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2017 (2) TMI 521 - GUJARAT HIGH COURT

2017 (2) TMI 521 - GUJARAT HIGH COURT - TMI - Classification of goods - NEBULA Jewellery Watch - whether fall under Entry 13(ii) of Schedule-II to the Value Added Tax Act or under Entry 87 of Second Schedule to the Act? - Held that: - As per meaning of Jewel /Jewellery in Law Lexicon Dictionary means Articles manufactured from those for the purpose of personal adornment are known as articles of jewellery. Even hair pin, hat pin, buckles and other similar ornaments adapted for personal use or oth .....

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) of Schedule II of the Act - appeal dismissed - decided against Revenue. - TAX APPEAL NO. 46 of 2017 With CIVIL APPLICATION (OJ) NO. 58 of 2017 In TAX APPEAL NO. 46 of 2017 - Dated:- 3-2-2017 - MR. M.R. SHAH AND MR. B.N. KARIA, JJ. FOR THE APPELLANT : MS MAITHILI MEHTA, AGP FOR THE OPPONENT : M/S WADIAGHANDY AND CO, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0] Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Gujarat Value Adde .....

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following proposed question of law; (i) Whether the Hon ble Tribunal has erred in law and in facts in holding that NEBULA Watch is falling under Entry 13(ii) of the Act? [2.0] The facts leading to the present Appeal in a nutshell are as under; [2.1] The learned Joint Commissioner of Commercial Tax, Legal, Gujarat State, Ahmedabad passed the determination order dated 12/10/2011 holding that the goods in question i.e. NEBULA Jewellery Watch fall under Entry 87 of Second Schedule to the Act and th .....

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es (NEBULA brand), Jewellery (Tanishq brand), Spectacles (sun glasses /goggles - Fastrack Brand) at his various factories in India. It was the case on behalf of the assessee /dealer that the NEBULA Jewellery Watch is made of gold and /or silver and /or diamonds and /or precious stones and /or semi previous stones. It was contented on behalf of the assessee /dealer that the NEBULA Jewellery Watch would fall under 13(ii) of Schedule II of the Act. It was the case on behalf of the assessee /dealer .....

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/- to ₹ 2000/-, and therefore, it was submitted that the jewellery watch is in fact a piece of jewellery, where a watch movement is embedded in such jewellery. It was contended on behalf of the assessee that the buyer is very much interested in buying such item as jewellery because of its ornamental value and the status it carries in the society. It was submitted that one who wants to buy a watch only would buy a simple watch, but who wants to buy something more than a simple watch and a u .....

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h is a watch which carries mechanism of Watch. It was the case on behalf of the State that there is no specific entry of watch, and therefore, it would fall under Entry No.87 of Second Schedule of the Act. On appreciation of material on record and considering Entry No.13(ii) of Schedule II of the Act, by the impugned judgment and order, the learned tribunal has held that NEBULA Jewellery Watch would fall under Entry No.13(ii) of Schedule II of the Act. However, while holding so, the learned trib .....

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lding that NEBULA Watch is falling under Entry 13(ii) of the Act? [3.0] Ms. Maithili Mehta, learned AGP appearing on behalf of the State has vehemently submitted that in the facts and circumstances of the case, the learned tribunal has materially erred in holding NEBULA Watch as jewellery and thereby has materially erred in holding that the same shall fall under Entry No.13(ii) of Schedule II of the Act. It is submitted that the learned tribunal has not properly appreciated the fact that ultimat .....

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or Jewellery . It is submitted that in the present case, the learned tribunal has proceeded on the footing, whether the NEBULA Watch can be said to be jewellery falling under Entry No.13(ii) of Schedule II of the Act or not? Relying upon the literature of NEBULA Watch from net it is submitted that even according to the respondent - assessee /dealer, NEBULA is a latest collection in watch. It is submitted that therefore NEBULA Watches are required to be treated and considered as watch, which wou .....

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y error in holding that NEBULA Watch is a jewellery falling under Entry 13(ii) of Schedule II of the Act. It is submitted that, as such, NEBULA Watch is predominantly a jewellery made of 18 Karat gold in which precious metals are used. It is submitted that, as such, it is a jewellery watch manufactured and designed by the precision craftsman of the Company and by the designers and artisans like goldsmith. It is submitted that the value of gold and /or silver and /or precious stones in the NEBULA .....

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therefore the NEBULA Watch is more a jewellery rather than watch. It is submitted that therefore the same is rightly to be held to be falling under Entry No.13(ii) of Schedule II of the Act. It is further submitted that either it may be treated as Article or Jewellery as the same is made of gold and /or silver and /or other precious metals and /or precious stones, and therefore, the same shall fall under Entry 13(ii) of Schedule II of the Act. [4.1] It is further submitted by Shri Tanvish Bhatt, .....

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on behalf of the respondent - assessee has also heavily relied upon the meaning of Jewellery in Law Lexicon Dictionary. It is submitted that any item in which gold or silver or precious metals or precious stones is used predominantly may be a watch, dress, goggles, hairpins etc. can be said to be a jewellery. It is further submitted that the word Jewellery contained in Entry No.13(ii) of Schedule II of the Act is required to be given the widest meaning /sense. In support o the above submissions, .....

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e /dealer and against the revenue. [5.0] Heard the learned advocates appearing on behalf of the respective parties at length. The short question, which is posed for the consideration of this Court is, whether NEBULA Watch can be said to be jewellery falling under Entry No.13(ii) of Schedule II of the Act or not? Entry No.13(ii) of Schedule II of Value Added Tax Act reads as under; Articles or Jewellery made of gold or silver or both or of other precious metals (studded or not studded with precio .....

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like goldsmith. NEBULA Watches are sold by and large at jewellery shops and they are not sold in normal ordinary watch shops. Thus, the jewellery watches are normally marketed by the jeweller in their showrooms. From the certificate of authentic person, production In-charge of the factory, it appears that in making NEBULA Watch huge labour /making charges is spent ranging upto ₹ 18,000/- to ₹ 65,000/-. From the certificate produced on record, it appears that NEBULA Watches are manual .....

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it is manufactured as a jewellery watch rather than simple watch, the value of watch is approximately ₹ 3 lakh per piece. Though, the jewellery watch is not defined under the Act, however, as per Entry No.13(ii) of Schedule II of the Act, Articles or Jewellery made of gold or silver or both or of other precious metals (studded or not studded with precious stones or pearls whether real, artificial or cultured), shall fall under Entry No.13(ii) of Schedule II of the Act. In the present case .....

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and each watch is crafted to perfection under supervision of highly skilled technicians. It is further submitted that NEBULA Watch is a delicate blend of the finest craftsmanship in jewellery making and the latest in watch technology. At this stage, meaning of Jewellery in Law Lexicon dictionary is required to be referred to, which reads as under; Jewel. A precious stone; a gem; a valuable stone set and prepared for wear; an ornament of dress, usually made of a precious metal, having precious s .....

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ls, a necklace of bears claws, a head ornament of sharks teeth, though possessing no value in themselves, are esteemed valuable in the communities where they are worn; and we, therefore, constantly find them referred to in books written in the English language - books of travel, standard works, encyclopedias, and scientific dissertations upon sociology - we find those articles described in those books as jewelery . The articles of value used for personal adornment in our civilization are, and fo .....

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d for personal use or otherwise, and composed of base metal or imitation of precious metals and otherwise, some being set with imitation precious stones are dutiable as jewellery. As per meaning of Jewel /Jewellery in Law Lexicon Dictionary means Articles manufactured from those for the purpose of personal adornment are known as articles of jewellery. Even hair pin, hat pin, buckles and other similar ornaments adapted for personal use or otherwise, and composed of base metal or imitation of prec .....

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