Imported Clear Float Glass classified under CTH 70051090, not CTH 70052990, following Bagrecha Enterprises precedent

CESTAT Chennai held that imported Clear Float Glass is classifiable under CTH 70051090, not CTH 70052990 as reclassified by the Department. Following precedent from Bagrecha Enterprises Limited case, the tribunal ruled that the appellant correctly self-assessed the goods. Extended period of limitation was deemed non-invokable as the Department had previously assessed identical imports provisionally for over five years without objection, indicating no suppression or misdeclaration by the appellant. The appellant was held eligible for FTA benefit under Notification 46/2011-Cus. Appeal allowed; impugned order set aside.

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Issues Involved:

1. Classification of imported Clear Float Glass (CFG) under the correct Customs Tariff Heading (CTH).
2. Eligibility for Free Trade Agreement (FTA) benefit under Notification No. 46/2011-Cus.
3. Invocation of the extended period for demand of duty and penalties.

Issue-wise Analysis:

1. Classification of Imported Clear Float Glass (CFG):

The primary issue was whether the imported CFG should be classified under CTH 70051090, as declared by the appellant, or under CTH 70052990, as re-assessed by the Department. The appellant argued that the CFG, being non-wired and having a thin tin layer on one side, qualifies as having an "absorbent, reflecting or non-reflecting layer" per Chapter Note 2(c) to Chapter 70 of the Customs Tariff Act, 1975. This classification was supported by test reports from the CSIR-CGCRI, which confirmed the presence of a tin layer. The Tribunal found that the presence of this layer meets the requirements for classification under CTH 70051090, as it is absorbent and non-reflective. The Tribunal also referenced previous rulings and decisions, including those by the Kolkata and Chennai Tribunals, which supported this classification. The Department's insistence that the layer must be on the air side or result from a separate coating process was not upheld, as neither the tariff heading nor the chapter note specified such requirements.

2. Eligibility for FTA Benefit:

The appellant claimed the FTA benefit under Notification No. 46/2011-Cus, which the Department denied based on the reclassification of CFG. The Tribunal concluded that since the CFG was correctly classified under CTH 70051090, the appellant was entitled to the FTA benefit. The Tribunal emphasized that the benefit should not be denied based on the classification mentioned in the Country of Origin Certificate if the goods meet the criteria under the correct classification.

3. Invocation of Extended Period:

The extended period for demand of duty and penalties was contested by the appellant, who argued that there was no wilful misclassification or intention to evade duty. The Tribunal noted that the Department had previously accepted the classification under CTH 70051090 and that the assessments had been finalized without dispute. The Tribunal found no evidence of positive suppression by the appellant and determined that misclassification could not be equated with misdeclaration. The Tribunal relied on precedents which held that bona fide adoption of classification by the importer does not amount to misdeclaration. Consequently, the invocation of the extended period was deemed unsustainable, and the order for confiscation, fine, and penalties was set aside.

Conclusion:

The Tribunal held that the imported Clear Float Glass is classifiable under CTH 70051090, making the appellant eligible for the FTA benefit under Notification No. 46/2011-Cus. The invocation of the extended period for demand of duty and penalties was not justified. The impugned Order-in-Original was set aside, and the appeal was allowed with consequential relief as per the law.

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