2025 (9) TMI 686 - AT - Customs

Imported clear float glass classed under CTH 7005 1090; NIL BCD allowed; changing prior self-assessment without new facts disallowed

CESTAT Chennai - AT held that imported clear float glass is classifiable under CTH 7005 1090, not 7005 2990, and allowed NIL BCD benefit as applicable; ... Classification of imported clear float glass with an absorbent layer - classifiable under CTH 7005 1090 or under CTH 7005 2990 - eligibility for ‘NIL’ rate of BCD as per Sl. No. 934 of N/N. 46/2011 dated 1.6.2011, if imported from ASEAN countries - change of declared and self-assessed classification without the emergence of new facts supporting such a change - HELD THAT:- As per Article 265 of the Constitution of India, no tax shall be levied or collected except by authority of law. The department cannot charge and collect excess amount of tax than that which is due by law and payable by the importer. This would apply even in the case of self-assessment. An importer is not expected to be an expert in classification. At times he may self-assess the goods wrongly and realise the same a little later or he may have declared the classification in accordance with the wishes of the authorities, as appears to be the case here, since an earlier provisional assessment was claimed to have been accepted by the department, after receipt of test report - The payment of duty under protest is a beneficial legal mechanism that has evolved to protect the importer/ exporter from issues related to time bar of a refund claim being made at the end of the appeal process. Hence it can be deployed against an order of self-assessment also. Moreover, the Tribunal being the last fact-finding authority and is duty bound to consider the issue in order to correctly assess the tax liability of an assessee. Before parting it must be said that the role of the Departmental Representative is not merely to represent revenue, but to maintain fairness and impartiality in discharging his duties as an officer of the Court and help in the administration of justice. It is found that the judgment of the coordinate Bench above, after considering the Order in the case of M/s. Bagrecha Enterprises Ltd. Vs. Commissioner of Custom, Chennai [2024 (5) TMI 943 - CESTAT CHENNAI] has held that the classification of Clear Float Glass is under CTH 7005 1090 of the Customs Tariff Act, 1975. The impugned orders are set aside and the appeals are allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether the imported clear float glass with a microscopically thin tin layer is classifiable under Customs Tariff Heading (CTH) 7005 1090 (non-wired glass having an absorbent, reflecting or non-reflecting layer) or under CTH 7005 2990 / 7005 29xx (other non-wired glass without such layer). 2. Whether the importer is entitled to preferential/exemption benefit under the relevant FTA/Notification (Sl. No. 934 of Notification No. 46/2011) when the Country-of-Origin (COO) certificate issued by the exporting country records a different HSN/CTH from that adopted under the Indian Customs Tariff. 3. Whether an importer who has electronically self-declared and self-assessed goods can challenge that self-assessment, lodge a 'protest' or make payment 'under protest,' and whether such challenge entitles the importer to contest classification and claim refund/relief. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Correct classification of imported clear float glass (CTH 7005 1090 v. 7005 2990) Legal framework: Classification governed by the First Schedule to the Customs Tariff Act, relevant Chapter and Chapter Note 2(c) to Chapter 70, and the General Rules for Interpretation (GRI), specifically Rule 1 and Rule 6 (sub-heading determination). Chapter Note 2(c) defines 'absorbent, reflecting or non-reflecting layer' as a microscopically thin coating of metal or chemical compound which, inter alia, absorbs infra-red light or improves reflecting qualities while retaining transparency/translucency. Precedent treatment: Coordinate Bench decisions of this Tribunal and other benches (Calcutta and Chennai) have consistently held that clear float glass (CFG) having a microscopically thin tin layer on one side qualifies as having an 'absorbent, reflecting or non-reflecting layer' and is classifiable under 7005 1090. Those decisions include multiple final orders and advance rulings which the Court treats as binding under the doctrine of precedent for coordinate benches. Interpretation and reasoning: The Tribunal conducts a textual and contextual reading of the tariff entries and Chapter Note 2(c). The only substantive requirement for 7005 1090 is presence of an absorbent/reflecting/non-reflecting microscopically thin layer of metal; there is no requirement as to which physical side (air side or tin side) the layer must be on nor that the layer must be applied post-manufacture rather than present due to thermal diffusion during manufacture. Laboratory test reports from the notified agency (CSIR-CGCRI) confirming the presence of a microscopically thin tin layer that is absorbent/non-reflective support classification under 7005 1090. The Tribunal rejects Revenue's insistence that the metal layer must be the result of a conscious coating or be on the air side; such an addition would impermissibly amend tariff language or chapter notes. Ratio vs. Obiter: Ratio - The Tribunal's binding conclusion is that clear float glass possessing a microscopically thin tin layer (whether applied or resultant from manufacturing process) satisfies Chapter Note 2(c) and is classifiable under CTH 7005 1090. Obiter - Observations on domestic manufacturers' practice and some comparative factual comments in advance rulings are persuasive but subsidiary to the ratio. Conclusions: Classification under CTH 7005 1090 is correct; departmental re-classification to 7005 2990/7005 29xx is unsustainable. Imported CFG having the tin absorbent layer qualifies under 7005 1090. Issue 2 - Entitlement to preferential/exemption benefit despite mismatch in HSN on COO Legal framework: Eligibility for notification/FTA benefit governed by Notification No. 46/2011 read with Customs Tariff (Determination of Origin under ASEAN-India PTA) Rules, 2009; classification for tariff purposes is to be determined by Indian Customs Tariff (GRI/Chapter Notes). Rule 1 GRI and Rule 6 govern sub-heading determination; origin rules require fulfillment of the origin documentary and substantive tests under the DOO rules. Precedent treatment: Tribunal and other benches have held that exporting country's HSN stated on COO cannot be the sole basis to deny preferential benefit where conditions under origin rules and the Indian tariff classification are otherwise satisfied (citing decisions dealing with ISFTA and prior Tribunal rulings). Advance rulings from the Advance Ruling Authority and multiple Tribunal decisions have permitted benefit even where exporting COO used a different tariff code, provided origin rules are satisfied. Interpretation and reasoning: The Tribunal reiterates that classification for levy/exemption is determined under Indian law; an exporting country may legitimately record a different HSN for its own administrative purposes, and such recording on COO does not ipso facto negate entitlement if the importer satisfies origin requirements under the 2009 Rules and the Indian tariff classification supports the claim. The Tribunal notes that exporters in Malaysia have sought to align their COO HSNs, but until such administrative uniformity is mandatory, Indian classification rules prevail. Thus denial of Notification benefit solely because COO mentions 7005 2990 is legally untenable when the imported goods are classifiable under 7005 1090 and origin documentation otherwise complies. Ratio vs. Obiter: Ratio - A COO stating a different HSN does not automatically disentitle an importer to FTA/exemption benefit; entitlement is determined under Indian law and the origin rules. Obiter - Remarks regarding practices and administrative communications from Malaysian authorities are explanatory and illustrative. Conclusions: The appellants are entitled to benefit under the Notification (Sl. No. 934 of Notification No. 46/2011) subject to satisfaction of the origin rules and production of valid COO; denial of exemption merely because COO lists 7005 2990 is set aside. Issue 3 - Challenge to self-assessment, 'protest' payments and appellability of self-assessment Legal framework: Sectional scheme recognizing self-assessment; right of appeal under statutory provisions against 'any order' of assessment; constitutional principle (Article 265) that tax can be levied only by authority of law; established principles that tax cannot be collected by consent and that payment 'under protest' is an accepted legal mechanism to preserve rights pending challenge. Precedent treatment: Reliance on Supreme Court authority affirming that orders of self-assessment are appealable and that a person aggrieved by self-assessment can prefer appeal; reference to Mafatlal and ITC decisions indicating permissibility of contesting liability despite payment under protest; the Tribunal finds Inchek Tyres distinguishable where earlier High Court decision did not consider higher court authority. Interpretation and reasoning: The Tribunal rejects Revenue's contention that an importer cannot question its own self-assessment or cannot 'protest' a self-assessment. Self-assessment has the legal character of an assessment order and is appealable. An importer may realise a mistaken self-assessment later or may have declared a classification under pressure; equity or estoppel cannot be used to extract tax in excess of law. Payment under protest is a valid protective step and not a deceitful practice per se; it preserves time-barred remedies and allows judicial adjudication. The Tribunal also stresses that departmental officers and representatives must act impartially to facilitate fair administration of justice. Ratio vs. Obiter: Ratio - Self-assessments are appealable; an importer can make payment under protest and challenge classification; tax cannot be collected by consent beyond what law permits. Obiter - Remarks on the conduct expected of departmental representatives and broader comments on administrative fairness are advisory. Conclusions: The appeals challenging self-assessed classifications and seeking relief after payment under protest are maintainable; Revenue's objections to such challenges are rejected. Cross-references and final disposition 1. Issues 1 and 2 are interlinked: correct classification under Indian tariff law (Issue 1) is a precondition to entitlement to preferential/exemption benefit under the FTA/Notification even where COO lists a different HSN (Issue 2) - see the Tribunal's reliance on GRI and Chapter Note 2(c) and its application to origin rules. 2. Issue 3 underpins the procedural right of the importer to seek substantive relief on Issues 1 and 2 despite prior self-assessment or payment; statutory and constitutional principles support adjudication. Conclusion: The Tribunal holds that the imported clear float glass with a microscopically thin tin absorbent/non-reflective layer is classifiable under CTH 7005 1090; the importer is entitled to Notification/FTA benefit subject to compliance with origin rules; challenges to self-assessment and payments under protest are maintainable. The impugned reassessments and denials of exemption are set aside. (Ratio summarized above.)