Judgment:
1. In this Revenue appeal the question that requires consideration is whether "King Sovereign" imported by the respondents herein were classifiable under Heading 7118.90 or not. Relevant facts are : M/s.
L.N. Gadodia and Sons (P) Ltd., Delhi, respondents herein, filed a Bill of Entry dated 3-10-1994 for clearance of 100 pcs of "King Sovereign" (Gold Coins) of 22 carat purity each weighing 8 gms and collectively 800 gms having assessable value of Rs. 3,34,280/-. They classified the goods under Customs Tariff Heading 7118.90 and sought clearance thereof against the Special Import Licence (SIL) issued in terms of ITC Public Notice No. 64 (PN) 1992-97 dated 21-10-1992 and Public Notice No. 120 (PN) 1992-97 dated 31-3-1993 claiming the benefit of Notification No.117/94-Cus. and declared on the Bill of Entry that duty shall be paid in convertible foreign currency out of the "Exchange Earnings, Foreign Currency Account". Customs authorities found that EXIM Policy 1992-97 allows the import of gold under Special Import Licence for items listed in Appendix XXXV at serial No. 59 of the Hand Book of Procedures and subsequent ITC public notices issued thereunder, i.e., Public Notice Nos. 64 and 120 of the Hand Book of procedures which allowed import of only "gold" and not "gold in any form" or "gold coins". Accordingly, Additional Collector of Customs adjudicated the matter and in his order-in-original dated 27-4-1995, confiscated the goods under Section lll(m) of the Customs Act, 1962 for importation of the impugned goods in contravention of the Export Import Policy 1992-97. However, an option to redeem the confiscated goods was given to the importers on payment of fine of Rs. 1,75,000/-and a personal penalty of Rs. 50,000/- under Section 112 of the Act. The concession claim under Notification 117/94 was also turn down by the Additional Collector. The present Respondents filed appeal before the Commissioner of Customs (Appeals) wherein they contended that gold coins in question were imported by them under Notification No. 117/94-Cus., dated 27-4-1994 read with Public Notification 120 dated 31-3-1993. They also claimed that Notification No. 117/94 exempted goods of the description specified in the table annexed thereto and under Chapter 71 of the Customs Tariff Act from the duty as specified, provided the goods were covered by SIL issued in terms of EXIM Policy 1992-97. They also contended that Public Notice 120 indicated the categories of exporters to whom Special Import Licence were issued and the annexure to the said public notice listed items which were allowed under SIL and SI. No. 1 thereof covered "gold". They further contended that on receipt of notice from Assistant Collector they had clarified that the impugned coins were neither antiques nor were they currency in circulation and that the Reserve Bank of India had clarified to the Ministry of Finance that import of gold coins against SIL was valid. They also brought to the notice of the adjudicating authority that gold coins were being imported by MMTC under the SIL on payment of duty. Collector (Appeals) by his order dated 31-8-1995 reversed the order-in-original and held that gold coins were permissible to import under the cover of SIL and were eligible to avail of the benefit of Customs Notification No. 117/94, dated 27-4-1994 and set aside the Additional Collector's order of confiscation and levy of penalty. In the impugned order the Collector (Appeals) held that in the absence of any definition of "gold' in the EXIM Policy, it was relevant to refer to the definition of "gold" in the predecessor legislation to the new EXIM Policy, namely, the Foreign Exchange Regulation Act wherein gold has been referred to include bullion indicates coins and jewellery made wholly [and] mainly of gold.Before the announcement of the EXIM Policy 1992-97 import and export of gold were restricted under the provisions of the FERA. Because of their special characteristics gold and silver have always been treated on .a different footing than other metals and gold coins have traditionally been included in the term "gold". Collector (Appeals) further held that for all purposes gold coins and gold biscuits were considered to be coming within the general description of the gold and in the absence of any evidence to establish that the intention was to restrict gold to primary gold or to gold of 24 carat purity, it would not be sound to argue that the word 'gold' without any clarifying word implied exclusion of gold coins. Collector (Appeals) drew further support for this finding from the fact that exemption Notification No. 117/94 granted exemption to gold and silver falling within Chapter 71 of the First Schedule to the Customs Tariff Act, 1975 and did not make any distinction between the separate sub-headings of Chapter 72 though the said notification was issued only on 27-4-1994. The fact that the exemption was granted by the said notification to gold and silver falling within Chapter 71 without indicating any distinction between different sub-headings, indicated that the word 'gold' in the SIL was perceived in the broader context as 'gold' in any form falling within Chapter 71 of the Customs Tariff. If the intention was to restrict the exemption to any special form of gold or any manufactured or semi-manufactured condition the exemption notification would have restricted grant of such exemption to the specific sub-headings pertaining to gold in unwrought or semi-manufactured form.
2. In the present appeal the Department has contended that the Collector (Appeals) had wrongly expanded the meaning of the word 'gold' on the basis of definition of gold in FERA 1973 and have applied the same to the provisions of EXIM Policy and the exemption Notification No. 117/94. The Collector had in the process completely disregarded the distinction made between gold and gold coins under Chapter 71 of First Schedule to the Customs Tariff Act. The Department has contended that the rates at which duties of Customs shall be levied under the Customs Act was provided in Section 2 of the said Act and exemptions thereof are notified under Section 25 thereof. Since the exemptions are issued in terms of Section 25 thereof the provisions thereof required to be interpreted in accordance with the classifications under the First Schedule to the Customs Tariff Act and not elsewhere. Since Notification No. 117/94-Cus. provided concessional rate of duty to gold subject to the other conditions mentioned therein, it covered the provisions of the SIL also. Since the Chapter 71 of the First Schedule to the Customs Tariff Act distinguished gold from the gold coins, there was a clear difference between gold and gold coins. The department also derived support from the Explanatory Notes under Heading 71.08 the HSN.The Department contends that the reliance placed by Collector (Appeals) on the definition of gold provided in FERA, 1973 in interpreting EXIM Policy and Notification No. 117/86 was uncalled for.
3. Appearing for the Revenue the learned DR reiterated the grounds of appeal and prayed for setting aside of the impugned order and retention of the order-in-original.
4. Opposing the prayer of the Department, the learned Counsel relied on the decision of the Tribunal in Appeal No. C/496/95-D CCE v. R.G. Shahi & Chauhan Zaveer in which the Tribunal held that gold included all forms of gold. The Tribunal has not given any finding that gold did not include gold jc ellery. He also relied on the Bombay High Court judgment in Commercial Sales Tax Officer v. Agarwal & Co. reported in 1883 (12) E.L.T. 116 in support of his contention that a general item would cover all varieties of goods under an item. He also relied on the decision of the Tribunal in 1985 (19) E.L.T. 590 in Western India Plywood v. CCE in support of his contentions. Counsel also submitted that in Hindustan Platinum v. CCE - 1995 (77) E.L.T. 276 the Supreme Court, while discussing the scope of Tariff Item 24 under the old Tariff Item had held that "silver" in Tariff Item 24 should be given a wider meaning to include all silver articles, [Even] under new Chapter 71 under notes 5 & 6 gold coins being alloys with 22 carat purity would come within the purview of the expresssion "precious metal" under note 6 which said that metals included alloys also. He also relied on the Notification No. 171/94 which amended Notification No. 117/94 allowing more liberalised baggage rules for gold.5. We have considered the rival submissions. It is true that the Export Import Policy does not specifically refer to the definition of gold in the Customs Tariff Act or the FERA. It cannot however be denied that the Export Import Policy had followed the amendment of the FERA by which the total ban on import of gold was removed and selective import of gold was made permissible subject to certain conditions. SIL had specified the conditions of such import. No doubt Notification No.117/94-Cus. was issued pursuant to Section 23 of the Customs Act. The purpose of issuing the exemption Notification No. 117/94 was to facilitate the liberalised scheme on the import of gold under SIL and the public notices issued pursuant thereof. The fact that 'gold' was used both in SIL and in the exemption Notification has to be seen in the context of the object sought to be achieved by SIL and the exemption notification. The various Chapter headings and sub-headings given in the Customs Tariff Act are meant to (sic) one object of levying and collection of different rates of duty on different items and sub-items. In the instant case the use of the word "gold" without any further qualifications to restrict its meaning should receive its normal meaning in common parlance which will include all items of gold.Gold coins are nothing but a form of gold in the context of SIL and the exemption Notification No. 117/94 whose purpose is to allow the more liberalised policy for importation of gold, any interpretation which will restrict its scope will go against the very purposes of SIL and the Notification. In this view of the matter, we are of the view that the order of the Collector (Appeals) suffers from no legal infirmity and needs to be upheld. Accordingly, we uphold the impugned order and reject the appeal of the Revenue. Ordered accordingly.