CESTAT Chandigarh Permits Re‑Export of Seized Silver Jewellery Amid Classification Controversy

Background And Procedural History

The matter concerns an appeal filed by M/s Tushar Jewellers against an order dated 08.05.2026 passed by the Commissioner (Appeals), which had confirmed the decision of the original adjudicating authority dated 15.03.2026. Both authorities had refused the assessee’s request for provisional release of imported consignments of silver jewellery.

The assessee had imported from Thailand two consignments of 92.5% silver jewellery studded with synthetic stones and filed the following Bills of Entry:

  • Bill of Entry No. 6042250 dated 02.12.2025
  • Bill of Entry No. 6042246 dated 02.12.2025

The consignments together weighed 12,22,860 grams and were valued at ₹25,16,49,066. The goods were seized on 07.01.2026.

The central controversy was not about the description or nature of the goods, but about their tariff classification and the legal consequences of that classification in light of a DGFT import restriction.

Dispute Over Tariff Classification And Import Policy

Department’s Stand

The Department’s position was as follows:

  • The assessee declared the goods under CTI 71131145.
  • The Department asserted that the goods correctly fell under CTI 71131149.
  • As per DGFT Notification No. 34/2025-26 dated 24.09.2025, imports falling under CTI 71131149 were categorized as restricted.
  • Intelligence gathered by DRI, Ahmedabad showed that:
    • Before the DGFT Notification, the same assessee had been classifying identical silver jewellery with synthetic stones under CTI 71131149.
    • Immediately after the notification, classification was changed to CTI 71131145, without any change in product characteristics.
  • Examination under panchnama and testing by Indian Diamond Institute, Surat confirmed that the stones were synthetic cubic zirconia and synthetic ruby, and not natural stones.
  • The Department invoked:
    • Section 11 of the Customs Act, 1962, read with
    • Section 3 of the Foreign Trade (Development and Regulation) Act, 1992,
      arguing that the import violated policy and the goods were liable for confiscation.
  • It was further contended that:
    • CTI 71131145 covers jewellery studded with natural precious or semi-precious stones.
    • Jewellery set with synthetic stones, which are classifiable under CTH 7104, should be placed in the residual entry CTI 71131149.
  • Relying on Union of India vs. Raj Grow Impex LLP, 2021 (377) E.L.T. 145 (S.C.), the Department argued that goods imported in violation of import policy should not be permitted to enter the domestic market, and provisional release is not a matter of right in such circumstances.

Assessee’s Stand

The assessee, represented by learned counsel, advanced the following key points: