TMI Blog1987 (5) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... nds (which, according to the authorities, were worked diamonds), weighing 640.82 carats valued at Rs. 1,22,907/-. The Customs authorities alleged that this lot of diamonds required a specific import licence for their import and clearance and further that there was mis-declaration of the goods inasmuch as rough diamonds were free of duty under Heading No. 71.02 (2) of the First Schedule to the Customs Tariff Act, 1975 whereas worked diamonds were chargeable to duty at 60% ad valorem plus 40% ad valorem under Heading No. 71.02 (5) of the said Schedule. The appellants contended that the drilled diamonds were defective ab initio and were rejections from industry, that they had no further industrial use, the only use being for production of wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... worked, but not mounted, set or strung (except, ungraded stones temporarily strung for convenience of transport); (1) xxx xxxxxx (2) Diamonds, unworked or uncut, including sawn diamonds which require further cutting or faceting, but excluding industrial diamonds. (3) xxx xxx xxx (4) xxx xxx xxx (5) Precious and semi-precious stones, cut or otherwise worked. 3. It is not the department s case that these diamonds are cut Their case is that these are worked within the meaning of sub-heading (5) inasmuch as they are drilled. The question, therefore, is whether drilling is recognised or known as working of diamonds. 4. The statutory notes to Chapter 71 of the Tariff Schedule offer no guidance in the matter. We have, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to cut diamonds only by using other diamonds, and only in certain soft" directions. Recent technological advances, however, have changed the situation." Recently, lasers, originally used to drill holes in industrial diamonds for wire drawing, have been used to drill down colored or opaque inclusions in gem diamonds ...... When parallel holes are drilled, the diamonds can be sawn by laser, and this is possible in any direction and in any size diamond. This has become a useful technique for the diamond cutter. 8. It, therefore, appears that while the term cutting is generally used as embracing the operations of cleaving, sawing, bruting and polishing, the process of drilling, along with other process, is considered as a process ..... X X X X Extracts X X X X X X X X Extracts X X X X
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