2025 (4) TMI 702 - AT - Customs

Revenue loses appeal on windshield glass classification under CTH 70071100 versus CTH 87089900

Commissioner of Customs (Port), Kolkata Versus M/s. Enterprise International Limited

CESTAT Kolkata dismissed Revenue's appeal regarding classification of imported windshield glass sets. The tribunal held that goods should be classified ... Classification of imported goods - wind shield glass set - to be classified under the Customs Tariff Item 70071100 or under the CTH 87089900 - HELD THAT:- As per the reading of descriptions as provided under Import Tariff, Section Notes to Chapter XVII and Explanatory Notes to HSN/CTH 8708, it is found that the goods imported will have the essential characteristic of parts & accessories of motor vehicles only when the same are solely or principally used in the said vehicle. The goods as imported by the respondent did not fulfil the description as provided in explanatory notes to CTH 8708 . Moreover, the assessing officer in his findings has not adduced any evidence that the goods imported by the respondent are the parts and accessories of motor vehicles. Thus, as per the Chapter Notes cited, the goods imported by the respondent are excluded from the CTH 8708. It is observed that as per the Explanatory Notes to Chapter Heading 7007, 'Toughened (tempered) Glass' are specifically covered under the CTH 7007. In vehicles, such windshield glasses are fixed for protection of the passengers. These glasses are used in heat chambers as well as in cubicles set up in snowy areas. It has multiple uses. The Department sought to classify the goods under CTH 8708 as parts of vehicles by alleging that these are usable in vehicles as well. However, it is not necessary that all cars would have windshields. It is further observed that 'wind screens' were included in the CTH 87082200 after the amendment brought in finance Bill 2001. The respondent referred the decision of the Tribunal in the case of Indian National Shipowners Association versus Union of India [2009 (3) TMI 29 - BOMBAY HIGH COURT], wherein it has been held that introduction of new entry under the provisions of statute denotes that such tariff was not previously applicable. Thus, prior to amendment brought in by the Finance bill 2001, the impugned goods ‘wind shield glass set’ were not classifiable under the CTH 8708 as motor vehicle parts. As the CTH 70071100 specifically covered the impugned goods imported by the respondent during the period under dispute, there are no infirmity in the impugned orders passed by the Ld. Commissioner (Appeals). Conclusion - The goods were appropriately classified under CTI 70071100 during the relevant period. The impugned orders upheld - appeal of Revenue dismissed. ISSUES PRESENTED and CONSIDEREDThe primary legal issue considered was the appropriate classification of the imported goods, described as 'wind shield glass set,' under the Customs Tariff. Specifically, the question was whether these goods should be classified under Customs Tariff Item (CTI) 70071100, as declared by the respondent, or under CTI 87089900, as determined by the assessing officer.ISSUE-WISE DETAILED ANALYSISRelevant legal framework and precedents:The classification dispute revolves around the Customs Tariff Act, 1975, and the application of the General Rules for the Interpretation of the Harmonized System (GIR). The key rules in contention were Rule 2(a) and Rule 3 of the GIR. Additionally, the case referenced precedents from the Supreme Court regarding the classification of goods based on their essential character rather than end-use.Court's interpretation and reasoning:The Tribunal considered the classification under CTI 70071100, which covers 'Toughened (tempered) safety glass of size and shape suitable for incorporation in vehicles, aircraft, spacecraft, or vessels.' The Tribunal noted that the goods imported by the respondent were described as 'wind shield glass set' and were not solely or principally used in motor vehicles, which is a requirement for classification under CTI 87089900.Key evidence and findings:The Tribunal found that the goods had multiple uses, including in heat chambers and snowy areas, and were not exclusively for motor vehicles. The assessing officer failed to provide evidence that the goods were parts and accessories of motor vehicles. The Tribunal also noted that prior to the amendments in the Finance Act 2021, the goods were not included under CTI 8708.Application of law to facts:The Tribunal applied Rule 2(a) and Rule 3 of the GIR, emphasizing that the essential character of the goods should determine their classification. Since the goods were not solely or principally used in motor vehicles, they did not meet the criteria for classification under CTI 87089900. The Tribunal upheld the classification under CTI 70071100, as it specifically covered the imported goods during the relevant period.Treatment of competing arguments:The Tribunal addressed the Revenue's argument that the goods should be classified as parts of vehicles under CTI 8708, citing the explanatory notes and the amendments in the Finance Act 2021. However, it concluded that these amendments indicated that the goods were not previously classifiable under CTI 8708. The Tribunal also dismissed the Revenue's reliance on irrelevant case laws and the alleged jurisdictional overreach by the Commissioner (Appeals).Conclusions:The Tribunal concluded that the goods were correctly classified under CTI 70071100 by the Commissioner (Appeals) and rejected the Revenue's appeal.SIGNIFICANT HOLDINGSThe Tribunal held that 'as per the Chapter Notes cited above, the goods imported by the respondent are excluded from the CTH 8708.' It emphasized that the goods had multiple uses and were not solely or principally used in motor vehicles, thereby supporting classification under CTI 70071100.The Tribunal also noted that the amendments in the Finance Act 2021, which included 'wind screens' under CTI 87082200, suggested that such goods were not previously classifiable under CTI 8708. This supported the conclusion that the goods were appropriately classified under CTI 70071100 during the relevant period.The final determination was to uphold the impugned orders passed by the Commissioner (Appeals) and dismiss the appeals filed by the Revenue, affirming the classification under CTI 70071100.