The Delhi High Court quashed the order of the Customs Department classifying Imported Gold Coins under head ‘Coins’ of the Customs Tariff Act,1975 (CTA). By way of the present writ petition, the petitioner questioned the validity of the impugned orders dated 04 September 2020 and 07 September 2020 passed by the Principal Commissioner of Customs, the second respondent herein. By the impugned order the second respondent has rejected the classification of gold coins imported vide 27 Bills of Entry under CTH 7114 1910 as claimed by the petitioner and held that these goods are correctly classifiable under CTH 7118 9000 of the Customs Tariff Act,1975.
The grievance of the petitioner essentially is that the second respondent appears to have construed the judgment rendered in Khandwala Enterprise as having finally determined the question of whether the articles imported by the petitioner were liable to be classified under CTH 7114 1910 or 7118 9000. According to the senior counsel who appeared in support of the petition, the second respondent incorrectly proceeds on the assumption that this Court had conclusively held that the articles imported by the petitioner were liable to be classified under CTH 7118 9000. It was in the aforesaid backdrop that the counsel for the petitioner had submitted that since it was ex facie evident that the impugned orders had completely misconstrued the judgment rendered inter partes, the ends of justice would warrant an appropriate clarification being rendered by the Court in this regard whereafter the petitioner may be accorded the liberty to pursue the appellate remedy.
In Khandwala Enterprise, the Court clearly appears to have referred to gold coins as falling in CTH 7118 9000 proceeding on the premise that they were articles which were or are proposed to be used as legal tender. This Court is thus of the firm opinion that the observations as appearing in Paras 49 and 50 have been clearly misinterpreted by the respondents as the Court having held or purporting to hold that all articles of gold which may be colloquially referred to as coins would be liable to be placed under CTH 7118 9000.
A Division Bench comprising Justices Yashwant Varma and Dharmesh Sharma observed that “We are thus of the firm opinion that the Principal Commissioner has clearly committed a manifest error while viewing the judgment rendered in Khandwala Enterprise and proceeding on the assumption that the contentions raised by the petitioner already stood conclusively answered by the Court. The aforesaid premise is clearly based on an incorrect reading of that decision. The Principal Commissioner has also clearly erred in failing to appreciate the import of the explanatory notes which stand placed along with CTH 7118 9000 and ignoring the binding character of those notes.”