Case Law Details
In the present case, NEBULA Watch, which is predominantly a jewellery, is made of gold, precious metals and /or precious stones /diamonds and is made of 18 Karat gold. Under the circumstances, the same can be said to be an “Article or Jewellery” falling within Entry No.13(ii) of Schedule II of the Act.
Relevant Extract of the Judgment
[2.2] It was the case on behalf of the assessee / dealer that the assessee is manufacturing Electronic Watches, Jewellery Watches (NEBULA brand), Jewellery (Tanishq brand), Spectacles (sun glasses /goggles – Fastrack Brand) at his various factories in India. It was the case on behalf of the assessee /dealer that the NEBULA Jewellery Watch is made of gold and /or silver and /or diamonds and /or precious stones and /or semi previous stones. It was contented on behalf of the assessee /dealer that the NEBULA Jewellery Watch would fall under 13(ii) of Schedule II of the Act. It was the case on behalf of the assessee /dealer that the NEBULA Watches are manufactured within the factory of the assessee with precision craftsmanship by the designers and artisans like goldsmith. It was contented that the jewellery watch is more a jewellery than a watch, because in such item the content of gold or precious metal and /or precious stone is predominant. It was contended on behalf of the assessee that the value of gold or precious stone remains at almost 90% to 95% whereas the value of watch is hardly of more than Rs.1400/- to Rs.2000/-, and therefore, it was submitted that the jewellery watch is in fact a piece of jewellery, where a watch movement is embedded in such jewellery. It was contended on behalf of the assessee that the buyer is very much interested in buying such item as jewellery because of its ornamental value and the status it carries in the society. It was submitted that one who wants to buy a watch only would buy a simple watch, but who wants to buy something more than a simple watch and a unique item in jewellery with an additional facility like that of a watch in jewellery would go for such jewellery watches. It was further submitted /contended that the jewellery watches normally are marketed by jewellers in their show room and watch dealers are hardly selling such jewellery watch, and therefore, it was submitted that NEBULA Jewellery Watch would fall under Entry 13(ii) of Schedule II of the Act.
On the other hand, it was the case on behalf of the State that NEBULA Jewellery Watch is a watch which carries mechanism of Watch. It was the case on behalf of the State that there is no specific entry of watch, and therefore, it would fall under Entry No.87 of Second Schedule of the Act. On appreciation of material on record and considering Entry No.13(ii) of Schedule II of the Act, by the impugned judgment and order, the learned tribunal has held that NEBULA Jewellery Watch would fall under Entry No.13(ii) of Schedule II of the Act. However, while holding so, the learned tribunal has observed and held that the said decision shall be applicable prospectively and the assessee /dealer shall not be entitled to refund on the basis of the said decision, more particularly, with respect to the past transactions.
Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned tribunal, revenue has preferred the present Appeal to consider the following proposed question of law;
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