Clear float glass with absorbent layer classified under sub-heading 7005 1090 eligible for exemption benefits despite incorrect HS code in Certificate of Origin

The Customs Authority for Advance Rulings, Mumbai classified clear float glass with absorbent layer under sub-heading 7005 1090 of the Customs Tariff Act, 1975. The AAR held that despite incorrect HS code mention in the Certificate of Origin, the goods remain eligible for exemption benefits under notification 46/2011-Cus if proper origin evidence is produced to customs authorities. The imports are subject to anti-dumping duty under notification 37/2020-Customs for goods from Malaysia, but exemption benefits under sr. no. 934 of notification 46/2011-Cus shall be extended upon compliance with origin verification requirements.

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Issues Involved:
1. Classification of clear float glass having an absorbent layer.
2. Eligibility of exemption notification no. 46/2011-Cus. dated 01.06.2011.
3. Eligibility of the exemption notification no. 46/2011-Cus. dated 01.06.2011 for the subject goods in the event of wrong mention of HS code in the Certificate of Origin (COO).

Issue-wise Detailed Analysis:

1. Classification of Clear Float Glass Having an Absorbent Layer:

The applicant, a partnership concern trading in glass and mirrors, sought advance rulings on the classification of "Clear Float Glass with Absorbent layer." The subject goods are intended to be imported from Malaysia and are used for decorative, industrial, or automotive purposes. The applicant argued that the goods should be classified under sub-heading 7005 1090, which covers non-wired glasses having an absorbent layer. The Customs Authority for Advance Rulings (CAAR) examined the characteristics and manufacturing process of the subject goods and concluded that they are appropriately covered under sub-heading 7005 1090. The ruling referenced a previous decision (CAAR/Mum/ARC/36/2021) which also classified similar goods under 7005 1090.

2. Eligibility of Exemption Notification No. 46/2011-Cus. Dated 01.06.2011:

The applicant sought to claim the benefit of a 'Nil' rate of customs duty under exemption notification no. 46/2011-Cus. for goods falling under CTH 7005 1090 if imported from Malaysia. The CAAR considered the provisions of the notification, which prescribes effective rates of duty for specified goods imported from ASEAN countries, including Malaysia. The notification requires proof of origin to the satisfaction of the Deputy/Assistant Commissioner of Customs. The CAAR ruled that the benefit under Sr. No. 934 of the table annexed to the exemption notification no. 46/2011-Cus. would be available for the subject goods, provided the applicant produces evidence of the origin of the goods for each case of import.

3. Eligibility of the Exemption Notification No. 46/2011-Cus. Dated 01.06.2011 for the Subject Goods in the Event of Wrong Mention of HS Code in the COO:

The applicant raised a concern about the eligibility for exemption if the HS code mentioned in the COO differs from the correct classification. The CAAR noted that the subject goods are being exported from Malaysia under HS code 7005 2990, which does not match the Indian classification of 7005 1090. The CAAR emphasized that the classification of imported goods must comply with Indian laws. If the correct classification is 7005 1090, the benefit of the exemption should not be denied due to a mismatch in the HS code on the COO. The CAAR referenced communication from the Ministry of International Trade and Industry (MITI) of Malaysia, which indicated that the Royal Malaysian Customs accepted the HS code 7005 1090 for similar goods. The CAAR concluded that the eligibility for exemption under Sr. No. 934 of the notification would not be adversely affected by the wrong mention of HS code in the COO, provided the goods are correctly classified under 7005 1090 based on their nature, characteristics, and properties.

Conclusion:

The CAAR ruled that the subject goods "Clear Float Glass with Absorbent layer on only one side" should be classified under heading 70.05, specifically under sub-heading 7005 1090. The imports would also be governed by Notification No. 37/2020-Customs (ADD), which imposes anti-dumping duty on Clear Float Glass from Malaysia. The benefit of Sr. No. 934 of notification no. 46/2011-Cus. would be extended to the subject goods, provided the applicant produces evidence of the origin of the goods for each import. The eligibility for the exemption would not be affected by the wrong mention of HS code in the COO.

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