ICICI BANK LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THERE are five appeals filed by five different appellants being considered in this proceeding. All the appeals arise from the same impugned order. 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 Bills of Entries for clearing the consignments. M/s. Gold Quest International Pvt. Ltd. (GQIPL for short) paid the import value for these goods to ICICBL and additional 2% commission to ICICIBL and took possession of these goods. There is a dispute whether it was a transaction of sale between ICICBL and GQIPL or whether ICICIBL was acting as an agent for GQIPL. But this matter is not important in deciding the main dispute. The main dispute in the appeal filed by these two main appellants is the classification of the gold and silver medals imported. The appellants are contesting that the classification of the goods is under Chapter 71. The first appellant claimed classification 71081200 for gold medals and 71069290 for silver medals. The appellants claimed benefit of Notification No. 80/97 -Cus. and Notification No. 62/04 -Cus. for different periods. These exemption Notifications were applicable only to goods classifiable under Chapter 71. Revenue is contesting that the medals were classifiable under Heading 9705 00 90. There is also an issue contested by Revenue that local agency commission of 2% received by the first appellant from the second appellant, namely, GQIPL is to be added to the assessable value for determining customs duty. The impugned order denied the benefit of the exemption notifications claimed and confirmed a duty demand of Rs. 25,27,89,159/ - from ICICIBL along with interest. Further the goods valued at Rs. 164,79,30,708/ - were ordered to be confiscated under section 111(d), 111(m) and 111(o) of the Customs Act, 1962. An option was given to redeem the goods on payment of a fine of Rs. 8,23,00,000/ -. (The goods were already cleared and were not available for confiscation or redemption). Further, a penalty of Rs. 2.50 crores under Section 112(a) and 114A of the Customs Act, 1962 is imposed.

(2.) THE medals imported by the first appellant, ICICIBL and second appellant, GQIPL had images of god, goddess, saints, temples, historical sites, well known historical persons like Shri Narayana Guru, Mother Teresa etc., embossed on each of the medals. The key question to be decided in these appeals is whether such medals were rare and collectors pieces having numismatic interest as held in the impugned order and consequently whether the correct classification of the goods was under heading 97.05 of Customs Tariff as decided in the impugned order as against classification under Chapter 71 claimed by the appellants. Actually, the issue is more precisely whether the imported items were eligible for exemption under Notification No. 80/97 -Cus. and Notification No. 62/04 -Cus. for different periods, which notifications were available to goods falling under Chapter 71 and not available to goods falling under Chapter 97. There is an issue of valuation adjudicated, in para 53 of the impugned order, ordering that the 2% margin charged by ICICIBL to GQIPL should form part of the assessable value for payment of duty. This issue becomes relevant if the goods are classifiable under Chapter 97 and consequently duty is to be paid based on value. If the goods are held to be classifiable under Chapter 71 the importers would be eligible to pay duty at specific rates under Notification No. 80/97 -Cus. and Notification No. 62/04 -Cus. for different periods.

(3.) THE investigation in the matter started first in the case of Bill of Entry No. 405093, dated 03.07.2007 filed by ICICIBL for clearance of 24 packages containing 4199 nos. of gold medals of purity 999.9 weighing 22,595.89 gms. valued at Rs. 3,02,50,670/ - and 5497 nos. of silver medals of purity 999.9 weighing 152.36 kgs. valued at Rs. 53,03,397/ -. The goods were first examined for assessment. Benefit of Customs Notification No. 62/2004 -Cus. dated 12.05.2004 was claimed by the importer. But, it was noticed that though the description in the invoice tallied with the description given in the Bill of Entry, the corresponding Air Way Bill No. 020 66 99 6952, dated 25.06.2007 showed the description of the goods as Gold and Silver Coins Numismatics 24 pieces. The assessing officer made further queries to find out whether these coins were of numismatic interest because coins of numismatic interest were classifiable under Heading No. 9705 of Customs Tariff and such goods were not eligible for exemption under Notification No. 62/2004 -Cus. dated 12.05.2004 as claimed. Two more similar consignments covered by Air Way Bill Nos. 020 66997114 and 098 8644 3766 for which Bill of Entry No. 406929, dated 05.07.2007 and Bill of Entry No. 407786, dated 07 -07 -2007 were filed by ICICIBL declaring classification under Customs Tariff Heading 71081200 were found and the goods imported under the three bills of entries were provisionally assessed. The present impugned order does not deal with the three bills of entries assessed provisionally.