TMI Blog2013 (11) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant, namely, GQIPL is to be added to the assessable value for determining customs duty. The impugned order denied the benefit of the exemption notifications claimed and confirmed a duty demand of Rs.25,27,89,159/- from ICICIBL along with interest. Further the goods valued at Rs.164,79,30,708/ were ordered to be confiscated under section 111(d), 111(m) and 111(o) of the Customs Act,1962. An option was given to redeem the goods on payment of a fine of Rs.8,23,00,000/-. (The goods were already cleared and were not available for confiscation or redemption). Further, a penalty of Rs.2.50 crores under Section 112(a) and 114A of the Customs Act, 1962 is imposed. 2.2. The second appellant, namely, GQIPL after taking possession of the goods from ICICB, sold such medals to M/s. Quest Net Enterprises India Pvt. Ltd. (QEIPL, in short). Apart from procuring medals imported through ICICIBL, the second appellant, GQIPL, directly imported 42 consignments of such goods by filing bills of entry in their own name during the period 01/01/2003 to 31/07/2007. In the case of gold medals imported, this second appellant had claimed classification under heading 71131190 in some cases and heading 71142020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . There is an issue of valuation adjudicated, in para 53 of the impugned order, ordering that the 2% margin charged by ICICIBL to GQIPL should form part of the assessable value for payment of duty. This issue becomes relevant if the goods are classifiable under Chapter 97 and consequently duty is to be paid based on value. If the goods are held to be classifiable under Chapter 71 the importers would be eligible to pay duty at specific rates under Notification No.80/97-Cus. and Notification No.62/04-Cus. for different periods. 4. There is contravention of RBI guidelines discussed para 25.9 but the question as to whether this issue will survive even if the goods are classifiable under Chapter 71 and how the goods would have been liable to confiscation under Section 111 (d) and 111 (o), irrespective of the classification, is not brought out clearly in the impugned order. 5. The investigation in the matter started first in the case of Bill of Entry No. 405093, dated 03.07.2007 filed by ICICIBL for clearance of 24 packages containing 4199 nos. of gold medals of purity 999.9 weighing 22,595.89 gms. valued at Rs.3,02,50,670/- and 5497 nos. of silver medals of purity 999.9 weighing 152 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... numismatic gold and silver medallions and the ISO 9001:2000 Certificate of compliance issued to QEIPL by the International Certification Services certified the scope of the certificate using expression Scope: Procurement and Sale of Numismatic Gold and Silver Medallions . He added that numismatic company is a tag line of the company and hence, these words form the part of their branding. 7. Revenue had recorded the statements of Shri N. Nagappan, Deputy Manager, M/s. Brinks Arya India Pvt. Ltd. (BAIPL, in short), which is an associate company of M/s. Brinks, Germany and engaged in the business of importing high value cargo by airlines and delivering it to customers. He stated that the expression coins-numismatics on the air way bills were included in the documents prepared by M/s. Brinks, Germany, based on the suppliers instructions. 8. Revenue also relies on comparison of value of normal gold/silver coins imported by ICICIBL, as compared to the value of impugned gold/silver medals. They further conducted enquiry about retail sale price of these items and the results are recorded in para 25.15 of the adjudication order. It was found that the impugned goods were sold in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions. (2) Blown or sucked eggs, insects in boxes, frames, etc. (other than mounted articles constituting imitation jewellery or trinkets), empty shells, other than those of a kind suitable for industrial use. (3) Seeds or plants, dried or preserved in liquid, herbariums (4) Specimens of minerals (not being precious or semi-precious stones falling in Chapter 71); specimens of petrification. (5) Osteological specimens (skeletons, skulls, bones) (6) Anatomical and pathological specimens (B) Collections and collectors pieces of historical, ethnographic, palaemotological or archaeological interest, for example: (1) Articles being the material remains of human activity suitable for the study of the activities of earlier generations, such as: mummies, sarcophagi, weapons, objects of worship, articles of apparel, articles which have belonged to famous persons (2) Articles having a bearing on the study of the activities, manners, customs and characteristics of contemporary primitive peoples, for example, tools, weapons or objects of worship (3) Geological specimens for the study of fossils (extinct organisms which have left their remains or imprints in geological strata) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on customers demand and on consignment basis....", 12.07 He argues that since these medallions are 'designed, minted and imported' based on the orders placed, which medallions have no 'rarity or age', which is sine qua non as per the last HSN Note extracted above, irrespective of the quantity involved. However, the Advocate submitted a statement showing quantity of coins imported under 97 B/E showing that most of the pieces were imported in hundreds or a few thousands. 12.08 Neither the importer nor the exporter has declared the goods as 'numismatics' in the Airway Bill. Both of them were not parties to the Airway Bills. In any case, the description in the Airway Bill (prepared by a third person) cannot be the basis to decide the classification under CTH 9705. He pointed out that one of the airway bills described the goods as = FRESHLY MINTED GOLD SILVER MEDALLIONS 12.09 He also points out the classification of the product was earlier taken up for adjudication by Show Cause Notice dated 21/09/2005, and on adjudication Classification under CTH 71 was confirmed with benefit of exemption Notification under a notification of the same nature in force for that period. This h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be determined on the basis of advertising gimmicks or marketing techniques or labels on packing materials. He relied on the following decisions of in this matter:- (i) Vicco Laborataries Vs. CCE- 2007 (218) ELT 129 (Tri-Mum) affirmed by the Apex Court as reported at 2010 (255)ELT A 83 (ii) Teracom Privat Ltd Vs. CCE-2008 (222) ELT 58 (Tri-Mum) (iii) Herbal Products Vs. CCE 2002(146) ELT 126(Tri-Bang) as affirmed by SC reported at 2004 (164) ELT A127(SC) 13.03. The Advocate points out that HSN notes are a safe guide for interpreting entries in Indian Customs Tariff as decided in the following decisions: (i) LML Ltd Vs. CC-2010 (258) ELT 321(SC) (ii) Hindalco Industries Ltd VsCCE-2009(237) ELT 588 (Tri-Ahmd.) affirmed by the Hon. Apex Court as reported at 2011(271) ELT A 70 (SC). 13.04. It is also their argument that all these goods were examined and thereafter, the customs officers classified the goods and finalized the assessment. The goods were seen by the Customs officers along with description given in import documents at the time of examination they did not consider the goods to be of numismatic interest. The advocate points out that another set of officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the public and are known as collections to the potential collectors and in common trade parlance. Hence, they are rightly classified under CTH 9705 as they are "Collections or Collectors Pieces of Numismatic Interest. Arguments based on Dictionary Meaning of Numismatic 14.09 Numismatic is not defined under Tariff Schedule nor under HSN Notes. As per Chambers Dictionary: adj. relating to money, coins or medals n. the study or collection of coins and medals. 14.10. The meaning available for "Medal" as per Chambers Dictionary is as below: n. a piece of metal used in the form of a coin bearing some design or inscription, struck or cast in commemoration of an event or as a reward of merit. 14.11. Goods in question being 'Gold and Silver coins' with various motifs, it would be correct to treat them as 'Coins and Medals'. Arguments against classification under Ch.71. i.e 7108 or 7114 or 7118. 14.12. Appellants have claimed the classification under CTH 7108. The said CTH refers to gold in unwrought or in semi-manufactured form whereas in the present case goods are in completely finished form with special craftsmanship with attendant instructions for their upkeep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for sale to general public. Moreover, during the relevant period, one number of imported 6 gram gold medallion was sold by M/s Quest Net Enterprises India Pvt. Ltd., to general public for a sum of Rs.32,200/-. 14.17. With regard to the volume of pieces in question for considering the same as 'collections and pieces of rarity', the volume needs to be examined with reference to the potential number of collectors in a population of 120 crores. In this case, even as per appellants submissions, some medallions are imported as limited as 2 or 3 or 4 or 6 and also some at a range of 50 to 100, some at 1000-4000. Even the described under single description like Lakshmi and numbered as 3798, there are so many varieties in it like 8 varieties of asthalakshmis itself. Thus, numbers of a specific variety come down drastically. Even in the later case, they were presented as limited edition of rare collections only and thus rightly under CTH 9705. 14.18 The gold coins/medals with motifs of Humayun Tomb, Tajmahal, Bahubali, Brahadeeswara Temple, Lakshmi, Ganapathi, Jesus, Ajmer Sherief, etc., are considered as items of collection. These goods, from the view point of potential `Purchaser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmicks adopted for marketing a product cannot be relied upon for deciding classification. The decisions of the Apex Court on the above two principles are already discussed in para 13.02 and 13.03 above. The Tariff is aligned to HSN codes and descriptions so that India gets integrated into the world trading community adopting the same classification of goods. 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 (as recorded in paras 11, 12.03, 12.04 above) 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. This Tribunal cannot address the issue of cheating, if any, of customers i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... get classified. Ongoing through the Customs Tariff and HSN explanatory Notes this issue does not get resolved very easily because each of the headings 7108, 7113 and 7114 and 7118 may not be exactly suitable for coins and medals for the following reasons (i) Heading 7108 covers only unwrought gold. What was imported was gold of 999.99 purity which could not be considered as unwrought (ii) Heading 7113 covers articles of Jewellery. Coin or medal cannot be considered as an article of jewellery (iii) Heading 7114 covers Articles of goldsmiths or silversmiths wares and gold/silver coin or medal cannot be considered as goldsmiths ware or silversmiths ware. However Note (E) in HSN for this heading specifically mentions that medals and medallions are covered by this heading. (iv) Heading 7118 would appear to cover coins. But HSN notes explains that this heading applies to coins of any metals (including precious metals) of officially prescribed weight and design, issued under government control for use as legal tender. However the note is to the effect that coins being legal tender of any metal will be covered by this heading falling under chapter 71 for Precious Metals. The no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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% as stated in para 25.15 of the impugned order 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. 24. There is an issue of valuation as raised in para 26(c) of the impugned order and adjudicated in para 53 of the order. We are not passing any order on this issue because the exact rule of the Customs Valuation (Determination of Price of Imported goods) Rules, 1988 relied upon is not discussed in the order. Nor was it argued by either side in detail. Further, 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. 25. For reasons reco ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
