Tariff classification of clear float glass with tin layer upheld; extended limitation and penalties set aside.

Clear Float Glass imported from Malaysia was treated as classifiable under CTH 70051090 because the laboratory reports and Chapter Note 2(c) showed a microscopically thin tin layer, bringing the goods within the specific heading for non-wired glass with an absorbent, reflecting or non-reflecting layer; the residual heading 70052990 was not preferred, and Notification No. 46/2011-Cus remained available. The extended limitation under Section 28(4) of the Customs Act was not invocable because the imports had been provisionally assessed, the department already knew the classification position, and there was no suppression or wilful misstatement. The demand and all consequential confiscation, redemption fine and penalties were set aside.

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Issues: (i) Whether Clear Float Glass imported from Malaysia was classifiable under CTH 70051090 with the benefit of Notification No. 46/2011-Cus dated 01.06.2011, or under CTH 70052990 as reclassified by the department; (ii) whether the extended period of limitation under Section 28(4) of the Customs Act, 1962 was invocable and the consequential demand, confiscation, redemption fine and penalties could survive.

Issue (i): Whether Clear Float Glass imported from Malaysia was classifiable under CTH 70051090 with the benefit of Notification No. 46/2011-Cus dated 01.06.2011, or under CTH 70052990 as reclassified by the department.

Analysis: The dispute turned on Chapter Note 2(c) to Chapter 70 of the Customs Tariff Act, 1975, which explains that an 'absorbent, reflecting or non-reflecting layer' means a microscopically thin coating of metal or chemical compound. The record showed that the imported Clear Float Glass was non-wired and non-tinted and the test reports from the notified laboratory recorded the presence of a tin layer on one side, described as absorbent and non-reflective under UV illumination. On that basis, and in view of the settled classification approach applied in earlier identical matters, the presence of the tin layer satisfied the tariff description under heading 7005 10. The residual entry under 70052990 could not be preferred when the goods answered the specific entry.

Conclusion: The classification under CTH 70051090 was correct and the benefit of Notification No. 46/2011-Cus dated 01.06.2011 was available to the assessee.

Issue (ii): Whether the extended period of limitation under Section 28(4) of the Customs Act, 1962 was invocable and the consequential demand, confiscation, redemption fine and penalties could survive.

Analysis: The imports had been under provisional assessment in several instances and the department was already aware of the classification position through the test reports and earlier assessments. The proceedings were triggered by an audit objection rather than by evidence of suppression or wilful misstatement by the importer. In these circumstances, bona fide adoption of a classification entry could not be equated with misdeclaration for invoking the extended period. Once the demand itself was unsustainable on limitation and merits, the connected confiscation, redemption fine and penalties also could not stand.

Conclusion: The extended period was not invocable and the demand, confiscation, redemption fine and penalties were unsustainable.

Final Conclusion: The appeal succeeded in full, the imported goods were held to fall under the claimed tariff entry, and all consequential adverse fiscal consequences were set aside.

Ratio Decidendi: Where clear float glass is shown by the tariff description, chapter note and laboratory evidence to bear an absorbent tin layer, it falls under the specific heading for non-wired glass having an absorbent, reflecting or non-reflecting layer, and absent suppression or wilful misstatement, the extended period and related penal consequences cannot be invoked.

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