Classification of Clear Float Glass with tin layer upheld; extended limitation failed without positive suppression or wilful misdeclaration.

Clear Float Glass with a microscopically thin tin layer was treated as non-wired glass having an absorbent, reflecting or non-reflecting layer under Chapter Note 2(c) to Chapter 70, so classification under CTH 70051090 was upheld and exemption under Notification No. 46/2011-Cus was available, subject to the required origin documentation. The extended limitation period was not invocable because the record showed no positive suppression or wilful misdeclaration, and a bona fide classification dispute could not by itself justify extended-time demand. As the limitation basis failed, the consequential confiscation, redemption fine and penalty were also unsustainable.

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Issues: (i) Whether Clear Float Glass was correctly classifiable under CTH 70051090 and entitled to the benefit of Notification No. 46/2011-Cus dated 01.06.2011, and (ii) whether the extended period of limitation and consequential demand, confiscation, fine and penalty were sustainable.

Issue (i): Whether Clear Float Glass was correctly classifiable under CTH 70051090 and entitled to the benefit of Notification No. 46/2011-Cus dated 01.06.2011.

Analysis: The applicable tariff entry for non-wired glass having an absorbent, reflecting or non-reflecting layer, read with Chapter Note 2(c) to Chapter 70, was found to cover Clear Float Glass having a microscopically thin tin layer on one side. The record, including test reports and the manufacturing process, showed the presence of a tin layer that answered the statutory description of an absorbent or non-reflective layer. The side on which the layer appears was held to be immaterial, and no warrant was found to add a further condition that the layer must be a separate coating on the air side. The benefit of the notification therefore followed the accepted classification, subject to the origin documentation contemplated by the notification.

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

Issue (ii): Whether the extended period of limitation and consequential demand, confiscation, fine and penalty were sustainable.

Analysis: The dispute arose from an audit objection even though the Department had earlier accepted the same classification in similar matters and the assessments had been provisionally assessed and later finalised. In the absence of any finding of positive suppression or wilful misdeclaration, the adoption of a particular classification could not by itself be treated as misdeclaration for invoking the extended period. Once the limitation issue failed, the demand based on the larger period and the connected consequences of confiscation, redemption fine and penalty could not survive.

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

Final Conclusion: The appeal succeeded, the impugned order was set aside, and the assessee obtained complete relief on classification and limitation.

Ratio Decidendi: Clear Float Glass with a microscopically thin tin layer satisfies the description of non-wired glass having an absorbent, reflecting or non-reflecting layer under Chapter Note 2(c) to Chapter 70, and a bona fide classification dispute without positive suppression does not justify invocation of the extended period.

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