CESTAT set aside the order increasing value of imported goods due to classification dispute as drawback was available
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- Last Updated on 7 December, 2021
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Case Details: J.B. and Brothers Pvt. Ltd. Vs Commissioner of Customs, Mumbai - [2021] 133 taxmann.com 50 (Mumbai - CESTAT)
Judiciary and Counsel Details
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- Ajay Sharma, Judicial Member and C.J. Mathew, Technical Member
- A.K. Prabhakar, Adv. for the Appellant.
- Manoj Kumar, Deputy Commissioner (AR) for the Respondent.
Facts of the Case
The appellant filed bill of entries before the custom authorities declaring that it has imported ‘rough diamonds’ classifiable under Tariff heading 7102 3100 (Unworked or simply sawn, cleaved or bruted) attracting ‘Nil’ rate of duty. The appellant exported the stones after final cutting and polishing of said diamonds, thereby being eligible to the drawback of any duty paid on import.
The authorities re-classified the imported goods as ‘cut and polished diamonds’ under Tariff heading 7102 3910 (Diamond, cut or otherwise worked but not mounted or set) that attracts duty of 2%. Further, the authorities has also increased the value as per Rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.
In respect of classification, few reports by Gemological Institute of India (GII) and GIA India Pvt Ltd. (based on the samples collected) were submitted that the impugned goods cannot be classified as Rough Diamonds.
CESTAT Held
The CESTAT noted that the impugned goods may not be ‘rough diamonds’ and may have undergone working before import. However, the reports do not conclusively establish that these were ‘cut and polished diamonds’.
Based on the above, the CESTAT set aside the order of Commissioner of Customs due to lack of the evidence to classify it as rough diamonds. It was also held that since the exports of goods were ultimately eligible for drawback, it cannot be held that the appellant intend to evade duty of only differential amount by declaring wrong details in bill of entry.
List of Cases Referred to
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- Surbhit Impex (P.) Ltd. v. Commissioner of Customs (EP) 2012 (283) E.L.T. 556 (Trib. – Mum.) (para 3)
- Bata India Ltd. v. Commissioner of Customs 2008 taxmann.com 952 (Chennai – CESTAT) (para 3)
- Commissioner of Customs v. Mahalaxmi Gems 2008 (231) E.L.T. 198 (SC) (para 3).
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