TMI Blog2016 (2) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... granted by the Development Commissioner, Special Economic Zone. Irrespective of nomenclature used by the assessee or the Special Economic Zone, this Tribunal is of the considered opinion that what was manufactured by the assessee is pendant. Therefore, there is no violation of conditions imposed by the Development Commissioner. Coming to quality/purity of the gold, the contention of the Revenue is that the purity of gold is 99.5% in the product manufactured by the assessee. The pendants usually have the purity of 91.6%. No doubt, the purity of the gold would depend upon the product manufactured by the assessee. When the product is manufactured with diamond as a designery stone, the purity is normally less than 90%. In other words, the pendant or medallion with diamond would have the purity of gold at 18 Carat. In case, the ordinary stones are used, the purity would be normally 20 to 22 Carats. If the pendant or medallion is made without any natural or artificial stone, then it can have the purity of 99.5% or 24 Carat. Therefore, the purity would depend upon the design and stones implanted on the pendant or medallion. Therefore, this Tribunal is of the considered opinion that mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.06.2008, approved the assessee for manufacturing of gold bangles and gold pendants/ medallions. The assessee commenced the trial production of gold pendants/medallions in April, 2009, within one year from the date of grant of approval. The assessee has also purchased 82.5 KVA Genset in October, 2008. The MEPZ Special Economic Zone granted permission for installation of the Genset on 05.12.2008. The assessee has produced copies of the file to support that the assessee has commenced manufacturing activity. MEPZ Special Economic Zone, by an order dated 03.09.2014, found that the assessee commenced production as on 14.04.2009. According to the Ld. representative, once the Special Economic Zone accepts the date of commencement of production, the Assessing Officer cannot say that the assessee had delayed commencement of production beyond the time limit mentioned in the Letter of Approval. In fact, the authority who granted approval accepted that the assessee has commenced production as on 14.04.2009. Therefore, according to the Ld. representative, the Assessing Officer cannot take different view. 3. Referring to the business activity of the assessee, the Ld. representative explained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecial Economic Zone authorizes the assessee to manufacture only gold bangles and gold pendants. In violation of approval granted by Special Economic Zone, according to the Ld. representative, the Assessing Officer found that the assessee has manufactured gold medallions. According to the Ld. representative, what was manufactured by the assessee is only gold pendants and not medallions. Referring to the dictionary meaning of the word medallion in Concise Oxford English Dictionary, Twelfth Edition, the Ld. representative submitted that medallion means a piece of jewellery in the shape of a medal, worn as a pendant. Therefore, the medallion is nothing but a product of jewellery which would be worn as pendant. Therefore, medallion is a species and pendant genesis. Pendant , according to the Ld. representative, is also called as medallion. The term pendant is carried in its definition to include medallion even in the technical sense. 4. The Ld. representative further submitted that there is no reference about any demarcation or classification under Special Economic Zone Rules, 2006. Even the Customs Tariff Act makes no classification as pendant and medallion . The functiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .R., the assessee has not commenced the production within the time limit of six months stipulated by Special Economic Zone 6. Now coming the export of finished goods, the Ld. D.R. pointed out that the assessee was authorized by Special Economic Zone to manufacture gold bangles and pendants. The assessee, in violation of the approval granted by Special Economic Zone, manufactured gold medallions. According to the Ld. D.R., gold medallion is nothing but a gold coin with purity of 99.5%. The assessee was not authorized to manufacture gold medallions. When the Managing Director Shri K. Srinivasan was examined, he confirmed that the assessee manufactured only medallions. One of the Managers Shri K. Parthasarathy also clarified that right from the commencement of the business, the assessee- firm manufactured only gold medallions and no bangle or pendant was manufactured in the unit. This was also further confirmed by the Production Supervisor Shri C. Sadasivam. The assessee obtained the opinion of Government approved valuer and he opined that medallion is usually round in shape and used for meritorious awards/gifts. The gold coin is usually round in shape without any hook or hole and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onomic Zone Act, 2005. The approval granted by the Development Commissioner under Special Economic Zone Act, 2005 was not cancelled so far and it continues. Therefore, the assessee is an entrepreneur under Section 2(j) of the Special Economic Zone Act, 2005. 8. Now coming to the product manufactured by the assessee, admittedly, the Development Commissioner granted approval for manufacturing of gold bangles and pendants. The assessee claims that what was manufactured by it is pendant. However, the Revenue claims that what was manufactured by the assessee is medallion. Therefore, we have to understand what is meant by pendant and what is meant by medallion . The words pendant and medallion are not defined in Income-tax Act or in the Special Economic Zone Act. Therefore, we have to go for meaning in the common parlance. The Concise Oxford English Dictionary, Twelfth Edition, describes these words as follows:- Pendant : A piece of jewellery that hangs from a necklace chain. Medallion : A piece of jewellery in the shape of a medal worn as pendant. In view of the meaning given in Concise Oxford English Dictionary, the words medallion and pendant are interchan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct manufactured by the assessee was described as medallion, it cannot be said that there was any violation of approval granted by the Development Commissioner, Special Economic Zone. Irrespective of nomenclature used by the assessee or the Special Economic Zone, this Tribunal is of the considered opinion that what was manufactured by the assessee is pendant. Therefore, there is no violation of conditions imposed by the Development Commissioner. 10. Now coming to quality/purity of the gold, the contention of the Revenue is that the purity of gold is 99.5% in the product manufactured by the assessee. The pendants usually have the purity of 91.6%. No doubt, the purity of the gold would depend upon the product manufactured by the assessee. When the product is manufactured with diamond as a designery stone, the purity is normally less than 90%. In other words, the pendant or medallion with diamond would have the purity of gold at 18 Carat. In case, the ordinary stones are used, the purity would be normally 20 to 22 Carats. If the pendant or medallion is made without any natural or artificial stone, then it can have the purity of 99.5% or 24 Carat. Therefore, the purity would depend u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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