TaxTMI 
TaxTMI 
2024 (7) TMI 1685
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....on the basis of similar contentions by both the opposing sides. 2.1 Customs Appeal No. C/40416/2023 has been filed by the Appellant being aggrieved by the Order-in-Original No. 101612/2023 dated 10.04.2023 passed by the Commissioner of Customs, Chennai-II ordering for reclassification of imported Float Glass under CTH 70052990 and confirming the demand of short levied duties of Rs. 7,38,35,962/- during the period from 05.05.2017 to 07.12.2021, under Section 28(8) along with applicable interest as per Section 28AA of Customs Act, 1962, besides imposing redemption fine of Rs. 5,70,00,000/- in lieu of confiscation in terms of Section 125 of Customs Act, 1962 and imposing penalty equal to duty short levied under Section 114A of Act ibid. 2.2 Brief facts that are culled out from 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). The imports were pro....
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.... Act ibid. 3.1 Then, second set of appeals - Customs Appeal Nos. C/40371/2023, C/40838-40849/2023, C/40055-40067/2024 and C/40069-40074/2024 have been filed by M/s. Float Glass Centre being aggrieved by the Order-in-Appeal Nos. 206 to 220/2023 dated 17.03.2023, 715 to 733/2023 dated 27.10.2023, 546 to 557/2023 dated 28.08.2023, respectively, all passed by the Commissioner of Customs (Appeals), Seaport, Chennai Customs-II rejecting all the 46 appeals filed on the ground that the Appellant had failed to neither provide any technical inputs / substantive evidence nor registered any protest before assessment of the goods. The details of the Bills of Entry involved wherein the appellant has challenged the classification / assessment in filing the appeals are as per the details given below:- Sl. No. CESTAT Appeal No. OIA No. Date Bill of Entry No. Date Protest Reference 1 C/40371/ 2023 206-220/2023 17.03.2023 2700637 01.10.2022 _ 2634726 27.09.2022 3027636 25.10.2022 3103278 31.10.2022 3738590 14.12.2022 3365290 18.11.2022 3739225 14.12.2022 3808291 19.12.2022 3373249 19.11.2022 3538431 30.....
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....assessment, the same was not allowed and to avoid demurrage / detention charges, the Appellant opted to declare the goods under CTH 70052990 and effected clearances upon payment of Customs duty. 3.3 Being aggrieved, the Appellant has preferred appeals before the Commissioner (Appeals) who vide Order-in-Appeal Nos. 206 to 220/2023 dated 17.03.2023, 715-733/2023 dated 27.10.2023 and 546-557/2023 dated 28.08.2023 rejected the appeals filed on the grounds that the Appellant (i) failed to request the issuing authority to cause amendment in COO Certificate (ii) failed to provide any technical inputs or substantive evidence or registered any protest with Customs authorities before assessment of the goods. Further, the Appellant's contention that they were not permitted to file the Bill of Entry under CTH 700510190 was denied citing the assessment procedure prevalent under Customs law. 3.4 Thus, in respect of the impugned Order-in-Original No. 101612 dated 10.04.2023 of the Commissioner of Customs and Orders-in-Appeal Nos. 206 to 220/2023 dated 17.03.2023, 715-733/2023 dated 27.10.2023 and 546-557/2023 dated 28.08.2023 of the Commissioner of Customs (Appeals), the appellant being agg....
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....ssification 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 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." The appellant has submitted that the thin coating of metal which absorbs infrared light will be sufficient to treat the glass as having absorbent layer which aspect has been confirmed during the testing by the Central Glass and Ceramic Institute, Kolkata in respect of past consignments imported by the Appellants and hence the conclusions in Paras 62 and 63 of the impugned order were disputed. Once it was confirmed that there is an absorbent layer of tin, it is irrelevant as to how the absorbent layer was formed. Further, it was submitted that the glass imported will meet the parameters laid down for heading 70051090 as it is a non-wired glass with an absorbent layer of tin metal and once the product falls within the scope of this heading, ther....
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....rsuvius India Ltd. Vs. Commissioner of Customs, Vishakapatnam [2019 (370) ELT 134 (Tri.-Hyd.)] iii. Advanced Spectra Tek Pvt. Ltd. Vs. Commissioner of Customs (ACC & I), Mumbai [2019 (369) ELT 871 (Tri.-Mum.)] iv. Manek Chemicals Pvt. Ltd. Vs. Commissioner of Central Excise, Ahmedabad [2002 (145) ELT 335 (Tri.-Del.)] v. Commissioner of Central Excise & Service Tax, Dibrugarh Vs. Hi Flow Pump Co. [2012 (282) ELT 286 (Tri.-Kolkata)] Relying on the above decisions, it was contended that invocation of extended period under Section 28(4) on the grounds of misclassification is not sustainable. (vi) The conclusions in Para 65 of the impugned order were contested and consequently it was submitted that the various decisions of the Supreme Court and High Courts relied in the impugned order are irrelevant. (vii) It was averred that the judgement of the Hon'ble Supreme Court in the case of Weston Components Ltd. was misapplied and that confiscation cannot be ordered when the goods are not physically available as held by the Bombay High Court in the case of Commissioner of Customs Vs. Finesse Creation Inc in its order dated 25.08.2009, which was upheld by the....
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....eld vide Order-in Appeal No. 861-863/2022-23 dated 20.07.2022 that the subject goods merit classification under CTH 70051090 as the goods have an absorbent (tin) layer on one side and consequently extended the benefit under Notification No. 46/2011-Cus. dated 01.06.2011. (v) 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 70051090, irrespective of the tariff heading mentioned in the COO and hence it was averred that the reliance placed by the assessing officer on the Classification mentioned in the COO is not legally relevant for determining the classification of impugned imports. (vi) It was contended that identical goods manufactured by domestic manufacturers Viz. Saint Gobain and others in Nava Sheva classified the goods under CTH 7005 10 90 and were assessed accordingly on the basis of absorbent layer on one s....
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....s 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 notification. On this being pointed out (July/ August 2018), the Customs authorities, Cochin stated (September 2019) that I/36202/2021 the composition of the glasses was soda lime silica based glass containing other minor components. The glass surfaces are not polished, not tinted, non- wired and not specified. The Department further stated that test results of imports indicate that "An absorbent Layer of Tin" was observed on one side of the glass which is fluorescent under UV illumination". Accordingly, in view of the test result, the imported goods are clear float glass and correctly classified under CTH 70051090. The reply of the Department was not acceptable because :- (a) The manufacturing process of float glass involves floating molten glass to the mirror- like surface of molten tin, starting at 1,100 degree Celsius leaving the float bath as a solid ribbon at 600 degree Celsius on a bed of molten....
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.... to the terms of those sub-headings and any related subheading notes ... "The terms of heading 7005 read as "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". The sub-heading 7005 10 read as "non-wired glass, having an absorbent, reflecting or non reflecting layer". The tariff item 7005 1010 denotes "tinted" and 7005 1090 denotes "other" whereas the Customs tariff item 7005 2990 denotes "Other" in the "Other" category of "other non-wired glass. The subject goods are declared as "clear float glass" and the relevant CGCRI report states that the glass is a non-wired float glass and that an absorbent layer (tin) is observed on one side of the glass which is fluorescent under UV illumination". On conjoint reading of the report vis a vis the chapter notes and terms of the sub heading 7005 10 and GRI, it can be seen that the goods are rightly classifiable under the customs tariff item of 7005 1090. Moreover Rule 3(a) of the GRI states that the heading which provides the most specific description shall be preferred to headings providing a more general description. It is pertinent to ....
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....rpose 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 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" as a result of coating applied with metal or chemical compound. Audit is in agreement with the case law quoted by the Ministry which ruled that "in classifying the product, the scientific and technical meaning is not to be resorted to and that the product must be classified according to the popular meaning attached to it by those using the product" The popular meaning attached to 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....
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....on the CFG is sufficient to classify the same under CTH 70051090 and also covered by the decision of Hon'ble Tribunal Chennai in the case of the same appellant in Final Order No. 40352/2024 dated 27.03.2024 passed in Customs Appeal No. 40203 of 2023. (x) It has been forcefully submitted that it is the onus of the department to prove and establish the classification of the product, in case, the department confronts a classification claimed by the Appellant and in this regard the Appellant relied on the ratio of the decision in the cases of Hindustan Ferrodo Ltd. [1997 (89) ELT 16 (SC)], Collector of Central Excise Versus Calcutta Steel Industries and Others [1989 (39) ELT 175 (SC)], Parle Agro (P) Ltd. Vs. Commissioner of Commercial Taxes, Trivandrum [2017 (352) ELT 113 (SC)] and Puma Ayurvedic Herbal (P) Ltd. Vs. Commissioner of Central Excise, Nagpur [2006 (196) ELT 3 (SC)]. (xi) It was submitted that the representative of the Appellant had filed an application dated 20.06.2023 with M/s. Central Glass and Ceramic Research Institute (CGCRI), Kolkata in which one of the queries pertained to whether the reports given by the said institute is relating to the existence of observa....
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....t, reflective or non-reflective layer deposited on the surface of the glass and as such Clear Float Glass in the present cases 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 appeals, in view of the clear findings recorded in the impugned Order-in-Original dated 10.04.2023 and also in the Orders-in-Appeals dated 17.03.2023, 28.08.2023 and 27.10.2023. 8. We have carefully considered the submissions made by both the sides and also evidences as available in the records. 9. The issues which arise for decision in these appeals 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 01.06.2....
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.... 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 the issue of classification of Clear Float Glass has been finally decided under CTH 7005 1090 of the Customs Tariff Act, 1975 and the relevant paras read as below:- "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 m^2 10% - 7005 10 90 -- Other Other non-wired glass : m^2 10% - - 7005 21 ---Coloured throughout the mass (body tinted) opacified, flashed or merely surface ground : ....
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....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 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 abo....
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....ve 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 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 700....
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....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, 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 corr....
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....y 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-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 applica....
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....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 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....
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.... by the appellant have not been discussed at all. No reasons were advanced as to why the Country-of-Origin Certificates produced are not valid. We are of considered view that the imported goods are required to be classified under the Indian Customs Law. Classification of imported goods under the first schedule of Customs Tariff Act, 1975 is governed by the General Rules of Interpretation of Import Tariff. As per Rule 1 of GRI, Classification of goods shall be determined according to the terms of the headings and any relative Section or Chapter Notes. If such headings or notes do not otherwise require then the classification is to be determined in accordance with Rule 2 to 6 of said Rules. Rule 6 of G.R.I. stipulates that the classification of goods in the sub-headings of a heading shall be determined according to the terms of those sub/headings and any related sub-heading Notes and, mutatis mutandis, to the above rules, on the understanding that only sub-headings at the same level are comparable. For the purposes of this rule the relative Section and Chapter Notes also apply, unless the context otherwise requires. It is important to note that the benefit of Country-of-Origin Certif....
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.... Under the D.O.O. Rules notified vide Notification No. 19/2000-Cus. (N.T.), dated 1-3-2000 one of the conditions required to be satisfied for declaring such goods as of Sri Lankan origin is that (a) processing in Sri Lanka should result in change of classification at 4 digit level (b) the third Country goods should not account for more than 65% of the FOB value of the goods and (c) the goods should be accompanied by Country of Origin certificate in the prescribed proforma from the competent Sri Lankan authorities. Ld. Adjudicating authority has acknowledged that certificate of country of origin has been issued by competent Sri Lankan authority certifying that the value of non-originating material is 54.23% which is less than the 65% of FOB value of the goods which conforms to the requirement of Rule 7(b) of DOO Rules, 2000. From the foregoing discussion it is also evident that as per the requirement under Rule 7(b) of DOO Rules, 2000, non-originating materials were sufficiently processed so as to result in a different classification at the 4 digit level of the Harmonized Commodity Description and Coding System. 6. In the light of the aforesaid analysis we are of t....