2025 (10) TMI 1088 - AT - Customs

Imported clear float glass with absorbent non-reflecting layer classified under CTH 7005 1090; NIL BCD under Sl. No. 934 upheld

CESTAT KOLKATA - AT held that imported clear float glass with an absorbent, non-reflecting layer is properly classified under CTH 7005 1090. Test reports ... Classification of imported clear float glass with an absorbent layer - to be classified 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 01.06.2011 - HELD THAT:- It is observed that the appellant has imported the goods, ‘Clear Float Glass Non Wired Glass, Non Tined, Having an Absorbent, Non Reflecting layer of various sizes and thickness’ and filed Bill of Entry No. 2680938 dated 30.09.2022. The appellant classified the said goods under CTH 7005 1090 and claimed the benefit of Sl. No 934 of notification No 46/2011- Cus dated 01.06 2011. However, the Proper Officer did not agree with the classification adopted by the appellant and re-classified the same under CTH 7005 2990 and applied Sl. No. 935(i) of N/N. 46/2011-Cus dated 01.06.2011, which provided for 5% BCD - a float glass having an absorbent layer merits classification under heading 7005 1090. There is no dispute in this case the float glass imported by the appellant has an absorbent layer. It is immaterial whether the absorbent layer has come on account of manufacturing process or otherwise. The test report received in the case of the goods imported by the appellant established that the float glass imported by the appellant has an absorbent layer. Accordingly, the goods imported by the appellant in this case appropriately merits classification under the CTH 7005 1090 and eligible for the benefit of Sl. No. 934 (1) of N/N. 46/2011 dated 01.06.2011. A similar issue came up for consideration before the Commissioner of Customs (Appeals), New Delhi in the case M/s. Asahi India Glass Limited. The Commissioner (Appeals) held that the declared classification in respect of clear float glass under CTH 7005 1090 was correct. Thus, the classification of the impugned goods under the heading 7005 1090 adopted by the appellant is correct and the impugned goods are eligible for the benefit of Sl. No 934 of N/N. 46/2011-Cus dated 01.06 2011. Thus, the demand of differential duty confirmed in the impugned order on account of reclassification of the impugned goods under the CTH 7005 2990, by denying the benefit of Sl. No. 934 of N/N.46/2011-Cus dated 01.06.2011, is not sustainable and hence the same is set aside - As the demand of duty is not sustained, the question of demand of interest and imposition of penalty does not arise and hence the same is set aside. The impugned order is set aside - appeal allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether clear float glass 'having an absorbent, non-reflecting layer' is classifiable under heading 7005 10 90 (other non-wired float glass having an absorbent, reflecting or non-reflecting layer) or under heading 7005 29 90 (other float glass) when the absorbent layer is a tin layer formed during the float glass manufacturing process. 2. Whether the origin of the absorbent layer (i.e., whether it is inherently formed in manufacture or applied subsequently) affects classification under heading 7005 10 90. 3. Whether, on accepted classification under heading 7005 10 90, the goods are eligible for the concessional benefit under the specified entry of the notification granting NIL basic customs duty. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Legal framework: Applicable tariff headings describe heading 7005 as 'FLOAT GLASS ... WHETHER OR NOT HAVING AN ABSORBENT, REFLECTING OR NON-REFLECTING LAYER,' with subheading 7005 10 directed to 'Non-wired glass, having an absorbent, reflecting or non-reflecting layer' and 7005 10 90 as 'Other.' Classification is governed by the descriptive scope of these headings. Issue 1 - Precedent treatment: The Tribunal noted earlier administrative decisions where similar float glass with a tin layer was held classifiable under the heading for float glass having an absorbent layer. The impugned appellate authority had taken a contrary technical finding that the tin layer, being an inherent product of the float process, could not be treated as an 'absorbent layer' for classification. Issue 1 - Interpretation and reasoning: The Tribunal examined the heading text which expressly contemplates float glass 'having an absorbent ... layer.' The determinative question is factual: whether the product possesses an absorbent layer. Technical provenance of the layer (inherent or applied) is not stipulated by the heading. The Tribunal found no legal basis in the heading to exclude layers that result from the manufacturing process. Issue 1 - Evidence and expert treatment: The Tribunal placed decisive weight on independent technical analysis by a scientific institute which (a) identified a tin layer on one side of the tested float glass and (b) certified that the tin layer functions as an absorbent, non-reflective layer. The Tribunal observed the impugned appellate authority's contrary technical finding lacked expert backing; by contrast the institute's report constituted admissible and persuasive expert evidence supporting classification under 7005 10 90. Issue 1 - Ratio vs. Obiter: Ratio: The product-specific conclusion that float glass possessing an absorbent tin layer (irrespective of whether that layer is formed inherently during manufacture) falls within heading 7005 10 90. Obiter: References to other appellate orders finding similarly are persuasive but not essential to the Tribunal's factual determination where independent expert evidence exists. Issue 1 - Conclusion: The Tribunal concluded that clear float glass with an absorbent tin layer is classifiable under heading 7005 10 90; the impugned technical finding excluding the tin layer as 'absorbent' was not supported by expert opinion and was therefore rejected. Issue 2 - Legal framework and interpretation: The Tribunal analyzed whether the source or mode of formation of the absorbent layer affects heading application. The plain language of the tariff headings addresses the presence of an absorbent/reflecting/non-reflecting layer, not its origin. The Tribunal held that the manufacturing origin of the layer is immaterial to classification so long as the functional characteristic (absorbent, non-reflective) exists. Issue 2 - Precedent treatment and reasoning: Administrative orders cited by the appellant and considered by the Tribunal treated similar manufactured tin layers as absorbent layers for classification purposes. The Tribunal aligned with those treatments, emphasizing that the legal test is the characteristic of the goods rather than the manufacturing genesis of that characteristic. Issue 2 - Ratio vs. Obiter: Ratio: The origin of an absorbent layer (inherent or applied) does not preclude classification under a heading for goods 'having an absorbent ... layer' if the layer exhibits the requisite property. Obiter: Technical manufacturing details were discussed only to refute the impugned authority's reliance on such details without expert support. Issue 2 - Conclusion: The Tribunal held that it is immaterial whether the absorbent tin layer arises due to the float glass manufacturing process; classification depends on the presence and functional nature of the layer. Issue 3 - Concessional notification entitlement: Legal framework: The relevant notification entry confers NIL basic customs duty for goods classifiable under the heading when imported from specified countries. Having determined classification under 7005 10 90, entitlement to the notification benefit follows subject to meeting origin and other notification conditions. Interpretation and reasoning: The Tribunal found the imported goods met the descriptive requirements of heading 7005 10 90 and relied on the expert test report confirming the absorbent tin layer. Consequently the goods qualify under the specified notification entry for concessional duty treatment. Ratio vs. Obiter: Ratio: Correct classification under 7005 10 90 gives rise to entitlement to the NIL duty benefit under the stated notification entry. Obiter: Discussion of comparable departmental appellate decisions is persuasive corroboration but not essential to the entitlement determination. Issue 3 - Conclusion: The Tribunal allowed the appeal, set aside the demand based on reclassification to 7005 29 90 and denial of notification benefit, and held that differential duty, interest and penalty demands based on that reclassification were unsustainable. Cross-references: The Tribunal cross-referenced the technical report as the principal factual foundation for concluding both (i) presence of an absorbent, non-reflecting tin layer and (ii) entitlement to classification and the notification benefit; it also noted consistent administrative orders reaching similar classifications as supportive authority.