TMI Blog2022 (4) TMI 1370X X X X Extracts X X X X X X X X Extracts X X X X ..... dentical to heading 71.18 of HSN and CTH 7118 10 and CTH 7118 90 are identical to sub-headings 7118.10 and 7118 90 of HSN. It is clear that sub-headings 7118.10 and 7118.90 of HSN will cover only that sub-category of COINS which fulfill the aforesaid conditions and the sub-headings cannot be read in a manner so to over ride or travel beyond the Explanatory Notes provided for the main heading. Thus, coins of heading 7118 of HSN would be those made by stamping sheet and struck with appropriate dies of officially prescribed weight and design and issued under government control for use as legal tender. Sub-heading 7118.10 of HSN would cover coins which are no longer legal tender or intended to be legal tender, while sub- heading 7118.90 of HSN would cover coins which are legal tender in the country of issue - when HSN is a safe guide for tariff classification under the Tariff Act, CTH 7118 under which the description of goods is coin would apply to coins of any metal of officially prescribed weight and design issued under government control for use as legal tender. CTI 7118 10 00 and CTI 7118 90 00 would cover only that category of coins which fulfill the aforesaid conditions. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication dated 31.12.2016 and ordered for recovery of differential duty with interest. The Principal Commissioner also held that the goods provisionally cleared were liable to confiscation under section 111(d) of the Customs Act, 1962 [ the Customs Act ] but since the goods were not available and had already been cleared against Bond and Bank Guarantee, redemption fine with penalty under section 112 of the Customs Act was also imposed. 2. Customs Appeal No s. 50165 of 2021, 50166 of 2021 and 50197 of 2021 have also been filed by M/s. Roots Network LLP, M/s. Insat Export Pvt. Ltd. and M/s. Kesari Jewellers Marketing, respectively, to assail similar orders passed by the Principal Commissioner. 3. The details of the Bills of Entry and the demand made in the aforesaid four appeals are as follows: Customs Appeal No. 50192 of 2021 SN. BoE No. and Date Value (₹) Total Differential Duty (₹) Provisionally Assessed 1. 2628451 dated 28.07.2017 4,01,17,565 42,56,072 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2820911 dated 11.08.2017 6,98,22,425 74,07,461 10. 2820936 dated 11.08.2017 5,38,07,932 57,08,484 11,56,68,388 Total Demand Details (A) Grand Total 1,09,02,85,492 11,56,68,388 (B) Redemption Fine Imposed against Provisionally Assessed BoEs [u/s. 125] 12,00,00,000 (C) Penalty Imposed [u/s. 112] 1,15,00,000/- Customs Appeal No. 50192 of 2021 SN. BoE No. and Date Value (₹) Total Differential Duty (₹) Provisionally Assessed 1. 2416573 dated 12.07.2017 8,55,77,887 90,78,958 2. 2447817 dated 14.07.2017 9,27,52,980 98, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27.07.2017 10,82,59,025 1,14,85,200 5. 2622542 dated 27.07.2017 12,17,77,903 1,29,19,418 6. 2638220 dated 28.07.2017 12,19,49,799 1,29,37,654 7. 2652361 dated 29.07.2017 10,81,02,814 1,14,68,628 7,15,63,054 Finally Assessed 8. 2685522 dated 01.08.2017 23,29,20,566 2,47,10,543 9. 2699884 dated 02.08.2017 20,45,08,127 2,16,96,267 10. 2714101 dated 03.08.2017 13,74,82,447 1,45,85,513 11. 2772714 dated 08.08.2017 13,60,82,502 1,44,36,993 12. 2772714 dated 08.08.2017 20,44,09,211 2,16,85,773 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bills of Entry, ABANS have themselves declared the said goods as gold coins (other than legal tenders) and have classified the said goods under CTH 7114 19 10 whereas this heading covers articles of gold . ****** 45. ****** I examine the two competing tariff entries of CTH 7114 and CTH 7118 of the First Schedule of the CTA. The relevant extract of the said two entries read as under. ****** 46. From the above, I find that heading 7118 covers coin of any metal. In the impugned case, goods are declared as coin, not being legal tender. The goods being coin are squarely covered under CTH 7118 as the terms of the CTH 7118 under the CTA is COIN while the entry in CTH 7114 is in the nature of residuary items . Hence by application of the GIR 1, impugned goods merit classification under CTH 7118, provided it is not guided otherwise by Section Note for Section XIV and Chapter Note for Chapter 71 of the CTA which are relevant in this case. I do not find anything in the said Section Notes and Chapter Notes that excludes GOLD COIN from the CTH 7118. I also do not find any heading or sub-heading in Chapter 71 of the CTA or for that matter in any Chapter which has specific entry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It has not explicitly excluded gold coins, not being legal tender. Therefore, I find that impugned goods which are gold coin, not being legal tender are not explicitly excluded from heading 7418 by the Explanatory Notes since they are made in similar fashion as specified in Explanatory Notes. Therefore, impugned goods merit classification under heading 7118 of the CTA. 57. Even otherwise, it is of paramount importance to point out here that in Khandwala's case, the Hon'ble High Court of Delhi has already clarified that all gold coins are classifiable under CTH 7118 9000 and has very clearly held that there can be no question of classifying the gold coins under CTH 7114 1910. ****** Accordingly, the view of the department stands fortified from the above position of law which leaves no scope for any deliberation with regard to classification of all gold coins irrespective of their being legal tenders or otherwise, the main argument put forth by ABANS that the goods imported by them were not gold coins as the same are not legal tenders of any country stands nullified. The undisputed fact which they cannot deny is that the goods imported by them are made up of gol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not specify as to which RBI Guidelines were to be followed and which have not been followed by them; that the entire allegation in this regard is based on the assumption that the RBI has issued guidelines stating that only nominated agencies can import Gold Coin, however, no such guidelines are available in the public domain. 75. I do not agree with the above contention of ABANS simply because of the fact that the goods in question are classifiable under CTH 7118 9000 and as discussed hereinabove, because DGFT'S Office Memorandum No. 01/89/180/36/AM-11/PC-II(A) dated 06.09.2017 has been upheld by Hon'ble High Court, it becomes clear that import of gold coins are subject to RBI guidelines. Here it is pertinent to mention that RBI and DGFT clearly say that apart from the authorized Banks and Nominated Agencies i.e. agencies nominated by DGFT, Banks authorized by RBI and Star and Premier Trading Houses, other entities are not permitted to import gold coins (as well as medallions). Hence, once it is upheld by the Hon'ble High Court, in the Khandwala's case, that the import of goods falling under CTH 7118 9000 will be regulated by the RBI guidelines, any contrar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the appellant which mentions that the goods are classifiable under CTH 7114 cannot be considered to be a valid document. 9. Shri Tarun Gulati, learned senior counsel assisted by Shri Kishore Kunal, Shri Manish Rastogi and Ms. Kanak Grover made the following submissions to assail the orders passed by the Principal Commissioner: (i) The correct classification of the imported goods is CTI 7114 19 10 and not CTI 7118 90 00 and in this connection reliance has been placed on the HSN Explanatory Notes that provide the scope and ambit of CTH 7118; (ii) CTH 7118 10 would cover coins which are not legal tender and CTH 7118 90 would cover coins which are legal tender. Thus, the goods imported by the appellant, which are not legal tender, cannot fall under CTI 7118 90 00; (iii) The presumption drawn in the impugned order that all coins are covered under CTH 7118 is incorrect; (iv) Even by application of the General Rules of Interpretation [ GRI ], the imported goods would not be classifiable under CTI 7118 90 00 in view of the Explanatory Notes to HSN for CTH 7118; (v) CTH 7114 covers articles of gold . The goods imported by the appellants are articles of gold whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt relating to foreign exchange or foreign security; and (xvii) Confiscation is not sustainable nor penalty can be imposed under section 112(a) of the Customs Act. 10. Shri Rakesh Kumar and Shri Sunil Kumar, learned authorized representatives appearing for the Department, however, supported the impugned orders and made the following submissions: (i) The impugned orders are based on a correct interpretation of judgment of the Delhi High Court in Khandwala Enterprise; (ii) The Country of Origin Certificates are not binding on the customs authority; (iii) The goods being coin are squarely covered under HSN 7118, while HSN 7114 are in the nature of residuary items. Thus, by applying GRI-1, the impugned goods merit classification under CTH 7118 and Chapter Notes and Section Notes also do not exclude gold coins from CTH 7118; (iv) The attempt by the appellant to derive benefit from the definition of coin in the Coinage Act, 2011 is not correct; (v) All gold coins, whether or not legal tender, are elements of sub- heading 711890; and (vi) Once the DGFT clarified that all the subject goods shall be classified under CTI 7118 90 00 as per the clarification d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... responding entry in column (4) of the aforesaid Table: Provided that the importer proves to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, that the goods in respect of which the benefit of this exemption is claimed are of the origin of Republic of Korea, in accordance with the provisions of the Customs Tariff (Determination of Origin of Goods under the Preferential Trade Agreement between the Government of the Republic of India and the Republic of Korea) Rules, 2009, published in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 187/2009-Customs (N.T.), dated the 31st December, 2009. 2. This notification shall come into force with effect from 1st January, 2010. S. No. Chapter, Heading, Sub-heading or Tariff Item Description of goods Rate (in percentage unless otherwise specified) 526 711021 to 711890 All Goods 0.94 15. The aforesaid notification dated 31.12.2009 was amended by notification dated 31.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese usually fall in heading 71.13, 71.14 or 71.17 or heading 83.06 (see corresponding Explanatory Notes). (b) Coins mounted in brooches, tie-pins or other objects of personal adornment (heading 71.13 or 71.17). (c) Broken, cut or battered coins of a kind usable only as scrap or waste metal. Subheading Explanatory Note. Subheading 7118.10. This subheading includes: (1) Coins which were legal tender but have been withdrawn from circulation. (2) Coins struck in one country to be put into circulation in another country; at the time of crossing frontier, they are not yet issued as legal tender by the competent authority. (emphasis supplied) 19. The central excise tariff is broadly based on the system of classification derived from the International Convention called The Brussels Convention on the Harmonised Commodity Description and Coding System (HSN) with necessary modifications. In this connection, it will useful to reproduce the Statement of Objects and Reasons of the Central Excise Tariff Bill, 1985 which led to the enactment of the Central Excise Tariff Act, 1985. It is indicative of the pattern of the structure of the Central Excise Tari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove objects. 20. The Supreme Court in Collector of Central Excise, Shillong vs. Wood Craft Products Ltd. [ 1995 (77) E.L.T. 23 (S.C.) ] noted that for resolving any dispute relating to tariff classification, a safe guide is the internationally accepted nomenclature emerging from HSN and the relevant portion of the judgment is reproduced below: 12. It is significant, as expressly stated, in the Statement of Objects and Reasons, that the Central Excise Tariffs are based on the HSN and the internationally accepted nomenclature was taken into account to reduce disputes on account of tariff classification . Accordingly, for resolving any dispute relating to tariff classification, a safe guide is the internationally accepted nomenclature emerging from the HSN. This being the expressly acknowledged basis of the structure of Central Excise Tariff in the Act and the tariff classification made therein, in case of any doubt the HSN is a safe guide for ascertaining the true meaning of any expression used in the Act. The ISI Glossary of Terms has a different purpose and, therefore, the specific purpose of tariff classification for which the internationally accepted nomenclature in H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the country of issue: and b) Coins which are no longer legal tender or intended to be legal tender. 25. The notification dated 17.02.1986 issued by the Ministry of Finance also granted customs duty exemption to goods falling under CTH 7118 90 and described as current coin of the Government of India . The relevant portion of the notification is reproduced below: Notification: dated 17-Feb-1986 Pearl, precious metals and coins In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in column (3) of the Table hereto annexed and falling under the heading No. or sub-heading No. of the First Schedule to the Customs Tariff Act 1975 (51 of 1975), specified in column (2) thereof, when imported into India, from so much of that portion of the duty of customs leviable thereon which is specified in the said First Schedule as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table. TABLE Sl. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and have images of gods, saints, temples or historical sites. These articles are struck in the form of a coin and are not or were not intended to be legal tender and infact are more akin to medals or medallions and were loosely described as gold coins. It is not in dispute that the appellant had described the goods in the Bills of Entry as gold coins which are not legal tender. These have not been struck by any National Issuing Authority and are not legal tender. The Explanatory Notes to heading 71.14 of HSN clarify the tariff text other articles for domestic or similar use as including medals and medallions. Medals and medallions referred to in the Explanatory Notes share similar characteristics of commemorative coins in so far as they are for decorative or ornamental use. The goods, therefore, deserve to be classified along with medal and medallions or decorative ornaments under CTI 7114 19 10. 31. It would be useful to refer to the US Cross Ruling on headings 7118 and 7114 of HSN in Ruling HQ H266605 dated 09.04.2018 as available on customs ruling online search system (CROSS) on U.S. Customs and Border Protection. This pertains to the tariff clarification in the Harmonized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to memorialize a certain event or milestone. They are unlikely to be hoarded to build wealth or maintain oneself in a downward economy. As such, the subject coins are classified alongside medals and medallions, or decorative ornaments, and are properly classified in heading 7114, HTSUS, as an article of goldsmiths wares. ******** HOLDING By application of GRI 1, the subject Valcambi Suisse Minted Gold Round Bar and the New Zealand 1 oz. Gold Kiwi commemorative coins are classified in heading 7114, HTSUS. They are specifically provided for in subheading 7114.19.00, HTSUS, which provides for, Articles of goldsmiths or silversmiths wares and parts thereof, of precious metal or of metal clad with precious metal: Of other precious metal whether or not plated or clad with precious metal. The column one general rate of duty is 7.9% ad valorem. (emphasis supplied) 32. It is for this reason that the appellant had classified the goods under CTI 7114 19 10 and cleared the same on NIL BCD in terms of the notification dated 31.12.2009 on production of Country of Origin Certificate. 33. One such Country of Origin Certificate issued by the Republic of Korea is rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /////////////////////////// 12. Declaration by the exporter The undersigned hereby declares that the above details and statement are correct; that all goods were produced in THE REPUBLIC OF KOREA and that they comply with the origin requirements specified for these goods in the KOREA-INDIA Comprehensive Economic Partnership Agreement for the goods exported to INDIA Seoul, South Korea, 2017.07.27 Place and date, signature of authorised signatory 13. Certification It is hereby certified, on the basis of control carried out, that the declaration by the exporter is correct. Seal Eo Eun Sil 2017.07.27 INCHEON MAIN CUSTOMS REPUBLIC OF KOREA Place and date, signature and stamp of issuing authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Parties. Article 2.11: Tariff Classification For the purposes of this Chapter and Chapter Three (Rules of Origin), the basis for tariff classification would be the HS. 37. As noticed above, it is pursuant to the aforesaid Agreement that the Customs Tariff (Determination of Origin of Goods under the Preferential Trade Agreement between Governments of the Republic of India and the Republic of Korea) Rules 2009 were framed and the notification dated 31.12.2009 was issued. Infact, the notification dated 31.12.2009 specifically refers to the Agreement and the 2009 Rules. 38. At this stage, it also needs to be noticed that the Commissioner of Customs addressed a letter dated 14.09.2017 to CBEC pointing out that gold coins (other than legal tender) are excluded from CTH 7118 as per the Explanation to HSN Notes and are covered under CTH 7114. It further mentions that there was no bar till 24.08.2017 on the import of such gold coins. The relevant portion of this letter is reproduced below: 4. In this context, it is stated that gold coins other than legal tenders are excluded from CTH 7118 as per explanation provided in HSN Explanatory Notes (copy enclosed) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the four appeals are prior to 25.08.2017. 41. This apart, the foreign supplier has also issued a certificate to Insat Exports Pvt. Ltd. certifying as follows: FINE TECHNIX CO., LTD. TO WHOSOEVER IT MAY CONCERN I, Lee Jae Kyu, am the Authorized Signatory of Fine Technix Co. Ltd., ( Company ) having office at Anyang-si, Gyeonggi-do, South Korea. During July August, 2017 the Company had exported round shaped articles of gold to Insat Exports Private Limited in India which were of South Korean Origin. The details of Commercial Invoices issued are as follows:- S.NO. Inovice No. Date 1. FTXG20170720 20 July 2017 2. FTXG20170807-2 07 Aug 2017 In this regard, it is certified that the exported goods are Articles of Gold which are round in shape. These goods are not or were never legal tender and been described in the export invoices Gold Coin (other than legal tender). It is clarified that these goods are only struck in the form of a coin and the precise description of these goods is gold articles that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... producing Country, the point to be checked is whether the exported gold articles from Korea are complying with the origin criteria of Product Specific Rules of Origin under India-Korea CEPA. It may so happen that gold coins are being imported into Korea only for export purpose without any conversion facility. This is the right time for India to undertake a physical verification exercise (of manufacturing facility/premises) in coordination with our counterpart in Korea. 4. Further, as it has been observed that consignments of gold coins are being imported under HS: 7114 from South Korea, whereas the gold coins are classified under HS: 71189000 subject to RBI guidelines. This aspect may also be examined while dealing with these consignments. In case, you find any mis-declaration, you may take appropriate action against the importer under the Customs Act. This issues with the approval of DGFT. 47. The communication dated 13.09.2017 addressed by the Reserve Bank of India to the office of the Principal Commissioner of Customs regarding the import of gold medallions is reproduced below: 2. We wish to advise that import of gold is governed by the provisions of Foreign T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter, states that only nominated agencies can import gold coins or gold in primary forms. They have also categorically stated that other than the notified agencies/banks/Star Premier Trading houses, import of gold coins and medallions is not permitted. 4. In view of the above, it appears that the issue of classification and eligibility of the entities who imported gold coins during the period 1st July to 25th Aug 2017 under India- Korea FTA requires action in terms of Foreign Trade Policy. 5. This issues with the approval of the Board. 49. Before adverting to the decision Delhi High Court in Khandwala, it would be useful to refer to the two decisions of the Hyderabad and Bangalore Benches of the Tribunal in Sri Exports vs. Commissioner of Customs, Hyderabad [ 2019 (365) E.L.T. 934 (Tri-Hyd) ] and Sri Exports vs. Commissioner of Customs, Bangalore [ 2019 (368) E.L.T. 985 (Tri-Bang) ]. 50. In Sri Exports, the Hyderabad Bench of the Tribunal on 27.11.2018 noticed that the Revenue had taken a stand that import of gold granules was permitted only through a nominated bank subject to RBI Regulations and so the appellant could not have imported gold granules since it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old imported, duty free, by the nominated agencies, in terms of the above notifications but do not impose any prohibitions/restrictions on the import of gold by others, on payment of appropriate Customs duty and the appellants have never claimed the benefit of the said exemption, as they are not nominated agency, specified in the FTP/Notification/Circular. Therefore, the Ld. Commissioner (Appeals) holding that, in terms of the said circulars, appellant was prohibited from importing gold is farfetched and without any legal basis. 51. In the decision of the Bangalore Tribunal rendered on 30.04.2019 in Sri Exports, the Department had rejected the claim of the appellant that gold medallion would fall under CTI 7114 19 10 for the reason that the appellant was not a nominated bank or a nominated agency or a holder of a status of star/premier trading house. According to the Department, in view of the Reserve Bank of India Regulations only a nominated bank or a nominated agency notified by DGFT is permitted to import the said goods. This view of the Department was not accepted by the Tribunal and following the decision of the Hyderabad Tribunal in Sri Exports, gold medallions were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in that the order passed by the Tribunal is not legal and proper and, therefore, the Board decided to file an appeal. It further states that similar consignment may be dealt with in terms of the Foreign Trade Policy and Boards decision. The said Circular dated 31.05.2019 is reproduced below: Attention is invited to two CESTAT Judgments Sri Exports versus Commissioner of Customs, Hyderabad (Final Order No. A/31/194/2018, dated 22.11.2018 in Appeal No. C/30812/2018) and Sri Exports Versus C.C. Bangalore-Cus [arising out of No. 344/2018 dated 12.10.2018 passed by Commissioner of Customs, Bangalore-I] respectively. In the said orders passed by the Hyderabad and Bangalore benches of CESTAT, import of Gold granules has been allowed to be imported by an importer not being a nominated agency/bank/star house etc. The said CESTAT orders have been examined in the Board. It is observed that the said orders are not legal and proper. Therefore, the Board has taken a decision that the said orders should be appealed against. Customs authorities at Hyderabad and Bangalore have been requested to take necessary action. It is therefore, requested that any similar consignments pending clearan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imposed subsequently on 18-12-2019 by the DGFT by way of Notification. Thus, when gold medallions and gold granules were imported, they were freely importable and the same was brought under the restricted category subsequently. (emphasis supplied) 54. The Office Memorandum dated 06.09.2017, the Office Memorandum dated 16.02.2018, the Circular dated 31.05.2019 issued by the CBEC were challenged before the Delhi High Court in Khandwala. The Revenue alleged that the gold coins imported by the petitioner were appropriately classifiable under CTI 7118 90 00 and not CTI 7114 19 10. It needs to be noted that the Delhi High Court did not go into the merits of the show cause notices. 55. Regarding the Circular dated 31.05.2019 issued by CBEC, the Delhi High Court observed as follows: 29. It was, therefore, completely impermissible for the C.B.I. C. to, in the impugned Circular dated 31st March, 2019, direct field formations to deal with consignments pending clearance at airports in accordance with the view of the C.B.I. C., rather than the orders of the Tribunal in Sri Exports v. Commissioner of Customs, Hyderabad (Final Order No. A/31/194/2018, dated 22-11- 2018 [20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, require the import thereof to be compliant with RBI guidelines. 49. Para 4 of the aforesaid Office Memorandum, dated 6th September, 2017, issued by the DGFT, merely states that gold coins are classifiable under Heading 7118 90 00 of the ITC (HS), whereas consignments of gold coins were being imported by wrongly classifying them under Heading 7114. Headings 7114 and 7118 of the ITC (HS) are completely aligned with the corresponding entries in the Tariff. A comparison of sub- headings 7114 and 7118 of the Tariff [or of the ITC (HS)] clearly reveals that, whereas sub-heading 7114 19 10 of the Tariff [or of the ITC (HS)] deals with articles of gold , Heading 7118 90 00 covers all coins which do not come within sub-heading 7118 10 00, which deals with coins (other than gold coins) not being legal tender . All gold coins are, therefore, classifiable under sub-heading 7118 90 00, of the Tariff, as well as of the ITC (HS). It is well settled that where an item is covered by an entry specific thereto, it has to be classified under the said entry and resort to all other entries would , ex facie, stand proscribed. 50. Gold coins being specifically classified under sub- heading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iated in the said Office Memoranda, is correct, the extent to which the said position in law affects the cases of the petitioner, and of Mink, would have to be assessed, on their own merits, by the competent adjudicating authorities. (emphasis supplied) 57. Regarding the Office Memorandum dated 16.02.2018, the Delhi High Court observed as follows: 55. We are unable to sustain, to any extent whatsoever, the aforesaid Office Memorandum, dated 16th February, 2018, issued by the C.B.E. C. To us, it appears obvious that this Office Memorandum is a transparent attempt, on the part of the C.B.E. C., to shackle the impartial exercise, by the competent adjudicating authorities, of adjudication of the show cause notices issued to the petitioner and to Mink - and, quite possibly, to other similarly situated importers. When the issue of classification, and entitlement to exemption, of the gold coins, imported by the petitioner, and other similarly situated importers, is at large before competent adjudicating authorities, who are in seisin thereof, the C.B.E. C. was completely unjustified in issuing the Office Memorandum dated 16th February, 2018. The powers of the C.B.E. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irections contained therein, especially in para 4 thereof . The effect of the said Circular shall be read as limited to conveying of information, regarding the fact that Final Order No. A/31494/2018, dated 27th November, 2018, of the Hyderabad Bench of the Tribunal, in Appeal No. C/30812/2018, and the Final Order, passed by the Bangalore Bench of the Tribunal against Order-in-Original No. 344/2018, dated 12th October, 2018, passed by the Commissioner of Customs Bangalore-I, had been appealed against, and no more. The authorities, adjudicating the show cause notices impugned in these writ petitions would be required, independently, and uninfluenced by the Circular dated 9th September, 2019, to examine, for themselves, whether such appeals have, in fact, been filed and, if so, the effect of the orders passed therein. (ii) Para 8 of the impugned show cause notices, dated (a) 12th July, 2019/15th July, 2019, issued to the petitioner in W.P. (C) 9225/2019, (b) 28th June, 2019/19th July, 2019, issued to M/s. Mink Tradecom Pvt. Ltd., and (c) 5th July, 2019/9th July, 2019, issued to the petitioner in WP(C) 9230/2019, are quashed and set aside . The authorities, adjudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gold coins fall under CTI 7118 90 00 and, therefore, import would be subject to RBI Guidelines. Since it merely sets out the indisputable statutory provision, there is no reason to interfere with it. However, the manner in which an import item is described in the Bills of Entry is not necessarily conclusive regarding its classifiability and it is always open to an importer to contend that an item is not exactly conforming to the description contained in the Bills of Entry. Thus, the importer can establish before the adjudicating authority, by cogent and convincing evidence, that the goods imported by it are entitled to the benefit of exemption; and (iii) The Office Memorandum dated 16.02.2018 issued by the CBEC has been set aside since it interferes with the impartial exercise to be undertaken by the competent adjudicating authority while adjudicating the show cause notice. 60. A perusal of the order passed by the Principal Commissioner, however, shows that the judgment of the Delhi High Court in Khandwala has been completely mis-read. The Principal Commissioner in paragraph 57 held that Delhi High Court in Khandwala has clarified that all gold coins are classifiable under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notes. In terms of the Chapter and Section Notes read with the HSN Explanatory Notes, coins would be classifiable under CTH 7114 and CTH 7118 cannot be assumed to be the only entry with respect to classification of all coins . The imported goods were correctly classified under CTH 7114, in as much as non-legal tender coins cannot be classified under CTH 7118. 65. The Principal Commissioner erred in holding that coins are specifically described in CTH 7118 and accordingly, on application of rule 3 (a) of GRI, the imported goods merit classification under CTH 7118. Rule 3 (a) can only be applied where goods fall in two or more headings. However, where coins which are not legal tender are excluded from CTH 7118 in terms of HSN Explanatory Notes, the same cannot be included under CTH 7118 on application of rule 3 (a) of GRI. 66. It needs to be remembered that the burden of proof in classification matters is always on the Department, which has necessarily to place evidence on record to establish mis-declaration by an importer. The Department did not place any evidence on record to establish that the goods will fall in CTI 7118 90 00 and infact even the order passed by the Prin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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