TaxTMI 
TaxTMI 
2024 (7) TMI 1689
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....on 125 of Customs Act, 1962 and Penalty 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 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). 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 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....
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....naturally occurring process and cannot be equated with chemical coating and absorbent (Para 34 of the impugned order) c) Thus, if it is interpreted that the tin layer which is automatically formed in the manufacture process of every float glass itself as absorbent layer, then the words "whether or not" used in the heading of 7005 of Customs Tariff Act, 1975 becomes redundant and such interpretation is not correct as settled by various case laws. Accordingly, tin layer cannot be treated as absorbent layer within the meaning of the CTI 7005 1090. 1.5 Being aggrieved, the present appeal filed by the Appellant before this forum. 2. The pleadings of the Appellant in respect of Appeal No. C/40119/2024 have been specified below:- (i) It was submitted that the Appellant had correctly classified the subject goods and the observations in the impugned order are incorrect and unsustainable. (ii) It was submitted that the imported goods are rightly classifiable under CTH 70051090. In this regard the relevant classifications of Float Glass in the Customs Tariff were adverted to and it was submitted that to get imported CFG classifiable under CTH 7005 1090, the CF....
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....d with an ARN layer of tin, they are rightly classifiable under Sub-Heading 7005 10.The Appellant referred to the Test Report dated 31.01.2019 and clarification E-mail dated 20.04.2022 issued by CSIR pertaining to the subject goods also records that "the layer of tin may be considered as UV absorbent layer as it fluoresces under UV illumination" It was submitted that as per the said test report it was reported that the CFG imported by the Appellant is a non-wired, non-tinted float glass having an absorbent tin layer on one side of the glass which is ample proof justifying the classification under 70051090. Reliance was also placed on the following decisions of the Commissioner (Appeals) wherein it was held that Clear Float Glass having absorbent layer on one side imported from Malaysia are rightly classifiable under CTH 7005 1090 and eligible to Nil rate of BCD in terms of S.No. 934 of the ASEAN Notification. a) Order-in-Appeal No. NOI-CUS-000-APP-400-22-23 dated 09.03.2023 passed by the Commissioner, CGST (Appeals), Noida in the case of M/s. Rider Glass Industries Pvt. Ltd. b) Order-in-Appeal No. CC(A) CUS/D-II/ICD/PPG/861/2022023 dated 20.07.2022 passed by the C....
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....at when the product can reasonably be covered by a specific entry under CTH 700510, the same should not be relegated to the residuary entry under CTSH 7000529. (iii) It was submitted that the Appellant is also in possession of valid Certificates of Origin (COO) issued by the Ministry of International Trade and Industry, Malaysia which indicated that the subject goods originated from Malaysia and that they satisfy all the origin requirements specified under the INDIA ASEAN Free Trade Agreement. In the light of the above submissions, it was further submitted that the subject goods are rightly classifiable under Tariff Item 7005 1090 and are eligible to Nil rate of BCD under the ASEAN Notification. In any case, the subject goods are prima facie excluded from the scope of Tariff Item 7005 2990 as the said entry covers only those glasses, which are other non-wired glasses that do not have an absorbent, reflecting or non-reflecting layer. (iv) Further, it was submitted that it is a settled position of law that specific entry is to be preferred over general entry and when one particular item can reasonably be covered by a specific entry, revenue cannot seek classificatio....
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....the light of the above decisions, it was submitted that the classification proposed in the SCN was incorrect as the goods do not merit classification under CTH 70052990. (vii) It was contested that even if the imported CFG was re-classifiable under CTH 70052990, the goods were eligible for concessional rate of 5% duty vide Sl.No.935 of the ASEAN Notification and therefore the observation in Para 46 of the impugned order that the Appellant was not entitled to concessional rate of Customs duty was denied. (viii) It was submitted that it is a settled position of law that the order of assessment in the Bills Of Entry under Section 17 must be first modified by an appeal preferred under Section 128 of the Customs Act in terms of Section 128A(3) of the Customs Act and the ratio of the decision of the Hon'ble Supreme Court in ITC Ltd. Vs. Commissioner of Central Excise, [2019 (368) ELT 216 (SC)] and in Tripura Ispat Vs. Union of India & Others (Order dated 12.01.2021 in WP(C) No. 465 of 2020). It was stressed that the Department having failed to do so cannot demand duty by issue of a show cause notice under Section 28 of the Act and such notice would be one without jurisd....
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....oner of Customs [2002 (145) ELT 162 (Tri.-Kolkata)] b) International Exim Agency Vs. Commissioner of Customs, Chennai [2009 (242) ELT 267 (Tri.-Chennai)] c) Midas Fertchem Impex Pvt. Ltd Vs. Principal Commissioner of Customs, Air Cargo Complex (Import), New Delhi [2023 (1) TMI 998] d) Sirthai Superware India Ltd. [2020 (371) ELT 324 (Tri.-Mumbai)] e) Vesuvias India Ltd. Vs. Commissioner of Customs [2019 (370) ELT 1134] (x) It was submitted that it is a cardinal principle of law that when the principal demand was not justified, there was no liability to pay ancillary demands and therefore interest liability does not arise in view of the decision of the Hon'ble Supreme Court in Pratibha Processors Vs. Union of India [1996 (88) ELT 12 (SC)]. (xi) It was averred that mere short payment of duty will not render the goods liable for confiscation and in this regard as the impugned order has not specified the reason as to how the Appellant had indulged in wilful mis-declaration rendering the goods liable for confiscation under Section 111 (m) and reliance was placed in this regard on the following decisions: i. Northern Plastic ....
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.....-Del.)], Sandvik Asia Pvt. Ltd. Vs. Commissioner of Customs [2019 (369) ELT 1397 (Tri.-Mum.)],Patel Wood Syndicate Vs. Commissioner of Customs, Mumbai [2014 (303) ELT 81 (Tri.-Mum.)] and Commissioner of Central Excise Vs. HMM Limited [2015 (76) ELT 497 (SC)]. It was further contested that no penalty can be imposed in cases involving interpretation of exemption provisions by relying on the decisions in the case of Little Star Foods Pvt. Ltd. Vs. Commissioner of Central Tax, Hyderabad [2019 (368) ELT 730 (Tri.-Hyd.)], Sports & leisure Apparel Ltd. Vs. Commissioner of Commissioner of Central Excise, Noida [2005 (180) ELT 429 (Tri.-Del.)], White line Chemicals Vs. Commissioner of Central Excise [2008 (229) ELT 95 (Tri.-Ahmd.)] and Vadilal Industries Ltd. Vs. Commissioner of Central Excise [2007 (213) ELT 157 (Tri.-Ahmd.)]. It was further submitted that penalty cannot be imposed as there was no intention to evade duty by placing reliance on the decisions in the case of D& M Building Product Pvt. Ltd. Vs. Commissioner of Customs, Bangalore [2019 (37) ELT 1183 (Tri-Bang.)], Commissioner Vs. Garden Sild Mills Ltd. [2016 (241) ELT A207 (Guj.)] and Cement Marketing Company of India Ltd. Vs.....
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....bsorbent, 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 evidence 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 Departmen....
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....prises 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, the relevant extracts of which have been reproduced 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 7005 21 10 --- Tinted m^2 10% - 7005 21 90 --- Other m^2 10% - 7005 29 - - Othe....
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....apter 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 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 c....
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....at 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 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.....
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.... 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 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....
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....ed 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 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 tin....
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....in 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 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 a....