TaxTMI 
TaxTMI 
2012 (6) TMI 776
X X X X Extracts X X X X
X X X X Extracts X X X X
....N.T.), dated 1-3-2003 but the impugned jewellery being studded with stones were not covered in the above notification. Therefore a Show Cause Notice proposing denial of the benefit of concessional rate of duty was issued to the applicant. However the adjudicating authority vide his Order-in-Original No. ADC/BSN/ADJN/05/09, dated 5-11-2009 dropped the charges levelled in the Show Cause Notice and allowed clearance of the impugned goods, on payment of concessional rate of duty leviable on gold under Notification No. 31/03-Cus. (N.T.), 1-3-2003 and the goods were accordingly cleared. 3. Being aggrieved by the said order-in-original, applicant Department filed appeal before Commissioner (Appeals), who set aside the Order-in-Original and held that goods are liable to confiscation u/s 111(d)(m) of Customs Act, 1962 but since goods were not available for confiscation therefore fine of Rs. 10,00,000/- (Rs. Ten Lakh) was imposed in lieu of confiscation u/s 125 of Customs Act, 1962. He further denied benefit of Notification No. 31/2003-Cus., dated 1-3-2003 to the said goods. A penalty of Rs. 1,00,000/- was also imposed on the said passenger under Section 112 of Customs Act, 1962. 4.&e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssue any Show Cause Notice within the time limit of six months of clearance of the goods stipulated in Section 28 of the Customs Act, the order passed for increase in duty, fine and penalty is wrong and is liable to be set aside. 4.4 The order of the Appellate Commissioner is merely a recital of the appeal filed by the Department. He has not stated anything in the order as to now the judgments mentioned in the appeal memorandum and copied by him are relevant to the instant case. He has not examined, stated or discussed the merit of the defence submitted by the importer's Advocate and the judgments cited in support against the points mentioned in the appeal. He has thus acted against the well settled legal position that he has to record a specific finding on each of the point raised in the defence. Since, the appellate authority has omitted to consider relevant submissions, it has resulted in miscarriage of justice and the order is therefore, against the established principles of law. 4.5 The Appellate Commissioner failed to appreciate that the exemption Notification No. 31/2003, dated 1-3-2003 takes out of its ambit only that gold jewellery which is studded either with ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....wellery studded with stones". Even the invoices issued by M/s. Pakeeza Jewellers, Dubai related to that case indicate that such jewellery is sold in the trade as 22 carats gold jewellery and not as "Jewellery studded with stones". Copies of both these documents were enclosed for ready reference as Annexure A and Annexure B. Similarly, certificates from two reckoned jewellers of Dubai Viz. M/s. Shafiue Jewellery and M/s. Ariya Noor Jewellery were also submitted wherein they had clearly stated and certified that gold jewellery studded with Cubic Zirconia is sold as plain gold jewellery and not studded gold jewellery because of lower value of Cubic Zirconia. They have also stated and certified that it is only when the stones are studded in gold and have value more than the gold, the said jewellery is sold as "studded jewellery" or "jewellery studded with stones". Copies of both theses certificates were attached as Annexure C and Annexure D. Since it is clear from all the above-mentioned documents that the jewellery studded with Cubic Zirconia is sold and traded in the market as plain gold jewellery and not ''gold the jewellery studded with stones", no fault could be found with the dec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oreign Exchange Regulation Act, 1973 (46 of 1973) the Reserve Bank is pleased to permit any person resident in India to make payment in Indian rupees by means of a crossed cheque in India as consideration for purchase of gold/silver in any form including ornaments (b) excluding ornaments studded with stones or pearls) to a person resident outside India who has imported and sold such gold/silver in accordance with the terms and conditions imposed under any order issued by the Central Government under the Foreign Trade (Regulation and Developments) Act, 1992 or under any other law for the time being in force." The Appellate Commissioner's finding in this regard is therefore, wrong and against the provisions of exemption notifications and RBI's directives issued under FEMA. 5. Personal hearing was scheduled in this case on 21-1-2012 & 20-4-2012 and 6-6-2012 Shri Prakash Shingrani, Advocate appeared for hearing on 6-6-2012 on behalf of the applicant. The learned advocate besides reiterating the grounds of revision application pleaded that Commissioner (Appeals) did not issue Show Cause Notice within 6 months before imposing redemption fine and personal penalty; that the Cubic Zi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing process and is not applicable in the instant case as per the ratio of judgment of Hon'ble Apex Court given in the following case : (i) In the case of M/s. Orient Traders [2009 (237) E.L.T. 447 (S.C.)]. (ii) In the case of M/s. Hotel Leela Venture Ltd. [2009 (234) E.L.T. 389 (S.C.)] (iii) In the case of M/s. Mewar Bartan Nirman Udyog [2008 (231) E.L.T. 27 (S.C.)] (iv) In the case of M/s. ITC Ltd. [2004 (171) E.L.T. 433 (S.C.)]. Now the applicant in this revision application has challenged the impugned Order-in-Appeal on the grounds stated in Para 4 above. 8. Government notes that adjudicating authority has allowed the benefit of concessional rate of duly under Notification No. 31/03-Cus., dated 1-3-2003 on the following grounds : 8.1 The import of gold and silver in any form, including ornaments but excluding ornaments studded with stones and pearls, is permitted under the baggage mode to an eligible passenger by virtue of tariff Notification No. 31/03-Cus., dated 1-3-2003 on payment of concessional duty. This is an undisputed fact and position that the passenger is an eligible passenger. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r specific provisions, cannot be allowed to be imported under baggage. 8.3 Since the import of gold/silver for commercial sale by the eligible passenger is covered under the Rule 2 of saving clause of Foreign Trade (Exemptions from Application of the Rules in Certain Cases) Order, 1993, a passenger is not required to hold an I.E.C. for importing these goods. 8.4 The Foreign Trade Policy does not put any restriction on import of gold. The gold falls under Chapter 71 of the ITC (HS) and it has been allowed to be imported freely, vide amendment carried out in the ITC (HS) vide Notification No. 29/2003, dated 28-1-2004 issued by the Ministry of Commerce, on payment of appropriate Customs duties. The Notification No. 111/92-RB, dated 29-2-1992 issued under FERA is no more in force. It was long back rescinded when the FERA, 1973 was amended drastically and the regulating powers for import and export of gold and silver were taken out of purview of FERA by the Act No. 29 of 1993, dated 8-1-1993. 8.5 The Notification No. 31/03-Cus., dated 1-3-2003 does not define the term "ornaments studded with stones or pearls". The impugned bangles have been declared and found to be stu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e of the semi-precious stone should be less than the per gram value of the gold. It indicates that the intention of the Government was to allow the import of gold and silver and other components in jewellery which do not have value more than per gram of the gold or silver. In the instant case also, the Cubic Zirconia studded on the jewellery bangles are having per gram value much less than the value of the gold and thus it fulfils the Government's intention. Conversely stating, the intention of the Government is to allow import of gold and silver in any form, the value of which should predominantly consist of value of gold or silver as the duty is levied on weight basis and not gold studded with precious stones or pearls because in such as a scenario the predominant partner would be the precious stones or pearls and such jewellery is sold in the market as "diamond jewellery" and not "gold jewellery". 8.8 It is well settled law that once the passenger has himself come to the red channel and declared the goods correctly and truthfully with an intention to pay duty, there is no case of attempt on his part to evade the Customs duty or to evade any other provision. 8.9 It is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tions specified in the said notification. 10.1 In the instant case, the passenger is an eligible passenger in terms of said notification who has fulfilled all the conditions of notification. There is no dispute on this aspect. The gold jewellery imported by applicant is claimed to be covered under Sr. No. 2 of table of notification on the grounds that the ornaments i.e. gold bangles are not studded by precious stones, diamonds or pearls but studded with Cubic Zirconia which is a synthetic stone. There is no definition of term "ornaments studded with stones or pearls" in the said notification. So, the definition as given in the exemption notification relating to manufacturing of jewellery by the units of free trade zone, namely Notification No. 3/88-Cus., dated 14-1-1988 Para (xiii)(d), and Notification No. 52/03-Cus., dated 31-3-2003 Para (XV)(c) became quite relevant. The said definition is as under :- "The expression plain jewellery and articles" thereof unstudded shall, include 'Mangal Sutra' containing, gold and black beds, and jewellery studded with imitation stones and Cubic Zirconia and semi-precious stones provided that per gram value of the semi-precious stones util....