TaxTMI 
TaxTMI 
2024 (10) TMI 334
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....hort levied under Section 114 A of Act ibid. 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 t....
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.... - 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 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, a....
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....tion in the instant case. Further reliance was placed in this regard 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 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/....
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.... 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 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....
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....y 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 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 canno....
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.... 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.)] It was averred that the 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 confirma....
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.... 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. 4.2 He has supported the findings of the Adjudicating Authority, that there is 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 ....
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.... 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, Chennai wherein it was held that the Clear Float Glass is more appropriately classifiable under CTH 7005 1090 of the Customs 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 ....
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....omena 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, 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 submit....
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.... 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 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 manufactu....
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....sorbent, 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 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, Minis....
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....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. 700510 -Non-wired glass, having an absorbent, reflecting or non-reflecting layer. 70051010 --- Tinted 70051090 --- Other - Other non-wire....
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.... 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, therefore, we hold the correct classification of th....
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....ong 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 by the Appellant in the impugned order, we find that the 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 and 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 Uniworth Textiles Ltd. Vs. Commissioner of Central Excise, Raipur [....
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....ed 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 BsE) through Chennai (Sea) and Kochi (Sea) Commissionerates. The imported goods were misclassified under CTH 70051090 and exempted from BCD. This resulted in non-levy of duty amounting to 4.34 crore. Audit noticed that the imported goods were clear and not coated with any absorbent, reflective or non-reflecting layer, accordingly merit classification under CTH 70052990 and BCD was leviable at 5 per cent in terms of aforesaid Ministry's ATN Please refer to your office letter No. 29/ Ind Tax/Customs/136-2019 dated 31.01.2022 on the above cited subject. In this regard it is to submit that the Audit objection is based on the proposition that the "absorbent, reflecting or non- reflecting layer" mentioned in Chapter notes 2( c) of Chapter 70 of the Customs tariff is distinct from the Tin layer found in the floating glass and that coating of glass is a process whereb....
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....ound 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". The sub -heading 7005 Department further stated that test 10 read as "non-wired glass, having an results of imports indicate that "An absorbent, reflecting or non reflecting absorbent Layer of Tin" was layer". The tariff item 7005 1010 denotes observed on one side of the glass "inted" and 7005 1090 denotes "other" which is fluorescent under UV whereas the Customs tariff item 7005 illumination". Accordingly, in 2990 denotes "Other" in the "Other" view of the test result, the imported category of "other non-wired glass. The goods are clear float glass and subject goods are declared as "clear float correctly classified under CTH glass" and the relevant CGCRI report 70051090. The reply of the states that the glass is a non-wired float Department was not acceptable glass and that an absorbent layer (tin) is because: (a) The manufacturing observed on one side of the glass which is process of float gl....
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....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, reflecting or non-reflecting nor it excludes per se the absorbent layer layer on the 'clear float glass' imported of Tin as reported in the test report of was not examined by the Department at CGCRI, from the scope of the the time of assessment nor was any test that the glasses are neither "tinted" "microscopically thin coating of metal or report produced along with the import nor "wired". Hence, the possibility of a chemical compound...". The wordings documents to prove that the glass of classifying the glasses under used in the relevant sub-heading is "non-imported contained any absorbent CTH 70052110 (meant for tinted) wired glass, having an absorbent, reflecting or non-reflecting layer. In or under CTH 70053010 (wired reflecting or non-reflecting layer". The the absence of such documentary glass) was also ruled out. chapter notes or the explanatory notes evidence it is not known how the Therefore, the imported go....