TaxTMI 
TaxTMI 
2024 (10) TMI 334
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....bid. 1.2 Brief facts emerging from 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). 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 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 undue FTA benefit of said Notification, resulting in short levy of applicable Customs duty. 1.3 Accordingly, a Show Cause Notice dated 14.10.2022 was issued to the Appellant proposing to :- i. to reject the classification of CFG under CTH 70051090 adopted by the Appellant for the subject imports and to re-clas....
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.... tinted) opacified, flashed or merely surface ground : 7005 21 10 --- Tinted m2 10% - 7005 21 90 --- Other m2 10% - 7005 29 -- Other : 7005 29 10 --- Tinted m2 10% - 7005 29 90 --- Other m2 10% - 7005 30 - Wired glass : 7005 30 10 --- Tinted m2 10% - 7005 30 90 --- Other m2 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 was concerned, in terms of Note 2 (c) to Chapter 70, the tariff itself explains what an absorbent, reflecting or non-reflecting layer means, as mentioned below: "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) cu....
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....d [2019 (37) ELT 1774 (Tri.-Del.)]. (iii) It was averred that the findings in Para 43 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 not relied upon in the SCN and the test report did not specifically clarify the absence of absorbent, reflecting or non-reflecting layer. Further the finding in the impugned order that the absorbent layer should be on the air side was unfounded and hence denied. It was disputed that the impugned order disregarding all settled legal principles including its own test reports and decision to finalise the provisional assessments proceeded to cast aspersions with utter prejudice. (iv) It was pointed out that in identical cases, the Customs Authority for Advance Ruling, Mumbai vide ruling Nos. 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, held that the Clear Float Glass with absorbent layer on one side would merit classification under heading 7005 and more specifically under CTH 70....
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....ry (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 disputed that the impugned order without considering the case laws, advance rulings, action taken note and reply by the Appellant, had proceeded to confirm the classification of the imported CFG under CTH 70052990 thereby ignoring Para 5.3 of the Circular No. 1023/11/2016-CX dated 08.04.2016 which mandated that the quasi- judicial proceedings was legally bound to independently and judiciously adjudicate by taking into consideration the audit objections by CRA/ reply of the department, reply of the party, relevant legal provisions, extant case laws and relevant circulars of the CBEC. It was averred that, it is the onus of the department to prove and establish the classification of the product, in case, the department confro....
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....ances- [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 Equipments Vs Commissioner of Customs, Bangalore-[2006 (198) ELT 388 (Tri.-Bang.)] v. Wipro Ltd. Vs. Commissioner of Customs, Chennai [2005 (189) ELT 289 (Tri.-Bang.)] (xii) It was also contended that the appellant's plea regarding invocation of extended period was ignored in the impugned order and the corresponding imposition of penalty is not sustainable because the department itself had proposed to classify the goods under CTH700510 as evident from the Ministry's Action taken Note referred above. Further, it was disputed that the allegation of wilful mis-declaration by the importer is not at all tenable as claiming a particular classification under the Customs Tariff Act cannot and does not amount to misstatement. It was also submitted that the misclassification was not to be equated with the mis-declaration within the meaning of Section 28(4) of the Customs Act as it was settled law that once the goods are correctly described, the bona fide adoption of classification by the importer cannot be equated w....
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....he judgement of the Hon'ble Supreme Court in the case of Weston Components Ltd. relied in Para 57 of the impugned order was mis read and misplaced as the judgement was contradicted in the case of Raja Impex Pvt. Ltd. [2008 (229) ELT 185 (P&H)] and hence it was averred that confiscation cannot be ordered when the goods are not physically available. The findings in Para 58 of the impugned order that imposition of fine is justified even when goods are not available by relying upon the decision of the Hon'ble Madras High Court in the case of M/s. Visteon Automotive Systems wherein the decision of the Hon'ble Bombay High Court in Finesse Creations Inc was referred, was rebutted as the decision of the Hon'ble High Court of Madras was per incuriam in the light of confirmation of the Bombay High Court decision by the Hon'ble Supreme Court and hence it was averred the reliance placed on the said decision was not sustainable. Accordingly, it was submitted the impugned order holding that the goods are liable for confiscation and imposing redemption fine is not sustainable. (xv) It was contended that when demand itself is unsustainable, the question of interest, penalty and redemption fine do....
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....s no absorbent, reflective or non-reflective layer deposited on the surface of the glass and as such Clear Float Glass in the present case is not classifiable under 70051090 of the Customs Tariff Act, 1975. The item has not undergone any coating process and as there is no absorbent, reflective or non-reflective layer on the air side of Float Glass under import, it cannot be covered under Sub-heading 700510. He has prayed for setting aside the appeal, in view of the clear findings recorded in the impugned Order-in-Original. 5. Heard both sides and carefully considered the submissions and evidences on record. 6. The issues which arise for decision in this appeal are: i. Whether the imported Clear Float Glass, is classifiable under CTH 70051090 as declared/self-assessed by the Appellant or under CTH 7005 2990 as re-classified/re-assessed by the Department in terms of Chapter Note 2(c) to Chapter 70 of Customs Tariff Act, 1975? ii. Whether the Appellant is eligible for FTA benefit under Sl. No. 934 of Notification No. 46/2011-Cus dated 01.06.2011? and iii. Whether Extended Period is invokable or not considering the evidence and facts in this appeal. 7. We find that the appella....
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....oms Tariff Act, 1975 and the relevant paras have been reproduced below for the sake of convenience:- "9.1 Before proceeding to determine the appropriate classification of imported CFG, it would be relevant to reproduce rival tariff entries with the relevant Chapter Note as follows:- 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 7005 10 - Non-wired glass, having an absorbent, reflecting or non-reflecting layer : 7005 10 10 --- Tinted m2 10% - 7005 10 90 --- Other m2 10% - - Other non-wired glass : 7005 21 -- Coloured throughout the mass (body tinted) opacified, flashed or merely surface ground : 7005 21 10 --- Tinted m2 10% - 7005 21 90 --- Other m2 10% - 7005 29 -- Other : 7005 29 10 --- Tinted m2 10% - 7005 29 90 --- Other m2 10% - 7005 30 - Wired glass : 7005 30....
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....t 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, 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 translucency; or which prevents light from being reflected on the surface of the glass." 9.5 The Ld. Advocate 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 whic....
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....s 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 KOLKATA] has held that the CFG is rightly classifiable under tariff item 7005 1090. The relevant Paragraphs read as follows:- "16. We find that there is no dispute that the impugned goods is non-wired glass. By conjoint reading of the above note 2(c) 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 invariab....
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....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 are being exported from Malaysia under its code 70052990. The applicant has submitted a copy of the letter ref. no.MITI.700-2/26 Jld.6(38) dated 30.04.2021 from 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. Furt....
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.... 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. 700510 -Non-wired glass, having an absorbent, reflecting or non-reflecting layer. 70051010 --- Tinted 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 o....
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....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, 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. ....