TaxTMI 
TaxTMI 
2024 (7) TMI 1686
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....alty equal to duty short 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 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 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 1.3 Accordingly, a Show Cause Notice dated 15.06.2022 was issued to the Appellant proposing to:- ....
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....ORKED 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 : 7005 21 --- Coloured throughout the mass (body tinted) m^2 10% - opacified, flashed or merely surface ground : 7005 21 10 --- 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% - and it was submitted that CFG having an absorbent layer and non-tinted are classifiable under CTH 7005 1090. It was submitted that CTH 700510 at six- digit level covers non-wired glass having an absorbent, r....
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.... the Orders-in-Appeals No. CUS-000-APP-400-22-23 and CUS-000-APP-400-22-23 both dated 09.03.2023 had upheld the classification of goods under CTH 70051090 and had extended the benefit of Notification No. 46/2011-Cus dated 01.06.2011(Serial No. 934). (vi) 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 Country of Origin Certificate (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. (vii) It was averred that identical goods manufactured by domestic manufacturers viz., Saint Gobain and others in Nava Sheva classified the goods under CTH 7005 10 90 and assessed accordingly on the basis of absorbe....
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....ms authorities, Cochin stated (September 2019) that 1/36202/2021 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 tin which inevitably introduces tin by thermal diffusion into one side of the glass. The glass so manufactured is clear float glass, one side of which is known as the 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 tha....
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....lecting 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 note that neither the chapter notes to Chapter 70 of the Customs Tariff nor the explanatory notes issued by the World Customs Organization stipulate any specific process for the production of the coating nor it excludes per se the absorbent layer of Tin as reported in the test report of CGCRI, from the scope of the "microscopically thin coating of metal or ....
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.... 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 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 Memos were "Clear float glass" and not "Float glass having an absorbent reflecting or non-reflecting layer" or "coated glass". The presence of absorbent, reflecting or non-reflecting layer on....
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....ase, 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 Vs. 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)]. (x) 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 observant tin layer on one side of the CFG and the institute vide their reply dated 17.07.2023 clarified that the float glass tested by them contain an absorbent tin layer on one side which meant that the CGF had an absorbent and non-reflective layer. In this regard, it was also pointed out that the findings in Para 43 of the impugned order relying on a test report dated 24.02.2022 of CGCRI in....
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....erent 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. The words "whether or not" used in the heading becomes redundant and such interpretation is not correct as settled b 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 ....
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....de 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, 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, re....
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.... 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 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 translu....
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.... 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 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....
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....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 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 submitt....
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....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 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, hav....
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....ts. 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 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 a....
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....ic 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 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. Co....