2026-VIL-993-CESTAT-BLR-CU
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CUSTOMS CESTAT Cases

Customs - Classification of gold neck chains in running length as articles of jewellery – Importer imports gold neck chains in running lengths ranging from 2.8 feet to 206 feet from Indonesia, classifying them under Customs Tariff Heading 7113 (articles of jewellery) with nil basic customs duty under Notification No. 46/2011-Cus. dated 01.06.2011 - Customs authorities reclassify the goods under Customs Tariff Heading 7108 (gold in semi-manufactured forms) proposing confiscation and penalty – Whether gold neck chains in running length, which require only cutting to customer-specified length and attachment of hooks to become finished wearable articles, are classifiable as articles of jewellery under Customs Tariff Heading 7113 or as semi-manufactured gold under Customs Tariff Heading 7108 – HELD - The Chapter Note 9(a) to Chapter 71 explicitly includes necklaces as articles of jewellery, and the impugned goods are gold neck chains intended for personal adornment. The Rule 2(a) of the General Rules of Interpretation provides that incomplete or unfinished articles attaining the essential character of a complete finished article shall be classified under the heading of the finished article – From the photographs of the goods it is seen that gold neck chains in running length have substantially attained the form of finished articles requiring only minor finishing operations of cutting and hook attachment, which do not alter the essential character of the goods as neck chains. The mere cutting or slitting of a product without change in its name, character or end-use does not constitute manufacture and does not warrant reclassification to a different commodity head. Consequently, the goods are not liable for confiscation under Section 111(d) and 111(m) of the Customs Act, 1962, and the imposition of redemption fine and penalty becomes untenable – The impugned order is set aside to the extent of imposition of redemption fine and penalty, and the appeal is disposed of
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