TaxTMI 
TaxTMI 
2024 (8) TMI 1349
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....levied under Section 114 A of Act ibid. 1.2 Brief facts of this appeal are that the Appellant had imported "Clear Float Glass" (CFG) from Malaysia 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). In total, during the period from October, 2017 to March, 2022, 89 imports were made by the appellant of Clear Float Glass of Malaysian origin. Most of these imported consignments were provisionally assessed at the time of imports and subsequently, based on test report by CSIR-CGCRI, Kolkata, assessments were finalised classifying the goods under CTH 70051090. However, during the course of audit conducted by Customs Revenue Audit (CRA), it was noticed 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....
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..... It was submitted that the imported goods were rightly classifiable under CTH 70051090 and the benefit of exemption Notification No. 46/2011-Customs was correctly availed of by them adverting to CTA and HSN as under: - 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 700510 - Non-wired glass, having an absorbent, reflecting or non-reflecting layer : 70051010 --- Tinted m^2 10% - 70051090 --- Other m^2 10% - - Other non-wired glass : 700521 -- Coloured throughout the mass (body tinted), opacified, flashed or merely surface ground : 70052110 --- Tinted m^2 10% - 70052190 --- Other m^2 10% - 700529 -- Other : 70052910 --- Tinted m^2 10% - 70052990 --- Other m^2 10% - 700530 - Wired glass : &nb....
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.... (66) ELT 37 (SC)], Commercial Taxes officer Vs. Bombay Machinery Stores [2020 (36) GSTL 161 (SC)], Union of India Vs. Dharmendra Textile Processors, [2008 (231) ELT 3 (SC)] and Commissioner of Income Tax-III Vs. Calcutta Knitwear [2014 (362) ITR 673 (SC)]. iv. It was submitted that CTH7005 29 being a residual entry, any CFG shall be classified under that CTH only if they were not covered under any specific entry under CTH7005 and in this regard pointed out that as per Rule 3(a) of the general Rules of Interpretation of the harmonised system, headings providing specific description shall be preferred to heading providing general description. Reliance was placed in this regard on the decisions in the case of M/s. Bharat Forge & Press Industries Pvt. Ltd. Vs. CCE [1990 (1) TMI 70-SC], HPL Chemicals Ltd. Vs CCE, Chandigarh [2006 (4) TMI 1 (SC)], Metals and Ferro Alloys Ltd., Cuttack Vs. Collector of Central Excise, Bhubaneshwar, [1991 (1) SCC 125], Mauri Yeast India Pvt. Ltd. vs. State of Uttar Pradesh [2008 (5) SCC 680], Dunlop India Ltd. Vs. Union of India & Others [1976 (2) SCC 241] and M/s. Aalayam Traders Vs. The Appellate Assistant Commissioner (CT), Puduchery, [2019 (7....
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....etals & Tubes Ltd. [2016 (331) ELT A89 (SC)], CCE Vs. Chemphar Drugs & Liniments [1989 (040) ELT (276) SC] and Continental Foundation Jt. Venture Vs. Commissioner of Central Excise, Chandigarh-I [2007 (216) ELT 117 (SC)]. vii. It was contended that interest under Section 28AA and penalty under Section 114AA are not leviable/ imposable when the duty demanded itself is unsustainable in view of the decisions in the case of Pratibha Processors Vs. Union Of India [1996 (88) ELT 12 (SC)] and Commissioner of Customs Vs. MMK Jewellers & Anr. [2008 (225) ELT 3 SC]. Further, it was averred that there was no reasonable ingredient for imposing penalty under Section 114A when suppression/ wilful misstatement/collusion could not be proved to exist in view of the decision off the Apex Court in Sun Microsystems India Pvt. Ltd. Vs. Commissioner of Customs, Bangalore [2016 (339) ELT 475 (Tri.-Bang.)] viii. It was argued that the goods were not liable for confiscation under Section 111 (m) as there was no mis-declaration pursuant to the claim of classification and exemption made by the Appellant. In this regard reliance was placed on the ratio of the decisions in Northern Plastic Lt....
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....Customs in Customs Appeal no. 40514/2023 and advance rulings in CAAR/MUM/ARC/10/2022 dated 10.05.2022 in the case of M/s. Suraj Constructions and CAAR/MUM/ARC/36/2021 dated 24.09.2021 in the case of M/s. Chandrakala Associates. 3.2 The Ld. Counsel contended that the Show Cause Notice and the impugned order were due to CRA Audit objection which was unwarranted as the Ministry of Finance itself refuted the findings of the CRA Audit. It was averred that neither the SCN nor the impugned order brought forth any contumnacious act of the Appellant showing mis-statement with an intent to evade payment of duty, when the Appellant had been importing CFG for many years adopting CTH 70051090. 3.3 The Ld. Counsel further referred to RTI response of CGCRI-CSIR in relation to a similar finding in the case of M/s. Bagreecha Industries cited supra, wherein the presence of an absorbent and non-reflecting layer on the CFG was confirmed which justified the classification under CTH 70051090. 4.1 The Ld. Authorised representative Shri R. Rajaraman representing the Department affirmed the findings of the Lower Adjudicating Authority. He has drawn our attention to the test report of CSIR-Central ....
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....f Origin (COO) in terms of 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. The department, based on an audit objection, rejected the classification declared by the Appellant and re-classified the imported goods under CTH70052990 denying the benefit of Notification cited supra which culminated in the issuance of a SCN and the impugned order dated 09.06.2023. The Ld. Advocate for the appellant argued that they have been importing CFG for many 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. In support of their contention that the imported Clear Float Glass has satisfied the condition of Chapter Note 2(c) to Chapter 70 of Customs Tariff Act, 1975 of having an absorbent reflecting or non-reflecting layer, the appellant has relied on the test report given by CSIR-Central Glass & Ceramic Research Institute, Kolkata which reads as follows : - The above Report clearly indicates that the imported Clear Float Glass is a non-wired glass and not tint....
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....% - 70051090 --- Other m^2 10% - - Other non-wired glass : 700521 -- Coloured throughout the mass (body tinted), opacified, flashed or merely surface ground : 70052110 --- Tinted m^2 10% - 70052190 --- Other m^2 10% - 700529 -- Other : 70052910 --- Tinted m^2 10% - 70052990 --- Other m^2 10% - 700530 - Wired glass : 70053010 --- Tinted m^2 10% - 70053090 --- Other m^2 10% - Chapter Note 2(c) to chapter 70 read as follows:- "2. For the purposes of headings 7003, 7004 and 7005 : (a) glass is not regarded as "worked" by reason of any process it has undergone before annealing ; (b) cutting to shape does not affect the classification of glass in sheets ; (c) the expression "absorbent, reflecting or non-reflecting layer" means a microscopically thin coating of metal or of a chemical compound (for example, metal oxide) which absorbs, for exa....
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....has further submitted that it is evident from the manufacturing process explained above as well as the test report referred above, that the CFG is having a microscopically layer of metal, namely tin, which is an absorbent/non-reflective layer as contemplated in the above referred Chapter note, and it was an admitted fact in Paragraphs 11 and 12 of the Show Cause Notice. 9.6 It was further contended that though the Ld. Adjudicating Authority accepts that CFG has an absorbent layer of tin on one side, he proceeds to give a finding that such layer of tin is not the result of applying any coating on the CFG but of a natural phenomena in the manufacture of CFG which inevitably introduces tin by thermal diffusion into one side of the glass. In other words, the Ld. Adjudicating Authority tows the audit objection of CRA that the absorbent reflecting or non-reflecting layer is available only on the tin side of the CFG and not on the air side of the CFG. 9.7 The advocate would submit that, neither the tariff heading nor the Chapter Note warrants nor mandates that the absorbent reflecting or non-reflecting layer shall be on which side of the CFG. In other words, the only req....
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.... and the manufacturing process, it can be inferred that CFG would have microscopical layer of metal, namely tin, which is an absorbent layer as contemplated under the above said Chapter Note 2(c). Hence, the correct classification of the impugned goods is under CTH 7005 1090 of Customs Tariff Act. 17. We further find that the manufacturers in India of the identical goods namely M/s. Saint-Gobain India Pvt. Ltd., M/s. Goldplus Float Glass are manufacturing and clearing CFG under CTH 70051090 of the CTA and the same has been accepted by the department. 18. We further find that the impugned proceedings were initiated against the appellant on the basis of Audit Para holding that the Float Glass invariably a layer of Tin on one side, which does not mean that all Float Glass to be classifiable under 7009 1090. 19. We find that the appellant sought reply under RTI dated 17.07.2023, wherein the question was raised that it is observed that in some of the Report, no other layer other than Tin layer is found on one side of the Glass which is fluorescent is mentioned. Whether such layers are reflective or not reflective and whether such layers are absorbent or not? ....
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....the Director of Trade and Industry Cooperation, Ministry of International Trade and Industry (MITI, hereinafter), stating that they had been requesting the clear float glass exporters to provide an advance ruling/document of the Government of India or from Royal Malaysian Customs confirming the correct HS code. It appears that M/s. Kibing Group (M) Sdn. Bhd. has obtained a letter from the Royal Malaysian Customs dated 12.03.2021 confirming the classification of clear float glass under HS code 7005.10.09, and therefore, MITI has allowed KGM to apply for a COO with exporting and importing HS code of 70051090. This letter goes on to state that unless M/s. Xinyi produces a similar document, their application with different exporting and importing tariff code cannot be approved." 22. Further, in the case of M/s. Chandrakala Associates (supra), again the Advance Ruling Authority has examined the issue and observed as under:- "10. 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. In the absence of any comment from the jurisdictional Principal Commissioner/Commissi....
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.... 70051090 --- Other . - Other non-wired glass; 700521 -- Coloured throughout the mass (body tinted) opacified, flashed or merely surface ground: 70052110 --- Tinted. It is pertinent to mention that w.e.f. 01.01.2020 (as amended vide Finance Act, 2019 and made applicable as per Notfn.89/2019-Cus (N.T.), dated 10.10.2019), the sub-heading700521 was amended to read as under:- "....Coloured throughout the mass (body tinted), opacified, flashed or merely surface ground.". Thus, specifically a comma was inserted in the said sub-heading. The said amendment was not given retrospective effect. 5.4.1 Chapter Note 2 of chapter 70 is reproduced below - "2. For the purposes of headings 7003, 7004 and 7005: (a) ............................ (b) .......................... (c) The expression "absorbent, reflecting or non-reflecting layer' means a microscopically thin coating of metal or of a chemical compound (for example, metal oxide) which absorbs, for example, infra-red light or improves the reflecting qualities of the glass while still allowing it to retain a degree of transparency or translucenc....
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.... therefore, we hold the correct classification of the Clear Float Glass imported by the appellant under the impugned Bills of Entry is classifiable under CTH 7005 1090. Consequently, the appellant is entitled for benefit of Sl. No. 934 (I) of Notification No. 46/2011-CUS dated 01.06.2011 25. In view of this, we conclude that the impugned orders deserve no merit, hence, the same are set aside and the appeals are allowed with consequential relief, if any." 11. In the instant case, a conjoint reading of the Tariff Heading, relevant Chapter Note, test reports and the manufacturing process would establish that there is a thin TIN layer which is absorbent and non-reflective answering the tariff heading/chapter note in the affirmative, thus meriting classification under tariff item 70051090. As rightly contested by the appellants, there is no legal prescription as to which side of the CFG should have such an absorbent, reflective/non-reflective layer. We are unable to persuade ourselves with the Revenue's contention which is based on contested CRA objection that the presence of metal layer should be by way of conscious coating and on the "Air Side" of the CFG. It is rele....
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....allegation of wilful misclassification and intention to evade duty by the appellant is not at all tenable and misclassification could not be equated with misdeclaration within the meaning of Section 28 (4) of the Customs Act, 1962 as it is a settled law that once the goods are correctly described, the bona fide adoption of classification by the importer cannot be equated with misdeclaration as the importers are not expected to be fully conversant with the schedule to the Customs Tariff Act, 1975. In respect of this contention, the Ld. Counsel has relied on the cases of Northern Plastic Ltd. Vs. Collector of Customs & Central Excise [1998 (101) ELT 549 (SC)] and M/s. Miot Hospitals P. Ltd. Vs. Commissioner of Customs, [2023 (9) TMI 464-CESTAT Chennai]. 11.2 From the above facts, we find that the issue has been very much in the know of the revenue as the Department itself was of the view that the CFG is rightly classifiable under CTH 70051090 as identical imports of CFG were initially assessed provisionally in terms of Section 17 of the Customs Act, 1962 and were later finalised after the receipt of the test report from CGCRI-CSIR. The Department which was of the view that the CFG....
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.... January, 2019 1667 To Office Of The Commissioner of Customs Deputy Commissioner (Group-3) Custom House No. 60, Rajaji Salai, Chennai-600 001. Sub: Testing of Sample under B/E. No. 8624044, dt. 26.10.2018 - Dear Sir, Enclosed please find the Test Report (No. GC/3069/TCC/3343-3344/18-19 dated 31.01.2019) of the above mentioned sample, carried out vide your F. No. S.Misc 291/2018-Gr.3, Dt: 28.11.2018. Kindly acknowledge the receipt of the above. Thanking you, End: as above T. Is Swaglike Clubs traders. Formfor CHAIC Yours sincerely, टांसीसी / TCC CSIR. - 700032 (Omprakash Chakrabarti) 3 å· MATION Phone: Director: +91 33 2473 5829, Ofice: 2473 3469/76/77/96; 2483 1340-46,2483 7349-50 DID Lines: 2483 8079/8082 Fax: (033) 2473 0957,2473 6032,2483 7339,2483 8085 Email: [email protected] Website: www.cgari.res in Document 2 - सीà¤à¤¸à¤†à¤ˆà¤†à¤° केनà¥à¤¦à¥à¤°à¥€à¤¯ काà¤à¤š à¤à¤µà¤‚ सिरामिक अनà¥à¤¸....
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.....00 ICP-AES Volumetry traces Continue2 DO unes. 2483 8079/8082 Fax: (033) 24730952.2473 6082 246372184835 Email: ciir [email protected] Phone fata Director: +91 33 2473 5829, Office: 24733469/76/77/98; 2483 7340-46,2483 7349-50 Website: www.cgcri.res in 32 Document 3 सीà¤à¤¸à¤†à¤ˆà¤†à¤° केनà¥à¤¦à¥à¤°à¥€à¤¯ कोष à¤à¤µà¤‚ सिरामिक अनà¥à¤¸à¤‚धान संसà¥à¤¥à¤¾à¤¨ - 196. राजा à¤à¤¸ सी मलà¥à¤²à¤¿à¤• रोड, कोलकाता 700032, à¤à¤¾à¤°à¤¤ CSIR-CENTRAL GLASS & CERAMIC RESEARCH INSTITUTE 196, Raja S C Mullick Road, Kolkata - 700 032, India CGCR CGCH Report/Result Report: Page: 2 of 2 Based on the above test results and analysis, following points can be drawn: a) From complete chemical analysis it can be stated that, the composition of the glass is soda-lime silica based glass containing other minor components as....