TaxTMI 
TaxTMI 
2024 (8) TMI 1346
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....tated the facts in this appeal are that the Appellant had imported "Clear Float Glass" (CFG) from Malaysia and other ASEAN countries classifying them 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). Some of the imports were provisionally assessed at the time of imports and subsequently, based on test reports by CSIR-CGCRI, Kolkata final assessment was made classifying the goods under CTH 70051090. However, during the course of audit conducted by Customs Revenue Audit (CRA), it was pointed out that the imported Float Glass is more appropriately classifiable under CTH 7005 2990 attracting BCD @10% and so 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 undue FTA benefit of said Notification, resulting in short payment of applicable Customs duty. 1.3 Accordingly, a Show Cause Notice date....
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.... --- Tinted m^2 10% - 7005 10 90 7005 21 --- - -- Other Other non-wired glass : Coloured throughout the mass (body tinted) m^2 10% - 7005 21 10 --- opacified, flashed or merely surface ground : Tinted m^2 10% - 7005 21 90 --- Other m^2 10% - 7005 29 -- Other : 7005 29 10 --- Tinted m^2 10% - 7005 29 90 --- Other m^2 10% - 7005 30 - Wired glass : 7005 30 10 --- Tinted m^2 10% - 7005 30 90 --- Other m^2 10% - To get imported CFG classifiable under CTH 7005 1090, the CFG shall be non-wired glass having an absorbent, reflecting or non-reflecting layer and not tinted. As there was no dispute regarding CFG being non-wired, it would suffice to establish that CFG is having an absorbent, reflecting or non-reflecting layer to get it classified under CTH 70051090. It was submitted that as far as absorbent layer is concerned, in terms of Note 2 (c) to Chapter 70, the tariff itself explains what an absorbent, reflecting or non-re....
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....the decision of the Hon'ble Apex Court in the case of Commissioner of Central Excise, Bhopal Vs. Minwool Rock Fibres Ltd. [2002 (278) ELT 581 (SC)] wherein it was held that when there were two competitive entries in a classification dispute, an entry which is beneficial to the assessee requires to be applied. In this regard the findings in Para 48 of the impugned order relying on the decision of Hon'ble Supreme Court in the case of Novopan Limited holding that the exemption notification had to be strictly construed and in case of any doubt benefit should go to the state (Revenue), was on different facts as there was no ambiguity in the exemption Notification in the instant case. Further reliance was placed on the decisions in the case of S.G. Glass Works Private Limited [1994 (74) ELT 775 (SC)], Ballarpur Industries Limited [2000 (116) ELT 312 (Tribunal)] and Sony India Private Limited [2019 (37) ELT 1774 (Tri.-Del.)]. (iii) It was averred that the findings in Para 42 of the impugned order relying on a test report dated 24.02.2022 of CGCRI in respect of Bill of Entry no.6613260 dated 10.12.2021, was misplaced, as the clarification sought for after five years of import was ....
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....)] and Union of India & Ors. Vs. Garware Nylons Ltd. [1996 (87) ELT 12 (SC)] wherein it was held that the department has to adduce proper evidence and discharge the burden of proof whenever Department intends to re-classify the goods under a heading different from that declared by the assessee. (vii) It was submitted that the entire allegation of mis-classification was based on an audit para (DAP 83 of audit report No.17/2020)and in this regard reference was invited to Para 5 of Circular No. 1023/11/2016-CX dated 08.04.2016 issued by the Central Board of Excise and Customs (CBEC) as per which the adjudication of admitted DAP/AP's should be undertaken after ensuring that the reply given by the Ministry (CBEC )is available on record and in the instant case no such reply was made available on record. In this connection, it was further submitted that the Appellant had applied for and sought for the Ministry's Action Taken Note on the said audit para by way of information sought under RTI ACT and perusal of the same revealed that the Ministry had replied in detail legally justifying the classification of CFG under CTH 70051090 as tabulated below:- (viii) It was contend....
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.... Steel Authority of India Ltd. Vs. Commissioner of Central Excise, Calcutta [1985 (22) ELT 487 (Tribunal)] maintained in Supreme Court [1991 (51) ELT A42 (SC)] ii. Inarco Ltd., Bombay Vs Commissioner of Central Excise, Bombay [1987 (31) ELT 469 (Tribunal) affirmed in [1996 (87) ELT 3 (SC)] iii. Indian Oxygen Ltd. Vs. Commissioner of Central Excise [1990 (47) ELT 449 (Tribunal)] affirmed in [1991 (51) ELT A36 (SC)] iv. Commissioner of Central Excise Vs. Swastik Coaters Pvt. Ltd. [1999 (107) ELT 533 (Tribunal)] (xi) It was submitted that the impugned order had re-opened the assessments which were already finalised, for re-classification without any challenge made against the already finalised Bills of entry. In this regard reliance was placed on the following judgements:- i. Saurashtra Chemicals Ltd. Vs. Commissioner of Customs, Jamnagar [2011 (272) ELT 158 (Tri- Ahmd.)] ii. Commissioner of Central Excise, Aurangabad Vs. Videocon Appliances [2009 (235) ELT 513 (Tri.-Mum.)] iii. Commissioner of Customs (Imports) Mumbai Vs. Hindustan Gas & Industries Ltd. [2006 (202) ELT 693 (Tri.-Mum.)] iv. Madhus Garage Equipment....
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....served that exemption Notification has to be interpreted strictly and in this regard reliance was placed on the decision of the Hon'ble Tribunal, Delhi in the case of Sony India Pvt. Ltd.-2019(370)ELT 1774(Tri-Del.) wherein the above decision in the case of Dilip Kumar was distinguished. (xiv) The Appellant has relied on the following decisions to stress that confiscation is legally not sustainable as the subject imports were not seized and not available. a. Northern Plastic Ltd. Vs. Collector of Customs, Central Excise [1998 (101) ELT 549 (SC)] b. Satron Vs. Commissioner of Customs [2020 (371) ELT 565 (Tri.-Mumbai)] c. Raja Impex Pvt. Ltd. [2008 (229) ELT 185 (P&H)] d. Shiv Kripa Ispat Pvt. Ltd. [2009 (235) ELT 623 (Tri. LB)] and the appeal filed by Department dismissed by the High Court, Bombay [2015 (318) ELT A259 (SC)] e. Finesse Creation Inc [2009 (248) ELT 122 (Bom.) and the appeal against the decision was dismissed by the Hon'ble Supreme Court [2010 (255) ELT A120 (SC)] f. Sudarshan Cargo Pvt. Ltd. [2010 (258) ELT 197 (Bom.)] The findings in Para 60 of the impugned order that imposition of fine is justif....
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....that the impugned order relied on the test report dated 24.02.2022 of CGCRI without drawal of samples. In view of the submissions and relied upon case laws, the Counsels prayed to dismiss the impugned order. 4.1 The Ld. Authorised Representative Shri P. Narasimha Rao representing the Department have 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, it was stressed that 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 manufacturing process of every float glass. 4.2 He has supported the findings of the Adjudicating Authority, tha....
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....ment itself was of the view that the CFG is rightly classifiable under CTH 70051090, the action initiated by the Department appears to be contrary to its earlier stance maintained before the CAG. 9. It has been argued that the only requirement for CFG to get classified under 70051090 is that the CFG shall have an absorbent reflecting or non-reflecting layer, which is undisputedly present in the instant case and the same, is evidenced by test reports issued by the notified Government Agency viz., CSIR-CGCRI. Further, a reference was made to an RTI application addressed to CSIR wherein it was clarified that all the float glasses tested for Customs by them has a tin layer on one side of the float glass which is absorbent and non-reflective as per the test report of the said Agency. 10. We find that the issue of classification of CFG is no more res integra since the issue and identical arguments submitted by litigants were already elaborately dealt with in the Orders of the Kolkata Tribunal vide [Final Order Nos. 77460-77462/2023 dated 03.11.2023] and Chennai Tribunal vide [Final Order No. 40352/2024] in the case of M/s. Bagrecha Enterprises Ltd. Vs. Commissioner of Custom, Chenn....
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....Tin Side". Further it is an undisputed fact in this proceeding that the imported CFG are non-wired and non-tinted. This leaves us to ascertain whether such microscopically thin Tin Coating appearing on the TIN side is an absorbent, reflecting or non- reflecting layer to get classified under Tariff item 7005 1090. 9.3 It is already on record that the Department have drawn samples and tested the same with the Government notified laboratory namely CSIR-CGCRI, Kolkata which had reported 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 ....
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....ation made to CSIR wherein it was clarified that all the float glasses tested for Customs by them since 2017 till 17.07.2023 has a tin layer on one side of the float glass which is absorbent and non-reflective. [CSIR-Central Glass and Ceramic Research Institute's letter dated 17.07.2023. (Page No. 43 of Synopsis filed)] 9.8 He also submitted that, identical goods manufactured by domestic manufacturers viz., Saint Gobain have also classified the goods under CTH 7005 1090 and assessed accordingly both 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 su....
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....f M/s. Suraj Constructions (supra), the Advance Ruling Authority has examined the issue and observed as under:- "7. I have considered all the materials placed before me for the subject goods. I have gone through the submissions made by the applicant during personal hearing and the comments of the jurisdictional Principal Commissioner/Commissioner of Customs, on the impugned subject matter. The subject goods for which advance ruling has been sought, their characteristics, manufacturing process, utility etc. are already mentioned in the aforementioned paras. The subject 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....
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....not green in colour. The heading 7005 10 covers nonwired glasses having an absorbent, reflecting or non-reflecting layer and the headings 7005 21 to 7005 29 deal with non-wired glasses which are body tinted, opacified, flashed etc. Therefore, the subject goods should more appropriately be covered under sub-heading 7005 1090. While prima facie, based on the applicant's submission about the country of origin and the manufacturer of the subject goods, exemption notification no.46/2011-Cus., dated 01.06.2011, appears to be available, in terms of the said notification, in each case of import the applicant 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 d....
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....H 700521 covers glass which may or may not have absorbent or reflecting or non- reflecting layer. The Adjudicating Authority has contended that the impugned goods are coloured through out body (i.e. body tinted) and thus covered by CTH 700521 and articles of CTH 700521 may or not have absorbent/reflecting layers. This interpretation itself is erroneous in light of scheme of CTH under 7005 and explanation given in 5.4.3 above. 5.4.5. It is settled position of law that burden of proof of classification is on the Department. The classification has been changed on the basis of Test Reports. I have carefully going through the copies of Test Reports from CGCRI, Kolkata. I find that said Test Reports are 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 ....
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....nt's own case where facts are identical, we hold that the impugned Order-in-Original No. 101620/2023 dated 11.04.2023 cannot be sustained and so ordered to be set aside. 12. As such, we confirm the classification of the imported CFG under tariff item 7005 1090 and consequently, the appellants are rightly entitled for the benefit of Sl.No. 934 of Notification No. 46/2011-cus., as claimed by them subject to fulfilment of production of valid Customs Tariff (Determination of Origin of Goods under the Preferential Trade Agreement between the Government of Member States of ASEAN and Republic of India) Rules, 2009." 11.1 On the issue of invocation of extended period, we have considered the Ld. Counsel's submissions that the appellant has been importing Clear Float Glass for a long time by claiming classification under Tariff item 7005 1090 and there was no dispute in this regard except for the proceedings initiated in view of the CRA objection raised. It has been submitted that even after the CRA objection for period under dispute, the provisional assessments were finalised allowing the classification under CTH 7005 1090. In the absence of any finding of positive suppression b....
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....riff Act, 1975 and thus is eligible for exemption of the benefit of the Notification No. 46/2011-Cus dated 01.06.2011 (Sl.No. 934) and the impugned Order-in-Original No. 102161/2023 dated 05.06.2023 is ordered to be set aside. 13. Consequently, the appeal filed by the appellant is allowed with consequential relief, if any, as per the law. (Order pronounced in open court on 23.07.2024) ============= Document 1 Verification comments on Ministry's Action Taken Note on Audit Para No. 4.10.1 (DAP 83) Audit Report No.17 of 2020 SL. Audit Para 12 No No. and subject. 4.10.1 Clear Float Glass misclassified as 'non 4.10.1 Gist of Para Clear float glass misclassified as 'non wired glass'. Clear float glass is transparent and offers high visible light transmittance. It does not have any wired glass'. absorbent, reflective layer and is classifiable under CTH 70052990 as Other non-wired glass attracting BCD at the rate of 5 per cent (notification no.46/2011-cus, Sl.no.935) when imported from ASEAN countries. M/s K Enterprises Limited and 19 other firms imported (April 2017 to March 2018) float glass' (249....
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....r which prevents light from being reflected on the surface of the glass". The purpose of the above Chapter Note indicates the intention of the legislature to bring clarity as to the type of glass covered by the term absorbent, reflecting or non-reflecting layer" and the purpose for which such type of glass is used, ie., which absorbs, for example, infra-red light or improves the reflecting qualities of Document 2 notification. On this being pointed per GRI 6, for legal purposes, the out (July August 2018), the classification of goods in sub-headings of Customs authorities, Cochin stated a heading shall be determined according to (September 2019) that the terms of those sub - headings and any 1/36202/2021 the composition of related subheading notes... "The terms of the glasses was soda lime silica heading 7005 read as " float glass and based glass containing other minor surface ground or polished glass in shects , components. The glass surfaces whether or not having an absorbent, are not polished, not tinted, non-reflecting or non reflecting layer but not wired and not specified. The otherwise worked". T....
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....the product "Clear float glass" does not covers glass which is subject to coating as specified in the Chapter note. Clear float glass means "CLEAR" as understood by those using the product and not COATED. Whereas the popular meaning of Glass which is coated as specified in the Chapter note is generally understood by those using the product as "coated glass". (i) The department has not disputed the fact that the item description in the Bills of Entry mentioned in the TA Document 3 tin side and other side as the air side. All glass manufactured under float process, (clear, coated or tinted) invariably would contain a layer of tin on one side, which does not mean that all float glass is to be classified under 70051090. (b) Further, test reports also revealed neither the chapter notes to Chapter 70 of Memos were "Clear float glass" and the Customs Tariff nor the explanatory not "Float glass having an absorbent notes issued by the World Customs reflecting or non-reflecting layer" or Organization stipulate any specific "coated glass". The presence of process for the production of the coating absorbent, reflec....