TMI Blog2023 (11) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... rting to hold that all articles that may be ordinarily or loosely referred to as gold coins are liable to be classified as falling under CTH 7118 9000. To put it differently, when the Division Bench in Khandwala Enterprise observed that gold coins are liable to be classified under CTH 7118 9000, it did not mean or intend to hold that all articles of gold are liable to be classified as falling in that entry of the CTH merely because they happen to be in the shape of a coin or are colloquially referred to as such. CTH 7114 deals with articles of goldsmiths, silversmiths, wares and parts thereof. The aforesaid entry, namely, CTH 7114 1910 specifically speaks of articles of gold. It also brings within its ambit articles of silver and other precious metals. Both CTH 7118 1000 and CTH 7118 9000, on the other hand, are placed under the generic heading of Coins . While CTH 7118 1000 deals with coins [excluding those made of gold] and not being legal tender, CTH 7118 9000 is the residuary entry and encompasses all other coins. CTH 7118 9000 being the remanent receptacle would thus include within its ambit, even gold coins. Accordingly, while 7118 1000 relates to coins (not made of gold) whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Through: Mr. Tarun Gulati, Sr. Adv. with Mr. Kishore Kunal, Mr. Runjhun Pare, Advs. For the Respondents Through: Mr. Zoheb Hossain, Sr. SC with Mr. Vivek Gurnani, Adv. For CBIC. Mr. Anurag Ahluwalia, CGSC for UOI. JUDGMENT YASHWANT VARMA, J. 1. By way of the present writ petition, the petitioner questions the validity of the impugned orders dated 04 September 2020 and 07 September 2020 passed by the Principal Commissioner of Customs, the second respondent herein. By the impugned order the second respondent has rejected the classification of gold coins imported vide 27 Bills of Entry under CTH 7114 1910 as claimed by the petitioner and held that these goods are correctly classifiable under CTH 7118 9000 of the Customs Tariff Act, 1975. 2. The petitioner seeks to invoke the jurisdiction of this Court to assail the validity of the Order-in-Original notwithstanding the existence of a statutory remedy of appeal, primarily on the ground that the same is based on a wholly erroneous understanding and appreciation of the judgement dated 14 November 2019 which was rendered inter partes in W.P.(C) 9225/2019 titled as Khandwala Enterprise Private Limited vs. Union of India and Ors 2019:DHC:59 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecember 2016, extending the benefit of Nil Basic Customs Duty [BCD] to all goods falling under CTH 711021 to 711890 subject to the production of a certificate pertaining to the country of origin. The relevant parts of the aforesaid Notification are extracted hereinbelow: - Notification No. 152/2009-Customs dated 31.12.2009 Exemption of Customs duty on certain goods when imported into India from the Republic of Korea G.S.R.(E).- 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 goods of the description as specified in column (3) of the Table appended hereto and falling under the Chapter, Heading, Sub-heading or tariff item of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as specified in the corresponding entry in column (2) of the said Table, when imported into India from the Republic of Korea, from so much of the duty of customs leviable thereon as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the aforesaid Table: Provided that the importer pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inished form including ingots, bars, blocks slabs, billets, shots, pellets, rods, sheets, foils and wires. 8. On 18 February 2015, the Reserve Bank of India [RBI] issued A.P. (DIR Series) Circular No. 79 purporting to remove the prohibition on the import of gold coins and medallions. However, it becomes pertinent to note that the permission to import gold was extended only to certain identified agencies such as Nominated Banks, Star and Premier Trading Houses. RBI also proceeded to draw up Master Directions for Import on 01 January 2016, in terms of which the import of gold coins and medallions was proposed to be regulated. 9. In August 2017, the petitioner filed 27 Bills of Entry for clearance of goods declared as gold coins (other than legal tender) of different purity (99.5% and above) stated to have been imported from South Korea. The goods were classified by the petitioners as falling under CTH 7114 1910 and on the basis thereof, it claimed benefit of Nil rate of BCD in accordance with Serial No. 526 of the Customs Notification dated 31 December 2009 (as amended) and noticed hereinabove. 10. On 25 August 2017, the Department of Commerce issued a Notification No. 25/2015-2020 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0). Accordingly, shipments prior to 25.08.2017 may be considered for clearance by Customs. However, of late there has been an unprecedented surge in import of gold coins from South Korea under INDIA - Korea CEPA. Customs being the verifying agency for Rules of Origin (RoO) criteria of the imported goods, may like to examine these consignments of gold with due diligence to ensure that such imports have complied with the RoO under the Indo-Korea CEPA. 3. To further amplify the point, since Korea is not a gold 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence to her letter No. C. No. VII I/10/55/Gr. 1-4 BACC dated July 18, 2017 Sd/- Assistant Manager 13. Post the issuance of the notification dated 25 August 2017 issued by the Ministry of Commerce and the Office Memorandum dated 06 September 2017 emanating from the office of the DGFT, the respondents appear to have taken notice of the restrictions imposed on the import of gold coins. However, and significantly, the Commissioner of Customs (Imports) vide its letter dated 14 September 2017 addressed to the Central Board of Excise and Customs [CBEC] took the position that gold coins (other than legal tender), that is an article of gold struck in the form of a coin, would be covered under CTH 7114 and not CTH 7118. While arriving at that conclusion, the authority rested its view on CTH 7118 as framed along with the Harmonized System Nomenclature [HSN] explanatory notes accompanying the said entry. It ultimately came to conclude that such gold coins were free of all restrictions at least till 24 August 2017. The aforesaid communication is extracted hereinbelow: - OFFICE OF THE COMMISSIONER OF CUSTOMS (IMPORTS) NEW CUSTOM HOUSE, NEAR IGI AIRPORT, NEW DELHI 110037 C. No. VIII/12/Import/G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication. 14. On 16 February 2018 the CBEC issued an Office Memorandum stating that the classification of Gold Coins ought to be under CTH 7118 9000. The relevant portion of the Office Memorandum reads as: F.No: 20000/5/2015-OSD(ICD) Govt. of India Ministry of Finance Dept of Revenue Central Board of Excise Customs Room No. 227 A North Block, New Delhi Dated 16th Feb. 2018 Office Memorandum Subject: Classification of Gold Coins Kindly refer to the letter no. VIII/12/ACCI/Gr-Ill, IV, VI dated 6th December 2017 from Commissioner of Customs (Import) regarding the above subject. 2. In the Customs Tariff heading 7118 reads as follows: 7118 Coin 71181000 - Coin (other than gold coin), not being legal tender 10% 71189000 - - other 10% 2.1 Within this CTH, are included: (i) coins (other than gold coin) which are no longer legal tender - 7118 10 00 (ii) All remaining COINs (includes all legal tender, regardless of constituent material, and Gold Coins) -7118 90 00 Accordingly, the classification of GOLD COINS ought to have been under 7118 90 00. 3. Furthermore, the communication exchanged with RBI dated 13 th Sept. 2017 which has been enclosed with the subject letter, states that only nominat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation) Act, 1992 as held by the Hon'ble High Court of Bombay in the case of Riddi Siddhi Bullions Ltd. v. Commissioner [2016 (333) E.L.T. A174 (Bom.)]. Accordingly, in my considered view, gold granules are not prohibited goods within the meaning of Section 2(32) of Customs Act, 1962. 12. Further, the Customs Act, 1962 does not authorise C.B.E. C. to impose prohibitions by way of circulars, since as submitted supra, circular is not law. Therefore, the contention of the Learned Commissioner (Appeals) that the appellants are prohibited from importing gold granules, in terms of Circular No. 34/2013-Cus., dated 4-9-2013 and Circular No. 27/2016-Cus., dated 10-6-2016 is not legally sustainable. They are only clarificatory/procedural circulars, to give effect to the exemption contained in the above notifications, with special reference to disposal and monitoring of the gold 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, speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Gold are classifiable under CTH 71141910 and are freely importable and there is no restriction and in view of the decisions cited supra, Gold Medallion fall within the definition of Articles of Gold . Further, I find that the appellants have imported the Gold Medallion which is classified as Articles of Gold from Korea and vide Notification No. 152/2009 dated 31.12.2009 the BCD leviable on the import of Articles of Gold from Korea falling under Chapter 71141910 is Nil. Further, I find that CBEC Circular No. 27/2016-Cus. Dated 10.06.2016 relied upon by both the authorities is not applicable in the facts and the circumstances of this case because the appellant is not a Nominated Agency but it is only an individual importer who has imported gold against advance payment or Letter of Credit (not exceeding 90 days) for home consumption, wholesale and retail sales. Further, the Master Direction issued by the RBI is also not applicable in the present case because that instruction of the RBI only applies to Nominated Banks and Nominated Agencies as notified by DGFT. Further, I also note that in the present case, the importer has not imported gold on consignment basis and therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy/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 clearance at the ports/airports may be dealt in terms of the FTP 2015-2020 and the Board's decision above. Yours Sincerely Sd/- (Zubair Riaz) Director (Customs) 19. It is pertinent to note that the aforementioned circular was amended vide Circular dated 9 September 2019. The amending Circular issued by the CBIC is reproduced hereunder: F No. 45G/67/2019-Cus.IV. Government of India Ministry of Finance Department of Revenue (Central Board of Indirect Taxes Customs) Room 227B, North Block New Delhi, dated 9th September, 2019 To All Principal Chief Commissioners/Chief Commissioners of Customs/ Customs(Preventive) All Principal Chief Commissioners/Chief Commissioners of Customs Central Taxes All Principal Commissioners/Commissioners of Customs/Customs (Preventive) Subject: Import of Gold Granules b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the first writ petition and which would be evident from the following recital appearing in the judgment rendered by the Division Bench :- 2. The writ petition seeks quashing of (i) Office Memorandum, dated 16th February, 2018, issued by the Central Board of Excise and Customs (CBEC), (ii) Circular, dated 31st May, 2019, issued by the Central Board of Indirect Taxes and Customs (the CBEC, as rechristened after the advent of the GST regime, referred to, hereinafter, as the CBIC ), (iii) Office Memorandum, dated 6th September, 2017, issued by the Director General of Foreign Trade (DGFT), (iv) Show cause notice dated 15th July, 2019, issued to the petitioner by the Commissioner of Customs, ACC Import, New Delhi (hereinafter referred to as the Commissioner ), and (v) Show cause notice dated 19th July, 2019, issued to M/s. Mink Tradecom Private Limited (hereinafter referred to as Mink ) by the Commissioner. 21. The Court, upon noticing the provisions of the Foreign Trade Policy and by way of a preface to the challenge which stood raised, made the following pertinent observations in paragraphs 13, 14 and 15 of the judgment:- 13. According to the Revenue, the gold coins imported by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, in any case, every Customs or Central Excise Officer in the Government which is contrary to the law laid down by the Tribunal, is not only ex facie unsustainable, but is also contemptuous of the Tribunal. The following well-known passages, from the judgment of the Supreme Court in U.O.I. v. Kamlakshi Finance Corporation Ltd.- 1991 (55) E.L.T. 433 (S.C.), merits reproduction, in this context: 5. The learned Additional Solicitor General, however, submits that the learned Judges have erred in passing severe strictures against the two Assistant Collectors who had dealt with the matter. He submitted that these officers had given reasons for classifying the goods under Heading 39.19 and not 85.46 and could do no more. He submitted that they acted bona fide in the interests of Revenue in not accepting a claim which, they felt, was not tenable. 6. Sri Reddy is perhaps right in saying that the officers were not actuated by any mala fides in passing the impugned orders. They perhaps genuinely felt that the claim of the assessee was not tenable and that, if it was accepted, the Revenue would suffer. But what Sri Reddy overlooks is that we are not concerned here with the correctness or oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gality or propriety, may direct such authority to apply to the Collector (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Collector of Central Excise in his order and there is a further right of appeal to the department. The position now, therefore, is that, if any order passed by an Assistant Collector or Collector is adverse to the interests of the Revenue, the immediately higher administrative authority has the power to have the matter satisfactorily resolved by taking up the issue to the Appellate Collector or the Appellate Tribunal as the case may be. In the light of these amended provisions, there can be no justification for any Assistant Collector or Collector refusing to follow the order of the Appellate Collector or the Appellate Tribunal, as the case may be, even where he may have some reservations on its correctness. He has to follow the order of the higher appellate authority. This may instantly cause some prejudice to the Revenue but the remedy is also in the hands of the same officer. He has only to bring the matter to the notice of the Board or the Collector so as to enable appropriate proceedings being ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with consignments pending clearance at ports and airports involves a process of adjudication, and that it was not open to any such authority, dealing with such consignments, to act in violation of binding decisions of the Tribunal. The concluding paragraph of the impugned Circular dated 31st May, 2019, issued by the CBIC, in our view, flies directly in the face of the law, as laid down by the Supreme Court in Kamlakshi Finance Corporation Ltd. 23. Insofar as the challenge which was raised to the CBIC Circular of 9 September 2019 is concerned, the Court in Khandwala Enterprise observed as follows:- 38. Having said that, the CBIC may, quite legitimately, in exercise of the powers conferred on it by Section 151A of the Customs Act, issue circulars, or instructions, informing field formations of orders, passed by superior judicial authorities, if any, staying, setting aside, or otherwise interfering with orders passed by judicial authorities lower in the hierarchy, including the Tribunal. Indeed, this may be advisable, so that authorities, adjudicating similar cases would have, before them, the latest legal position, without having to spend time on research. Circulars issued in this r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as Sub-Heading 7114 1910 of the Tariff [or of the ITC(HS)] deals with articles of gold , Heading 7118 9000 covers all coins which do not come within sub-heading 7118 1000, which deals with coins (other than gold coins) not being legal tender. All gold coins are, therefore, classifiable under sub-heading 7118 9000, 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 7118 9000 of the Tariff as well as of the ITC (HS), there can be no question of classifying gold coins under sub-heading 7114 1910. 51. In stating, in para 4 of the impugned Office Memorandum dated 6th September, 2017, issued by the DGFT, that gold coins fall within Heading 7118 9000 of the ITC (HS), and that, therefore, their import would be subject to RBI guidelines, the CBEC merely sets out the indisputable statutory position. We find no reason to interfere therewith. 52. At the same time, it is also settled that the manner in which an import item is described in the Bs/E, is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his would be evident from paragraphs 55 and 56 of the judgment which are reproduced hereinbelow:- 55. We are unable to sustain, to any extent whatsoever, the aforesaid Office Memorandum, dated 16th February, 2018, issued by the CBEC. To us, it appears obvious that this Office Memorandum is a transparent attempt, on the part of the CBEC, 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 CBEC was completely unjustified in issuing the Office Memorandum dated 16th February, 2018. The powers of the CBEC, as conferred by Section 151A of the Customs Act, cannot extend to issuance of executive instructions, or Office Memoranda, pronouncing on the merits of issues which are pending before adjudicating authorities. Such an attempt would result in reducing the adjudicatory process to a mockery, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal 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 WP(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, adjudicating the said Show Cause Notices, would do so, uninfluenced by para 8 thereof, and keeping in view the directions/observations contained in this judgment. (iii) Office Memorandum No. 01/89/180/36/AM-11/PC-II(A), dated 6th September, 2017, issued by the DGFT, is upheld, to the extent of the position in law stated therein. However, the authority, adjudicating the Show Cause Notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Interpretation (hereinafter referred to as the GIR ). The GIR 1 provides that the classification of goods will be determined according to the terms of the headings of the First Schedule and any relative Section or Chapter Notes of the CTA. In the event that the goods cannot be classified solely on the basis of GIR 1, and if the headings or Chapter or Section Notes to the CTA do not require otherwise, the GIR 2 to the GIR 6 will then be applied in seriatim. Thus the GIR 1 is the foremost rule of classification of goods under the CTA, Which specifies the elements that can legally be used to classify products. For legal purposes classification is determined by the terms of the headings, the Section or Chapter Notes where relevant, and, If necessary and allowable, the other GIRs. Thus where the terms of the headings and any relevant Notes leave only one heading open for consideration, or they direct either the classification or the means of classification, then only the GIR 1 is used at heading level for classification of goods under the CTA. In this background, I examine the two competing tariff entries of CTH 7l14 and CTH 7118 of the First Schedule of the CTA. The relevant extract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot being legal tender whereas tariff item 7118 9000 of the CTA refers to coin other than coin of tariff item 7118 1000 of the CTA. In other words, tariff item 7118 9000 of the CTA covers all coins which are not covered under tariff item 7118 1000 of the CTA Further, I find that the antonyms of the phrase 'not being legal tender ' is being legal tender . The logical deduction from this is that tariff item 7118 90 of the CTA would include: (i) Coin (other than gold coin), being legal tender; (ii) Gold coin, not being legal tender; and (iii) Gold coin, being legal tender. Therefore, impugned goods declared as coin, made of gold of 99.5% purity, not being legal tender are to be classified under tariff item 7118 9000 of the CTA. 32. Proceeding to comment upon the purpose served by explanatory notes under the HSN, the Principal Commissioner has held as follows:- 51. I find that the Explanatory Notes to the Harmonised System (hereinafter referred as the HS ) are published separately by the WCO. While these notes do not form part of the legal provisions of the HS, it is important that they be consulted in case of any dispute of classification as they provide commentary on the inten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;ble CESTAT, Chennai Bench delivered in the case of ICICI Bank Ltd. vs. Commissioner of Customs (Airport-Cargo), Chennai reported at 2014 (312) ELT 366 (Tri. Chennai). In this case, the first appellant, namely, ICICI Bank Ltd. (''ICICIBL , in short), a commercial bank, imported 98 consignments of gold or silver medals during the period 01.04.2003 to 30.07.2007 and filed various Bills of Entry for clearing the consignments. The main dispute in the appeal filed by the two main appellants was the classification of the gold and silver medals imported. In this scenario, while examining the exemption under Notification No. 62/2004-Customs dated 12.05.2004 and thereafter examining the classification of gold and silver coins, the Hon'ble Tribunal has observed, in para 19 of the judgment, which is reproduced below, that: - ''19. It is clear from the explanation to the Notification and silver and the notification is issued with an understanding that these will fall under Chapter 71. However, there is lack of clarity as to the heading of Chapter 71 under which these goods will get classified. On going through the Customs Tariff and HSN explanatory Notes this issue does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or battered coins of a particular kind, which is also not the case here. I also find that coins to be covered under this heading must be made by stamping out blanks from sheet metal; then struck with the appropriate dies to produce simultaneously the designs on the two faces; I, therefore, find that heading 7118 covers: (i) coin (other than gold coin), not being legal tender; (ii) coin (other than gold coin), being legal tender; (iii) coin (other than gold coin), no longer being legal tender; (iv) gold coin, not being legal tender; (v) gold coin, being legal tender; and (vi) gold coin, no longer being legal tender, provided they are made by stamping out blanks from sheet metal; then struck ' with the appropriate dies to produce simultaneously the designs on the two faces. 34. Turning then to the judgment rendered in Khandwala Enterprise, the Principal Commissioner has observed thus:- 57. Even otherwise, it is of paramount importance to point out here that in response to the writ petition filed by MINK as the co-petitioner, the Hon'ble High Court of Delhi [2020 (371) ELT 50 (Del)] has already clarified that all gold coins are classifiable under CTH 7118 9000 and has very cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the findings that were returned in Khandwala Enterprise, that the Court had come to the definitive conclusion that gold coins were liable to be classified as falling under CTH 7118 9000. This Mr. Gurnani submitted in light of the conclusions as they stand recorded in paragraph 50 of the judgement in Khandwala Enterprise. 36. Having considered the rival submissions addressed, we find that the impugned order firstly fails to bear in mind the well settled precept of the essence of a decision or its ratio being gleaned and discerned from a comprehensive reading of the facts, the issues that arose and the conclusions that the court ultimately records. We have repeatedly cautioned against any and every observation appearing in a judgment being viewed as constituting the decision of the court. It is this aspect which appears to have been overlooked by the Principal Commissioner and has led the authority to erroneously hold that Paras 49 and 50 laid the dispute raised by the petitioner to rest. This would be further borne out from the discussion which follows. 37. It becomes pertinent to note that in Paras 49 and 50 of Khandwala Enterprise, the Court firstly noticed the distinction betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th precious metal This heading covers articles of goldsmiths or silversmiths wares as defined in Note 10 to this Chapter wholly or partly of precious metal or metal clad with precious metal. In general these goods are larger than articles of jewellery of heading 71.13; they include: (A) Articles of Tableware Such as table knives, carving sets, spoons, forks; ladles; poultry or meat grips; trays, plates, soup or vegetable dishes and bowls; sauce-boats; fruit dishes; sugar-bowls, coffeepots, teapots, tea or coffee cups; goblets; egg-cups, decanters; liqueur services; stands and baskets for bread, cake, fruit etc.; fishservers; cake servers; wine cooling buckets; cruets; sugar-tongs; knife-rests, serviette rings; table bells; ornamental stoppers, etc. (B) Toilet articles such as hand mirrors; bottles and powder boxes (Other than those of heading 71.13); brush boxes, clothes brushes, nail brushes, hair brushes, combs (other than dress combs and pocket combs heading 71.13); jugs, etc. Scent sprays are excluded (heading 96.16). (C) Office or desk equipment such as ink-pots, ink-stands, book-ends, paperweights, paper-knives. (D) Smokers requisites such as cigar or cigarette boxes, tobacco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y prescribed weight and design, issued under government control for use as legal tender. Consignments of individual coins or of sets of coins which are legal tender in the country of issue are classified in this heading even if they are put up for general sale in presentation cases. The heading includes coin which is no longer legal tender but it excludes collectors pieces (see Explanatory Note to heading 97.05). Coins are made by stamping out blanks from sheet metal; these are then struck with the appropriate dies to produce simultaneously the designs on the two faces. The heading Does not cover: (a) Medals even if struck in the same way as coins; these 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 usably only as scrap or waster 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 cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter of legal tender. 43. Thus, unless an article is found to have been issued in exercise of sovereign authority for the purposes of current or future use as legal tender or one which in the past constituted the basis for money transactions, it would not be a coin which would fall within the ambit of CTH 7118 1000 or 7118 9000. 44. In Khandwala Enterprise, the Court clearly appears to have referred to gold coins as falling in CTH 7118 9000 proceeding on the premise that they were articles which were or are proposed to be used as legal tender. This Court is thus of the firm opinion that the observations as appearing in Paras 49 and 50 have been clearly misinterpreted by the respondents as the Court having held or purporting to hold that all articles of gold which may be colloquially referred to as coins would be liable to be placed under CTH 7118 9000. 45. The respondents also appear to have been unjustifiably swayed and influenced by the observation in Khandwala Enterprise that once gold coins have been specifically classified to fall under CTH 7118 9000, there would be no question of them being placed under CTH 7114 1000. We find that the aforesaid observation has clearly been rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brella of CTH 7118 1000 or 7118 9000. 49. We also bear in mind the caveat which was entered by the Court in Khandwala Enterprise when it observed that the issue of whether the articles imported by the petitioner were liable to be understood as answering the description of gold coins as contemplated under CTH 7118 9000 was specifically left open for due consideration of the respondents. We are thus of the firm opinion that the Principal Commissioner has clearly erred in proceeding on the premise that the said issue stood answered against the petitioners. 50. We also find ourselves unable to appreciate the stand taken by the Principal Commissioner when it holds that explanatory notes may be consulted in case of a dispute with respect to classification. The aforesaid finding clearly ignores the unequivocal conclusions to the contrary recorded by the Court in Khandwala Enterprise when it had observed that explanatory notes are of a binding character. The aforesaid conclusion also runs contrary to the well settled legal position in this regard. While the purpose and import of explanatory notes is no longer res integra, we deem it apposite to extract the following passages from the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or while viewing the judgment rendered in Khandwala Enterprise and proceeding on the assumption that the contentions raised by the petitioner already stood conclusively answered by the Court. The aforesaid premise is clearly based on an incorrect reading of that decision. The Principal Commissioner has also clearly erred in failing to appreciate the import of the explanatory notes which stand placed along with CTH 7118 9000 and ignoring the binding character of those notes. 53. While ordinarily we would have left the petitioner to assail the Order-in-Original by following the route of a statutory appeal, we were constrained to entertain the present writ petition and overrule the preliminary objection that was taken by Mr. Gurnani, in light of the conclusions which were recorded by the Principal Commissioner in Para 57 of the impugned order as well as the view that the authority has expressed with regard to explanatory notes which accompany entries in the Tariff. 54. In our considered opinion, the Principal Commissioner would thus be obliged to decide the SCN proceedings afresh bearing in mind the observations rendered hereinabove. We consequently leave it open to the said authority ..... X X X X Extracts X X X X X X X X Extracts X X X X
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