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Custom, Excise & Service Tax Tribunal · 28 Nov 2025
Mr. R. K. Digital Solutions vs Hyderabad - G S T
Legal principle
A notification or Explanation that changes or widens the scope of the main provision operates only prospectively and cannot apply to imports made before its date, and where no restriction existed on the date of import, confiscation, demand and penalty cannot be sustained.
Court decision
The Tribunal set aside the impugned order and allowed the appeal with consequential reliefs, holding that the goods are classifiable under CTH 7113 as classified by the appellant and not under CTH 7108; that Notification No. 22 dated 02.09.2021, which widens the scope of the main provision, cannot be given retrospective effect; that since there was no restriction at the time of import, confiscation does not arise; and that the demand is not sustainable and consequently no penalty is imposable.
Facts
M/s R.K. Digital Solutions, a Hyderabad partnership firm holding an Importer Exporter Code, imported 250 oval-shaped gold pendants of 99.99% purity, 20 grams each (5 kg total, valued about Rs. 2,15,60,883.27) from Indonesia vide Bill of Entry No. 3892849 dated 10.05.2021, classifying them under CTH 7113 1910 and claiming ASEAN-India FTA duty exemption with COO certificate, pre-export verification report and Form-1 under CAROTAR 2020. The Department did not release the goods; after proceedings before the Telangana High Court and the Supreme Court, a Show Cause Notice dated 12.11.2021 was issued and the Additional Commissioner, by Order-in-Original dated 23.12.2021, confirmed the SCN proposal. The goods were reclassified under CTH 7108 1300 ('gold in other semi-manufactured form') based on a Government-approved valuer's statement, treated as restricted imports under DGFT Notification No. 36/2019, and made liable to confiscation, demand and penalty. The Commissioner (Appeals) rejected the appeal by the impugned order dated 18.01.2024, leading to this appeal under Section 129A of the Customs Act, 1962.
Key provisions
- Section 5, The Foreign Trade (Development and Regulation) Act, 1992 — Foreign Trade Policy.
- Section 3(2), The Foreign Trade (Development and Regulation) Act, 1992 — Powers to make provisions relating to imports and exports.
- Section 6(3), The Foreign Trade (Development and Regulation) Act, 1992 — Appointment of Director General and his functions.
- Section 129A, Customs Act, 1962 — Appeals to the Appellate Tribunal