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TMI Blog2010 (7) TMI 883X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant which is a bank in the private sector, has challenged the order of clarification issued by the Commissioner in the case of SBI contending that the clarification is incorrect because according to the appellant, item is classifiable under HSN 7108.12.00 falling under entry 1(2) of the Second Schedule to the Act attracting tax at one per cent under the head "bullion". We have heard counsel appearing for the petitioner, Government Pleader for the respondent and have seen samples of the product marketed both by the SBI on whose application the impugned clarification was issued and by the appellant which is contesting the clarification issued by the Commissioner on SBI's application, which is produced as annexure C in the appeal filed by them. In the first place, we have to refer to the Rules of interpretation of the Schedules contained in appendix to the Act. What is stated in the Rules of interpretation is as follows: "The commodities in the Schedules are allotted with code numbers, which are developed by the International Customs Organization as Harmonised System of Nomenclature (HSN) and adopted by the Customs Tariff Act, 1975. However, there are certain entries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh the Customs Tariff Act, we find the description of the items with HSN Code numbers are the following: Tariff item Description of goods Unit Rate of duty Standard Preferential areas 7108 GOLD (including gold plated with platinum) unwrought or in semimanufactured forms, or in powder form Non-monetary: 7108 11 00 Powder kg. 10% . . . 7108 12 00 Other unwrought forms kg. 10% . . . 7108 13 00 Other semi-manufactured forms kg. 10% . . . 7108 20 00 Monetary Since the Rules of interpretation of the Schedules have to be in consonance with the meanings assigned to the items as described in the HSN codes, we have to only consider whether the rectangular gold bars of 10 gm. size sold by the appellant is "gold in other unwrought forms" covered by HSN Code 7108 12 00 or "gold in other semi-manufactured forms" kg. 10% . . . falling under HSN Code 7108 13 00. In this context we feel instead of referring to dictionary meaning, it would be desirable to refer to the information furnished in the website "GOLD BARS WORLDWIDE www.goldbarsworldwide.com" which describes manufacture, minting and sale of gold by world's leading manufacturers including PAMP of Switzerland which is making gold for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that, while some countries classify minted gold bars as 'unwrought', others classify them under some other category, notably as 'other semi-manufactured forms' or as 'other articles of precious metal'." Counsel for the appellant contended that the appellant is marketing rectangular gold bars in small pieces of 5 gm., 8 gm., 10 gm. and even large dimensions of 50 gm., 500 gm. and 1 kg. are also sold. However, in the impugned order the Commissioner has clarified only the rate of tax of 10 gm. rectangular piece of gold which is produced by the very same manufacturer in Switzerland and marked by them in the State. After seeing the samples, we have already found that the product is similar to the item sold by the appellant. We make it clear that our decision is only on 10 gm. rectangular gold bar and we are not considering the rate of tax applicable in respect of gold slabs of the weight 50 gms., 500 gms. or 1 kg. as the case may be, which may be used as raw material by the manufacturers for use in manufacture of gold ornaments and so much so, it may fall under the category 'unwrought forms of gold' falling under HSN Code 7108 12 00. However, we find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Traders v. Commercial Tax Officer, Tirupati [2008] 13 VST 530. We find that the said decision is not based on the description of the entries with reference to the HSN code contained in the Customs Tariff Act, but with reference to the entries in the Sales Tax Act. Moreover, the entries interpreted are not similar to the provisions under the KVAT Act involved herein. A single Bench decision of one of us (Ramachandran Nair, J.) in Bhima Jewels v. Assistant Commissioner (Assessment), reported in [2008] 12 VST 280 (Ker) is also relied on by the counsel and contended that bullion is a raw material used in the manufacture of gold ornaments. We do not think there can be any controversy on this because larger dimensions of pure gold, whether it be in slab or ingot form, are used only in the manufacture of ornaments and are not worn or as such used for any other purpose. However, the items involved in this case are finished small sizes of gold pieces made in ornamental form for use as such, which are items obtained after minting process where markings, engravings and printing are given for the look and shape of the product. It is pertinent to note that the SBI on whose application the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X
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