Customs (Import) regarding the above subject. 2. In the Customs Tariff heading 7118 reads as follows: 7118 7118 10 00 7118 90 00 Coin - Coin (other than gold coin), not being legal tender - Other Kg. Kg. 10% 10% - - 2.1 Within this CTH, are included: (i) coins (other than gold coin) which are "no longer legal tender" - 7118 10 00 (ii) All remaining COINs (includes all legal tender, regardless of constituent materials, and Gold Coins) - 7118 90 00 Accordingly, the classification of GOLD COINS ought to have been under 7118 90 00. 3. Furthermore, the communication exchanged with RBI dated 13th Sept, 2017, which has been enclosed with the subject letter, states that only nominated agencies can import gold coins or gold in primary forms. They have also categorically stated that other than the notified agencies/banks/Star & Premier Trading houses, import of gold coins and medallions is not permitted. 4. In view of the above, it appears that the issue of classification and eligibility of the entities who imported "gold coins" during the period 1st July to 25th Aug 2017 under India- Korea FTA requires action in terms of Foreign Trade Policy. 5. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not prohibited goods within the meaning of Section 2(32) of Customs Act, 1962. 12. Further, the Customs Act, 1962 does not authorise C.B.E. & C. to impose prohibitions by way of circulars, since as submitted supra, circular is not law. Therefore, the contention of the Learned Commissioner (Appeals) that the appellants are prohibited from importing gold granules, in terms of Circular No. 34/2013-Cus., dated 4-9-2013 and Circular No. 27/2016- Cus., dated 10-6-2016 is not legally sustainable. They are only clarificatory/procedural circulars, to give effect to the exemption contained in the above notifications, with special reference to disposal and monitoring of the gold imported, duty free, by the nominated agencies, in terms of the above notifications but do not impose any prohibitions/restrictions on the import of gold by others, on payment of appropriate Customs duty and the appellants have never claimed the benefit of the said exemption, as they are not nominated agency, specified in the FTP/Notification/Circular. Therefore, the Ld. Commissioner (Appeals) holding that, in terms of the said circulars, appellant was prohibited from importing gold is farfetched and without any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Credit (not exceeding 90 days) for Home consumption, wholesale and retail sales. Further, the Master Direction issued by the RBI is also not applicable in the present case because that instruction of the RBI only applies to Nominated Banks and Nominated Agencies as notified by DGFT. Further, I also note that in the present case, the importer has not imported gold on consignment basis and therefore, the conditions laid down by the RBI is not applicable to the appellant." (emphasis supplied) 52. Thereafter, the Circular dated 31.05.2019 was issued by the Board in connection with the decision rendered by the Bangalore Tribunal in Sri Exports stating therein that the order passed by the Tribunal is not legal and proper and, therefore, the Board decided to file an appeal. It further states that similar consignment may be dealt with in terms of the Foreign Trade Policy and Boards decision. The said Circular dated 31.05.2019 is reproduced below: "Attention is invited to two CESTAT Judgments Sri Exports versus Commissioner of Customs, Hyderabad (Final Order No. A/31/194/2018, dated 22.11.2018 in Appeal No. C/30812/2018) and Sri Exports Versus C.C. Bangalore-Cus [arising out of No. 34 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been quoted supra. In other words, there was no restriction with regard to import of gold medallion on the date the same was imported by the respondent. 10. Similarly, the gold granules were imported on 21-9-2017 and thereafter DGFT issued a Notification dated 18-12-2019 by which import policy was amended and gold in any form was allowed only to be imported through nominated agencies as notified by the Reserve Bank of India in case of Banks and for other agencies by the DGFT. Thus, it is evident that on the date when the gold granules were imported i.e., on 21-9-2017, there was no restriction on its import and the restriction was imposed subsequently on 18-12-2019 by the DGFT by way of Notification. Thus, when gold medallions and gold granules were imported, they were freely importable and the same was brought under the restricted category subsequently." (emphasis supplied) 54. The Office Memorandum dated 06.09.2017, the Office Memorandum dated 16.02.2018, the Circular dated 31.05.2019 issued by the CBEC were challenged before the Delhi High Court in Khandwala. The Revenue alleged that the gold coins imported by the petitioner were appropriately classifiable under CTI 7118 90 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said Circular, in para 8 of the show cause notices dated 12th July, 2019 and 28th June, 2019, too, therefore, cannot be legally sustained. Neither could any authority, adjudicating the said show cause notices, be bound by para 8 thereof." (emphasis supplied) 56. In respect of the Office Memorandum dated 06.09.2017 issued by DGFT, the Delhi High Court observed: "48. The grievance of the petitioner, needless to say, is directed against Para 4 of the aforesaid Office Memorandum dated 6th September, 2017, whereunder gold coins are held to be classifiable under sub-heading 7118 90 00, which would, per consequence, require the import thereof to be compliant with RBI guidelines. 49. Para 4 of the aforesaid Office Memorandum, dated 6th September, 2017, issued by the DGFT, merely states that gold coins are classifiable under Heading 7118 90 00 of the ITC (HS), whereas consignments of gold coins were being imported by wrongly classifying them under Heading 7114. Headings 7114 and 7118 of the ITC (HS) are completely aligned with the corresponding entries in the Tariff. A comparison of sub- headings 7114 and 7118 of the Tariff [or of the ITC (HS)] clearly reveals that, whereas sub-headin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merely on the basis of the impugned Office Memorandum dated 6th September, 2017, issued by the DGFT, or the impugned Office Memorandum dated 16th February, 2018, issued by the C.B.E. & C. 53. In sum and substance, therefore, it is required to be clarified that the impugned Office Memorandum, dated 6th September, 2017, issued by the DGFT, and 16th February, 2018, issued by the C.B.E. & C., cannot fetter, or bind, the adjudicating authorities, adjudicating the impugned show cause notices, issued to the petitioner and to Mink, in any manner. In other words, while the position, in law, enunciated in the said Office Memoranda, is correct, the extent to which the said position in law affects the cases of the petitioner, and of Mink, would have to be assessed, on their own merits, by the competent adjudicating authorities." (emphasis supplied) 57. Regarding the Office Memorandum dated 16.02.2018, the Delhi High Court observed as follows: "55. We are unable to sustain, to any extent whatsoever, the aforesaid Office Memorandum, dated 16th February, 2018, issued by the C.B.E. & C. To us, it appears obvious that this Office Memorandum is a transparent attempt, on the part of the C.B.E. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perish. 57. We say no more." (emphasis supplied) 58. Untimely, Delhi High Court observed as follows: "59. Resultantly, these writ petitions are disposed of, in the following terms : (i) Circular No. 450/67/2019-Cus. IV, dated 31st May, 2019, stands modified by Circular No. 450/67/2019-Cus. IV, dated 9th September, 2019, issued by the Central Board of Indirect Taxes and Customs. While no orders are, therefore, required to be passed in respect of Circular dated 31st May, 2019, Circular dated 9th September, 2019, is quashed and set aside, to the extent of the directions contained therein, especially in para 4 thereof. The effect of the said Circular shall be read as limited to conveying of information, regarding the fact that Final Order No. A/31494/2018, dated 27th November, 2018, of the Hyderabad Bench of the Tribunal, in Appeal No. C/30812/2018, and the Final Order, passed by the Bangalore Bench of the Tribunal against Order-in-Original No. 344/2018, dated 12th October, 2018, passed by the Commissioner of Customs Bangalore-I, had been appealed against, and no more. The authorities, adjudicating the show cause notices impugned in these writ petitions would be required, indep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs and observations recorded herein above." (emphasis supplied) 59. The judgment of the Delhi High Court in Khandwala can be summarized as follows: (i) The Circular dated 31.05.2019 issued by CBEC directing field formations to deal with consignments pending clearance at the airports in accordance with the view of CBEC rather than the orders of the Hyderabad Bench of the Tribunal and Bangalore Bench of the Tribunal in Sri Exports has been set aside; (ii) Office Memorandum dated 06.09.2017 issued by the DGFT merely states that gold coins fall under CTI 7118 90 00 and, therefore, import would be subject to RBI Guidelines. Since it merely sets out the indisputable statutory provision, there is no reason to interfere with it. However, the manner in which an import item is described in the Bills of Entry is not necessarily conclusive regarding its classifiability and it is always open to an importer to contend that an item is not exactly conforming to the description contained in the Bills of Entry. Thus, the importer can establish before the adjudicating authority, by cogent and convincing evidence, that the goods imported by it are entitled to the benefit of exemption; and (iii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the light of HSN Explanatory Notes to heading 71.18 of HSN and the two sub-headings. 64. The orders passed by the Principal Commissioner are based on an incorrect application of the GRI provisions and wrongly classify the imported goods under CTH 7118 on this basis. Even on application of GRI, the imported goods will not be classifiable under CTH 7118 90 00 in view of Explanatory Notes to HSN for heading 71.18. Rule 1 of the GRI states that classification has to be ascertained on the basis of Section and Chapter Notes. In terms of the Chapter and Section Notes read with the HSN Explanatory Notes, coins would be classifiable under CTH 7114 and CTH 7118 cannot be assumed to be the only entry with respect to classification of 'all coins'. The imported goods were correctly classified under CTH 7114, in as much as non-legal tender coins cannot be classified under CTH 7118. 65. The Principal Commissioner erred in holding that coins are specifically described in CTH 7118 and accordingly, on application of rule 3 (a) of GRI, the imported goods merit classification under CTH 7118. Rule 3 (a) can only be applied where goods fall in two or more headings. However, where coins which are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... early been explained by the Bangalore and Hyderabad Benches of the Tribunal in Sri Exports and by the Karnataka High Court in the matter arising out the appeal filed by the Department against the decision of the Bangalore Tribunal. The Karnataka High Court clearly held that in the absence of a specific notification issued by DGFT, there is no restriction which existed in the import of gold medallion and such restriction cannot be imposed by way of communications. 70. The power of RBI to issue directions under section 11 of FEMA extends only to authorized person with regards to making payment for foreign exchange or foreign security and RBI cannot regulate imports which are in the exclusive domain of DGFT. 71. Thus, for all the reasons stated above, it is not possible to sustain the order dated 07.09.2020 challenged in Customs Appeal No. 50192 of 2021, the order dated 09.09.2020 challenged in Customs Appeal No. 50165 of 2021, the order dated 11.09.2020 challenged in Customs Appeal No. 50166 of 2021 and the order dated 18.09.2020 challenged in Customs Appeal No. 50197 of 2021. These orders passed by the Principal Commissioner are, accordingly, set aside and all the four appeals are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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