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2013 (11) TMI 494 - AT - CustomsClassification of the gold and silver medals imported - classifiable under Chapter 71 or under Heading 9705 00 90 - Benefit of Notification No.80/97-Cus. and Notification No.62/04-Cus. - Confiscation under section 111(d), 111(m) and 111(o) - Violation of RBI guidelines - Held that:- goods were marketed to the public as coins/medals of numismatic interest and higher prices per gram of gold/silver were charged from the buyers as compared to such prices for coins of same purity - goods were not collections at the end of the supplier but were marketed as collectors pieces - If the Explanatory Notes in HSN given in Heading 9705 is considered, the impugned goods cannot be considered as items of numismatic interest because these goods were freshly minted against orders and 100s of such pieces are minted and if there was demand from more gullible people flush with money to buy such items, many more could be minted and sold at such high prices. Since the HSN notes 9705 are very explicit in the matter, it is not proper to adopt a different classification for the reason that the exporting company was established in the year 1871 or because the marketing agency adopted a gimmick of presenting the goods as items of numismatic interest to sell the goods to retail investors at high prices. Once the classification under Heading 9705 is overruled classification under Chapter 71 follows as a corollary of the HSN notes under heading 97.05 which itself suggests classification under Chapter 71 without specifying the heading. There is no reason for altering such classification though the exact classification under Chapter 71 needs further examination - exemption under the relevant notifications Notification No.80/97-Cus. and Notification No.62/04-Cus. were available so long as the goods were classifiable under Chapter 71 irrespective of the heading under which it was getting classified under Chapter 71. The consequence of violation of RBI guidelines is the confiscation under 111(d) and 111(o) of Customs Act. It is seen that the defense arguments submitted by the ICICIBL is not examined with reference to the factual position that goods were sold by ICICIBL to on payment of RST 1% and no is finding given with reference the argument that ICICIBL was not acting as agent for GQIPL but selling the goods to GQIPL. Further, we note that the goods were not available for confiscation. So, confiscation is not maintainable and consequently, penalties under section 112 (a) also are not maintainable. Once classification under Chapter 71 is upheld the appellants were eligible to pay duty at specific rates under notifications Notification No.80/97-Cus. and Notification No.62/04-Cus. and valuation was of no consequence for payment of duty - Decided in favour of assessee.
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