TaxTMI 
TaxTMI 
2024 (5) TMI 943
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....ef facts emerging from this appeal are that the Appellant had imported "Clear Float Glass" (CFG) from Malaysia classifying under CTH 7005 1090 and cleared the same @ Nil rate of BCD availing exemption under Notification No. 46/2011-Cus dated 01.06.2011(Serial No. 934) as the Country of Origin of subject import goods is Malaysia, a country notified for the benefit of ASEAN India Free Trade Area (AIFTA). 2.2 However, the department was of the view that the imported Float Glass is classifiable under CTH 7005 2990 attracting BCD @10% and consequently not eligible for the benefit under Notification No. 46/2011-Cus. dated 01.06.2011. Hence it was alleged that the CFG imported from Malaysia was wilfully mis-classified under CTH 70051090 for the purpose of availing FTA benefit of said Notification, resulting in short levy of applicable Customs duty. 2.3 Accordingly, a Show Cause Notice dated 18.04.2022 was issued to the Appellant proposing :- i. to reject the classification of CFG adopted by the Appellant for the subject imports and to re-classify the same under CTH 70052990 thereby seeking to deny the benefit of Notification No. 46/2011-Cus dated 01.06.2011 ii. to demand diff....
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....ught from the Ministry the Action Taken Note on the said Audit Para by way of information sought under the RTI Act and perusal of the same would reveal that the Ministry has replied both scientifically as well as legally justifying the classification of CFG under CTH 70051090, in their reply to the said Audit Para and the relevant Action Note is reproduced below:- iii. It was submitted that to get classified under Chapter Heading 70051090 of CTH, the CGF shall be a non-wired glass, having an absorbent, reflecting or non-reflecting layer and not tinted. In the instant case, there is no dispute between the importer and department that the CFG imported is a non-wired glass. The CFG has a microscopic tin layer during the manufacturing process and the dispute was only with regard to whether such a layer is an absorbent, reflective or non-reflective layer to merit classification under CTH 7005 10 90 as per Chapter note 2 (c) of Chapter 70 to Customs Tariff Act, 1975. iv. It was pointed out that for the period between November 2018 to June 2019, the entire imports of CFG by the Appellant were provisionally assessed and samples were drawn and tested at CSIR-Central Glass and C....
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....of the test report which proves the presence of absorbent tin layer. In this connection the Appellant made mention of clause (c) and (h) of the test report wherein it was clearly stated that "the tin side is detected under UV illumination using tin detector" and "No absorbent layer is on air side other than the tin layer on the tin side of the glass which is fluorescent under UV illumination". Further it was also referred to an RTI application made to CSIR which clarified that all the float glasses tested by them between 2017 and 17.07.2023 have a tin layer on one side of the float glass which is absorbent and non-reflective. In this regard, the reply dated 17.07.2023 of CSIR, CGCRI, Kolkata is extracted and reproduced below:- Query vide Registration Numben NIL RTI Reg SI No: 423 I am to refer to yöur request for information under RTI Art, 2005, receivëd vide Registration Number:: NIL dated 20/06/2023 and the reply is / are as follöws: 1. How many many number of Test Reports, since the year 2017 have been issued to Indian Customs Department pertaining to testing of Clear Float Glass since 2017 to till date to know whether it Clear Float Glass? Respons....
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....ification under CTH 70051090 and rejected the Department's classification under CTH 70052990 which is squarely applicable to the instant case. x. The Appellant has also relied on the ruling given by Customs Authority for advance Rulings for the identical imports in the case of Chandrakala Associates [2021 (9) TMI 1433-A.A.R Customs, Mumbai] wherein the subject goods were appropriately classified under CTH 7005 1090 which stand was reiterated in the case of Suraj Constructions by the Advance Ruling Authority. The relevant Paragraph of the decision of Advance Ruling Authority is extracted below:- "10. In view of the above discussions, I rule that the subject goods 'Clear Float Glass' with absorbent layer on only one side would merit classification under heading 70.05 and more specifically, under subheading 70051090 of the first schedule to the Customs Tariff Act, 1975. The said imports shall also be governed by the provisions of Notification No. 37/2020-Customs (ADD) dated 11.11.2020 supra, that seeks to impose definitive anti-dumping duty on Clear Float Glass, originating in or exported from Malaysia and imported into India. Further, the benefit of Sr. No.934 of the tabl....
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..... Swastik Coaters Pvt. Ltd. [1999 (107) ELT 533 (Tribunal)] (e) Saurashtra Chemicals Ltd. Vs. CC, Jamnagar [2011 (272) ELT 158 (Tri.-Ahmd.)] (f) CCE, Aurangabad Vs. Videocon Appliances [2009 (235) ELT 513 (Tri.-Mumbai)] (g) CC(Imports), Mumbai Vs. Hindutan Gas & Industries Ltd. [2006 (202) ELT 693 (Tri.-Mum.)] (h) Mac & Megha Agro Equipments (P) Ltd. Vs. CCE, Cochin [2006 (199) ELT 260 (Tri.-Bang.)] (i) Madhus Garage Equipments Vs. CC, Bangalore [2006 (198) ELT 388 (Tri.-Bang.)] (j) Wipro Ltd. Vs. CC, Chennai [2005 (189) ELT 289 (Tri.-Bang.)] xiii. It was averred that the reliance of the Adjudicating Authority in Para 59 of the impugned order, on the decision in the case of Dilip Kumar & Company [2018 (9361) ELT 577 (SC)] is not applicable as the issue involved in this case at hand is classification and not exemption which is distinguishable from the above decision as per which the Hon'ble Court observed that exemption Notification has to be interpreted strictly. xiv. It was contended that the invocation of extended period and the corresponding imposition of penalty is unwarranted in the current proceedings because of the reason that dispute is only based on audit o....
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.... Department affirmed the findings of the lower Adjudicating Authority. He has drawn our attention to the test report of CSIR-Central Glass & Ceramic Research Institute, Kolkata wherein the testing agency has opined that there is no absorbent, no reflective or non-reflective layer on airside. As such, the primary condition for classifying the imported CFG under CTH 70051090 was not satisfied. He has submitted that if the tin layer is treated as the absorbent layer which is inherent of the manufacturing process of every float glass, the words "whether or not having an absorbent, reflecting or non-reflecting layer" will become redundant. He has contended that it is not legal to interpret the tin layer itself as absorbent layer, which is automatically formed in the manufacture process of every float glass. The words "whether or not" used in the heading becomes redundant and such interpretation is not correct as settled by various case laws viz., Rao Shiv Bhadr Singh Vs. The State of VP [AIR 1953, SC 394] and Shri Balaganesan Metals Vs. Shri M.N. Shanmugham Chetty & Others [AIR 1987 SC 1668]. 4.2 He has supported the findings of the Adjudicating Authority, that there is no absorb....
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....mported CFG was confiscable and allowed it to be redeemed on payment of fine of Rs.31 crores. 8.1 The Ld. Advocate for the appellant argued that they have been importing CFG for more than 15 years and have been classifying the CFG under 7005 1090 as the imported CFG are non-wired glass, non-tinted and has a thin TIN absorbent layer on one side of the glass. Manufacturing process of CFG: 8.2 Float Glass is manufactured by float process, a process invented by Sir Alastair Pilkington in 1952. Various raw materials viz., sand, lime, dolomite, soda and sulphate are melted in a furnace at a very high temperature and the raw materials melt into a molten liquid which would be allowed to pass through a shallow bath of a molten tin. Such molten glass, when fed and passed through such float bath of the molten tin, the glass acquires perfect flatness of the liquid pool and later retains the smooth finish of the liquid surface. In the process it also gets imbibed with the layer of such molten tin by its physiological reactions. Thus, during the process of manufacture of CFG itself, one side of the glass will have a resultant metal coating of tin. Thereafter, such molten glass having the m....
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....2 it has been instructed that no SCN should be issued in cases where Department has not agreed with audit objections on merits. Further under Paragraph 4.2 of the said Circular, it was further instructed that where a contested objection has become DAP and on examination it is found by the Commissioner (PAC) or Joint Secretary (Customs) in CBEC that the objection should have been admitted, they may give necessary direction to the field to issue Show Cause Notice and adjudicate the case on merits. In the absence of such a direction given by Commissioner (PAC) to the field to issue SCN or adjudicate the same which makes the SCN void ab initio. It appears that above instructions were further reiterated in Circular No. 1053/02/2017-CX dated 10.03.2017. At this juncture, we wish to observe that these Circulars issued are meant to effectively manage Audit function and purely administrative in nature. It is not understood, how the appellant is arguing that the adjudication proceedings are to be set aside when no prejudice is caused to the appellant as while adjudicating the issues, principles of natural justice have been complied with. 9.1 Before proceeding to determine the appropriate c....
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....eported that the imported CFG sample is having a microscopically thin coating of Metal, namely TIN, and it is an absorbent/non-reflective layer. This fact is also not in dispute in this proceeding. However, the SCN alleges that such absorbent reflective tin layer present in the CFG is obtained by natural phenomena during the manufacturing process and not by way of a separate coating process after manufacture of CFG and hence, the imported CFG would not merit classification under tariff item 70051090. The Ld. Adjudicating Authority has confirmed the above proposition in the impugned order. 9.4 But, the Ld. Advocate argued that as per CTH 7005 to get classified under Chapter Heading 70051090 of CTA, CFG shall be a non-wired glass, having an absorbent, reflecting or non-reflecting layer of metal. The imported CFG is non-wired is not in dispute. Entire dispute centres around whether the imported goods are having an absorbent layer or not in terms of Chapter Note 2(c) of Chapter 70 of the Customs Tariff Act, 1975. As per Chapter Note 2(c) of Chapter 70 what needs to be demonstrated is that the CFG has a "microscopically thin coating of metal or of a chemical compound (for example, met....
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....for domestic clearances and exports. 9.9 We find that Department's insistence of absorbent layer to be only on the air side for its classification under CTH 70051090 was vehemently contested by the counsels for the appellant and they submitted that, neither the tariff heading nor the chapter note provides for a requirement of such coating on any prescribed side and instead, on a plain reading of the tariff entry and the chapter Note 2(c) would only envisage that the CFG should have an absorbent, reflective or non-reflective thin microscopical layer for the purpose of classification under tariff item 70051090, which is very much present and remains undisputed. It was submitted that it is not permitted for the Ld. Adjudicating Authority to add or amend either tariff or chapter notes, to suit revenue's benefit. The above contentions are convincing as in matters of classification, a simplicitor and straight forward approach is paramount unless there is an anomaly. 10. We also note that in the appellant's own case on the very same issue, the co-ordinate bench of this Tribunal at Calcutta vide their Final Order No. 77460-77462/2023 reported in [2023 (11) TMI 485 CESTAT KOLKAT....
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....bject goods are clear float glass, with an absorbent layer, which is fluorescent under UV illumination. The subject goods are not wired, tinted or green in colour. The heading 7005 10 covers non-wired glasses having an absorbent, reflecting or non-reflecting layer and the headings 7005 21 to 7005 29 deal with non-wired glasses which are tinted having absorbent layer, opacified, flashed etc. Therefore, the subject goods are appropriately covered under sub-heading 7005 1090. Based on the applicant's submission about the country of origin and the manufacturer of the subject goods, benefits under sr.no.934 of the table annexed to the exemption notification no.46/2011-Cus., dated 01.06.2011, would be available, subject to the condition that in respect of each case of import, the applicant would have to produce evidence before the Deputy/Assistant Commissioner of Customs as to the origin of subject goods. 8. On the issue of whether the benefit of the said exemption would be available even if the sub-heading mentioned in the COO differs for 70051090, the applicant & their authorized representative were asked to explain the context of the said question. It appears that the subject goods ....
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....pplicant would have to produce evidence before the Deputy/Assistant Commissioner of Customs to substantiate the origin of subject goods. 11. In view of the above discussions, I hold that the subject goods 'Clear Float Glass' having an absorbent layer merit classification under heading 70.05 and more specifically, under subheading 70051090 of the first schedule to the Customs Tariff Act, 1975. The said imports shall also be governed by the provisions of Notification No.37/2020- Customs (ADD), dated 11.11.2020. The benefit of exemption notification no.46/2011, dated 01.06.2011 would be determined in accordance with conditions laid down in the said notification." 23. Further, the Ld. Commissioner(Appeals) in the case of M/s. Asahi India Glass Limited (supra) has examined the issue and observed as under:- "5.4 Now coming to merits of issue, the contesting entries viz 70051010 (as declared by the appellant) and 70052110 (as per the assessing Authority) from the Customs Tariff are reproduced below:- Upto 31.12.2019 7005 Float glass and surface ground or polished glass, in sheets, whether or not having an absorbent, reflecting or non-reflecting layer, but not otherwise worked. ....
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.... not conclusive enough to reject the declared classification by the Appellant. Rather, the said Reports do mention the presence of Layer. The exact findings of some of the Test Reports in this regard are as under:- "c) The Tin Side is detected under UV illumination using the detecter. i) An absorbent layer (Tin) is observed on one side of the glass which is fluorescent under UV illumination. j) The glass is found to be coated with ZnSO4 film on opposite to tin side as protective layer." The Test Reports have clearly established that impugned goods were having absorbent layer (Tin) on one side. This fact is not disputed. Accordingly, I find absolutely no reason to exclude these goods from 700510 & classify them under 700521. Rather, the said goods viz. "Light Green Float Glass/Coloured Float Glass" with absorbent Layer of Tin on one side would merit classification under Sub-heading 7005 and more precisely under CTH 7051010." 24. As from the facts of the case, it is clear that the Clear Float Glass imported by the appellant are absorbent and having non-reflecting layer, in that circumstances, the appellant has qualified the merit classification under CTH 7005 1090, therefor....
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....aiming classification under tariff item 7005 1090 and there was never a dispute in this regard except for the proceedings initiated in view of the CRA objection raised. Further, he submitted that even after the CRA objection, for the period from November 2018 to June 2019, the entire imports of CFG vide 61 Bills of Entry made by the appellant were provisionally assessed and samples were drawn and tested and based on these test reports the CFG were finally assessed under CTI 7005 1090 as communicated vide Letter F.No.S.MISC.292/2018-GR-3 dated 26.02.2020 of Custom House, Chennai. The Ld. Advocate has raised another plea that even if the imported goods are classified under 7005 2990 as classified by the Department and CRA, they are eligible for partial exemption in terms of Notification No. 46/2011-Cus. dated 01.06.2011 which reads as below:- S. No. Chapter, Heading, Subheading and Tariff item Description Rate (in percentage unless otherwise specified) (1) (2) (3) (4) (5) 934 70010020 to 70051090 All Goods 0.0 0.0 935 700521 to 700530 All Goods 5.0 5.0 Even if the imported goods are classifiable under CTH 7005 2990 as above the applicable rate of duty ....