“Pendants” Described As Jewellery Are Not Distinguishable On Basis Of Purity Of Gold, No Exemption From Excise Duty: CESTAT

The Bench of Bintu Tamta (Judicial) and Hemambika R. Priya (Technical) has observed that, “The contention of the assessee that articles of jewellery do not cover pendant of 24 CARAT within its purview is misleading and unsustainable as nowhere in the Chapter Note or the Heading, the jewellery is distinguishable on the basis of purity of gold.

Rule 3(f) of the Articles of Jewellery (Collection of Duty) Rules, 2016 defines “articles” means articles of jewellery or both falling under Heading 7113 of the Tariff Act, wherein the expression “articles of jewellery” shall have the meaning assigned to it as under chapter note 9 of chapter 71 of the Tariff Act.

In this case, the assessee/appellant is engaged in the manufacture of articles of jewellery. Investigations revealed that assessee had not paid central excise duty on the articles of jewellery manufactured and cleared by them.

The department issued show cause notice as to why central excise duty not paid by them on the finished goods should not be recovered from them. The assessee neither filed reply to the show cause notice nor appeared for personal hearing.

On adjudication, the demand was confirmed by the Adjudicating Authority. The appeal has been filed by the assessee before the Tribunal challenging the order passed by Adjudicating Authority.

The assessee contended that no duty is chargeable on Pendant of 24CT purity as they are items of pure gold having trademark which was in the form of gold coins classifiable under 7114 and liable to nil rate of duty, which have remained the same, even after substitution, imposing central excise duty.

Whereas it was contended by the department regarding demand of duty on 24 carat pendant that pendants are articles of jewellery and also Chapter Note 9 includes pendants.

The bench observed that Chapter note 9 states that pendant comes under the expression articles of jewellery and the contention of the assessee that it does not cover pendant of 24 CARAT within its purview is misleading and unsustainable as nowhere in the Chapter Note or the Heading, the jewellery is distinguishable on the basis of purity of gold.

The Tribunal opined that “The assessee is deliberately reading the words,24 carat in the chapter note, which is not permissible. As per the trade practice, it is well known that no articles of jewellery can be manufactured of 24 CARAT purity gold. The assessee is not entitled to claim any exemption on the articles described as Pendants and is, therefore, liable to pay excise duty on the said amount.”

In view of the above, the Tribunal allowed the appeal.

Counsel for Appellant/ Assessee: Karan Khanna

Counsel for Respondent/ Department: Rakesh Agarwal

Case Title: M/S. P.P. Jewellers Pvt. Ltd. Versus Principal Commissioner, Central Tax, And CGST Commissionerate

Case Number: Excise Appeal No. 52154 Of 2022