PH Jewels Vs Principal Commissioner of Customs (CESTAT Hyderabad)
CESTAT Hyderabad held that exemption notification no. 57/2000 issued u/s. 25 of the Customs Act, 1962 prevails over CBEC circular and hence since exemption notification does not stipulate that only imported gold should be used to manufacture goods for export there is no such requirement.
Facts- MMTC is one of the agencies nominated agencies which was permitted to import gold duty free and sell it to jewellery exporters who are expected to manufacture jewellery and export it. PH Jewels is one such exporter. Gold so imported is exempted from the whole of duty of customs by Notification no. 57/2000-Cus dated 8.5.2000 subject to the condition that the jewellery manufactured shall be exported.
DRI received information that PH Jewels had diverted the duty free gold into domestic market instead of exporting jewellery made out of it and initiated investigation. Forming an opinion that the gold imported claiming exemption under notification no. 50/2007-Cus could not have been diverted to domestic market and it should only have been used to manufacture jewellery and the export obligation should have been fulfilled by exporting it only, DRI wrote to MMTC asking for details of the gold sold to PH Jewels and then directed MMTC to pay Customs duty with interest which it did. Thereafter, the SCN was issued which culminated in the impugned order.
