By TIOL News Service

NEW DELHI, FEB 10, 2017: THE appellants imported "Gold Findings" claiming exemption under Notification No.12/2012-Cus dated 17.3.2012, as amended (Sl.No.323). The said entry exempts customs duty in excess of 10% adv. leviable, among other things, on "Gold Findings" when imported into India.

The said entry in the notification had an Explanation, which stated that for the purpose of this entry, "Gold Findings" means a small component such as hook, clasp, clamp, pin, catch, screw back used to hold the whole or a part of a piece of jewellery in place. The case of the Revenue is that the appellants imported "Gold Findings" availing the said concessional rate of duty and sold the same as such to the domestic traders and had not used them for intended purpose .

The concession was denied by the Original Authority and the customs duty demands of Rs. 4,20,35,524/-, Rs. 36,64,852/- and Rs. 26,84,410/- was confirmed along with equal amount of penalties. Penalty of Rs.10 lakhs was also imposed on the Director(s).

Before the CESTAT, the appellant submitted that since notification does not provide for any condition of particular usage of the imported items, there is no legal authority for the Department to deny the concessional rate as stipulated in the notification.

The Bench observed –

+ The product imported is "Gold Findings" and the same has been assessed as such for customs clearance. The notification fixing 10% rate of duty did not provide for any condition to be fulfilled. The impugned order also records clearly that there is no "actual user" condition in the notification.

+ In absence of any condition in the notification for the concessional rate of duty, an attempt by the Original Authority, to add a specific condition allegedly to guard against the purported misuse of the intended benefit, is legally untenable.

+ In the absence of any post-import condition, the ultimate usage and consumption of the imported goods after their clearance is not in the domain of assessing officer, in absence of any such stipulation in the notification itself.

+ The Original Authority, without basis of any statutory requirements, made observations of general nature and denied the exemption. The quantum of import is of no criteria and it is not for the Original Authority to decide the reasonable norm of such quantity and also to follow up the trail of further disposal of the imported goods.

+ The findings and the reasoning adopted by the Original Authority is clearly beyond the scope of provisions of the above said notification and as such, cannot be legally sustained. The Adjudicating Authority cannot add additional conditions in the statutory provisions when there is no condition prescribed at all in the law. There is no bar on trading and neither there is a post-import condition for any specific type of use.

Holding that the impugned order is legally unsustainable, the same was set aside and the appeals were allowed.

(See 2017-TIOL-383-CESTAT-DEL)