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TMI Blog2024 (4) TMI 481X X X X Extracts X X X X X X X X Extracts X X X X ..... ved that the explanatory notes to HSN for CTH 7118 provide that "this heading applies to coins of any material (including precious metals) of officially prescribed weight and design, issued under government control for use as legal tender." The said Explanatory Notes also lay down that the heading includes coins which are no longer legal tender. 3. A clarification was obtained from Directorate General of Foreign Trade (DGFT). Vide letter dated 06.09.2017 gold coins were clarified to fall under CTH 71189000 which are freely importable subject to guidelines of the designated agencies by RBI. Alleging that the impugned import is against the said guidelines and is wrongly classified under CTH 7114 1910 for gaining wrong duty exemption that vide Show Cause Notice No. 19397 dated 05.09.2019 proposing that: i) The impugned goods i.e gold coins, imported by the appellants under the impugned two bills of entry having combined declared assessable value of Rs. 12,96,53,678/- (Rupees Twelve Crores Ninty Six Lakh Fifty Three Thousand Six Hundred and Seventy Eight Only)be classified under CTH 71189000. ii) The gold coins, as imported, be confiscated under section 111(d) of the Customs Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heading i.e. CTH 7118, and sub- heading 71181000 talks about all coins except gold coins which are not being legal tender, the articles falling under tariff sub-heading 71189000 logically cover all coins including the gold coins which are legal tenders. And no other conclusion regarding interpretation of sub-heading 71189000 can be construed. Therefore, all coins including gold coins which are legal tenders deserves to be classified under CTH 71189000. Whereas, in the case of Appellant the imported goods are undisputedly not the legal tenders nor were ever legal tenders of any country. 7. Further it is brought to notice that government vide Notification No.12/2012- CE dated 17th March, 2012 classified the gold coins of purity 99.5% under Heading 7114. Burden is on the department to prove the classification of subject product. The Notification No. 152/2009- Cus dated 31.12.2009 as amended imposes a sole condition i.e. Origin of imported goods to be Republic of Korea: Sine Qua Non is satisfied. Master Direction issued by RBI does not regulate the import of gold rather discusses only the modalities of payments addressed to ADC Category- I bankers only and not to general importer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll under CTH 7114 1910 as claimed by the appellant or under CTH 7118 9000 as claimed by the department. (2) Whether the exemption from payment of Customs duty is available to the appellant with respect to imported gold coins in terms of Notification No. 152/2009-Customs dated 31.12.2009 as amended by Notification No. 66/2016 Cus. dated 31.12.2016. (3) Whether the imported gold coins can be called as the 'Prohibited Goods' merely for want of letter issued by Reserve Bank of India. 11. The findings on the respective questions as above, are as follows: Question No. 1 For this purpose, it is foremost to look into the Customs Tariff Harmonized System of Nomenclature (CTH) for both the entries in question. Tariff Items for CTH 7114 are: Tariff Item Description of goods Unit Rate of duty 7114 ARTICLES 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 : -- Of silver, whether or not plated or clad with precious metal : 7114 11 --- Articles Kg 15% 7114 11 10 --- Parts Kg 15% 7114 11 20 -- Of other precious ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ender 7118.90 - Other This heading applies to coins of any metal (including precious metals) of officially prescribed weight and design, issued under government control for use as legal tender. Consignments of individual coins or of sets of coins which are legal tender in the country of issue are classified in this heading even if they are put up for general sale in presentation cases. The heading includes coin which are no longer legal tender but it excludes collectors' pieces (see Explanatory Note to heading 97.05) Coins are made by stamping out blanks from sheet metal; there are then "struck" with the appropriate dies to produce simultaneously the designs on the two faces. The heading does not cover: (a) Medals even if "struck" in the same way as coins, these usually fall in heading 71.13, 71.14 or 71.17 or heading 83.06 (see corresponding Explanatory Notes) (b) Coins mounted in brooches, tie-pins or other objects of personal adornment (heading 71.13 or 71.17) (c) Broken, cut or battered coins of a kind usable only as scrap or waste metal" When this note is read with description of goods under CTH 7118, it becomes clear that though tariff item 7118 spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing specially one i.e. one of several things of a similar type or a thing similarly placed. As per Merriam Webster dictionary article is a thing or a person of a particular and distinctive kind of class. In the light of these definitions, it becomes clear that goods in question, (gold coins) being an object/ a thing of particular kind, hence are nothing but the articles. 17. In addition to explanatory notes to various Chapters of CTH, there are General Rules of Interpretation (GRIs) which require that classification to be determined first according to the terms of the heading of the tariff schedule as per relevant sections or chapter notes, unless otherwise require., According to the remaining GRIs, taken in their appropriate order, the Rules require that the classification of goods in the sub heading of headings shall be determined according to the terms of those sub headings, not related to sub heading notes. Similarly, the explanatory notes of Chapter although a dispositive or legally binding but provide a commentary on the scope of each heading and are generally indicative of the proper interpretation of heading of chapters or entries. As already discussed above CTH 7114 cover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds in India shall be free except regulated by way of 'prohibition', 'restriction' etc. as laid down in the Indian Trade Classification ("ITC (HS)") of exports and imports. As far as goods imported and classified under CTH 7114 1910 are concerned, in terms of the Schedule I of the ITC (HS), the same were freely importable without any restrictions prior to the issuance of the Notification No. 25/2017 dated 25.08.2017. Vide the said Import Policy, the Articles of gold were allowed to be imported free whereas coins of any metal other than gold, though were freely importable but were subject to RBI regulations. Thus Import Policy of 2017 clarifies that since the goods in question were though coins but of gold, no prohibition is at all applicable upon these coins which were merely articles of gold. 20. The department also in its letter dated 14.9.2017 issued by the Commissioner of Customs and addressed to CBEC while referring to in the judgment of M/s. Abans Jewels Pvt. Ltd.(supra) has mentioned that gold coins (other than legal tender) are excluded from CTH 7118 as per the Explanation to HSN Notes and are covered under CTH 7114 and no restrictions / prohibitions ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also been dealt with by this Tribunal in M/s. Abans Jewels (supra) case. We do not find any reason to differ from those findings which have been already followed in the case of M/s. Credence Cmmodities Exports vs. Principal Commissioner of Customs, ACC (Imports) in Customs Appeal No. 50467 of 2021. Thus the issue number 2 & 3 as formulated above also stand decided in favour of the importer holding that the gold coins herein were not restricted / prohibited goods. Accordingly, the exemption as availed by the appellant under Notification No. 152/2009-Customs dated 31.12.2009 as amended by Notification No. 66/2016 Cus. dated 31.12.2016, is held to be very much available to the appellant. We are of the opinion that Commissioner (Appeals) has wrongly relied upon the decision of Hon'ble High Court of Delhi in the case of Khandwala Enterprises Pvt. Ltd. vs. Union of India (supra) case. We find that Hon'ble High Court of Delhi while appreciating the above office memorandum dated 6.9.2017 as issued by Principal Commissioner has merely held that there was no reason to interfere with office memorandum. But, at the same time, the Hon'ble Delhi High Court also observed that importer can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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