TaxTMI 
TaxTMI 
2025 (4) TMI 1695
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.... 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, in respect of the following imports of clear float glass as tabulated below: - SI. No. Appeal No. File No. Appellant's Name BE No. Date 1 C/46030/2024 C3/II/164/0/2023- Sea Suraj Construction 3654677 08.12.2022 2 C/46031/2024 C3/II/165/0/2023- Sea Suraj Construction 3796954 19.12.2022 3 C/46032/2024 C3/II/166/O/2023- Sea Suraj Construction 4146436 12.01.2022 4 C/46033/2024 C3/II/167/O/2023- Sea Suraj Construction 4112838 10.01.2022 5 C/46034/2024 C3/II/168/0/2023- Sea Suraj Construction 3683062 10.12.2022 The Assessing Officer did not permit the appellant to file the bills of entry under CTH 7005 1090, as the Country of Origin certificate contained a different CTH. The appellant had explained that the goods imported by them are rightly classifiable under CTH 7005 1090, as the said goods contain an absorbent layer. The appellant also requested for provisional assessment of the....
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....were rightly classifiable under CTH 70051090. In this regard the relevant classifications of Float Glass in the Customs Tariff were adverted to as under: - 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 m^2 10% - Other non-wired glass : 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 -- Other : 7005 29 10 --- Tinted m^2 10% - 7005 29 90 --- Other m^2 10% - 7005 30 - Wired glass : &nbs....
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....y referring to Paragraph 11 of the impugned order wherein it was mentioned that the Tribunal, Kolkata did not consider certain factors in the case of Bagreecha Enterprises Ltd. Vs Commissioner of Customs, Kolkata (Order dated 03.11.2023 passed in C/75536-75538/2023), it was averred that the principle of judicial discipline requires the lower authorities to follow the decisions of the higher forums and subordinate courts are bound to follow the judgements unless there be a subsequent judgement by a higher court which had taken a different view other than the earlier view expressed. In this regard, the Appellant relied upon the decision in the case of Tata Motors Ltd. Vs Union of India [2009 (244) ELT 337 (Bom.)] and Hon'ble Supreme Court decision in the case of Kamalakshi Finance Corporation Ltd. [1991 (55) ELT 433 (SC)]. vii. It was submitted that on a similar issue which came up for consideration before the Commissioner of Customs (Appeals), New Delhi in the case of M/s. Asahi India Glass Limited, it was held 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 o....
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....hat the Ministry had replied in detail legally justifying the classification of CFG under CTH 70051090 as tabulated below:- Verification comments on Ministry's Action Taken Note on Audit Para No. 4.10.1 (DAP 83) Audit Report No.17 of 2020 SL No Audit Para No. and subject. Gist of Para Ministry's ATN Remarks/comments of CRA Kochi 1 4.10.1 Clear Float Glass misclassified as 'non wired glass'. 4.10.1 Clear float glass misclassified as 'non wired glass'. Clear float glass is transparent and offers high visible light transmittance. It does not have any absorbent, reflective layer and is classifiable under CTH 70052990 as 'Other non-wired 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) Commissionerate's. The imported goods were misclassified under CTH 70051090 and exempted from BCD. This resulted in non-levy of duty amounting to 4.34 cro....
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....d 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 whereby metal oxides arc sprayed in the form of thin coatings; that it modifies the behaviour of the glass with respect to solar radiation, visibility and reflection of light; that different types of technology and process are involved in coating of glass according to the purpose for which the glass is used and is a class apart from clear float glass. Classification of goods in the first schedule - import tariff is governed by the general rules of interpretation (GRI) and general explanatory notes thereof. As per Rule1 of GRI, "for legal purpose, classification shall be determined according to the terms of the headings and any relative section or chapter notes.". As per GRI 6, for legal purposes, the classification of goods in sub-headings of a heading shall be determined according to the terms of those sub-headings and any related ....
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....etal or of a chemical compound ... " as given in Chapter notes 2 (c) of Chapter 70 of the Customs tariff and also the process of coating of glass as detailed in (ii) ibid. In the absence of such scientific or legal background and also on the basis of the test results of identical goods, the objection raised by the audit is unsustainable. In view of the above, Audit Para may kindly be considered for closure. The Ministry's reply examined and the following remarks are offered. As stated by the Ministry, as per Rule I of GRI, for legal purpose, classification shall be determined according to the terms of the headings and any relative section or chapter notes. Chapter note 2 (c) under Chapter 70 states as follows: "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 purpose of the above Chapter Note indicates the intenti....
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....f the imported glass is "clear float glass". In the absence of any documentary evidence regarding the presence of "absorbent, reflecting or non-reflecting layer' on the imported glass at the time of permitting clearance, the imported "clear float glass' was rightly classifiable under 7005 29 90. (iii) The test report of CGCRI which was produced subsequently was not in respect of "clear float glass" imported against the Bills of Entry in respect of which Audit has issued TA Memos. Hence the same cannot be relied upon to conclude that all clear float glass imported and cleared earlier also contained "an absorbent, reflecting or non-reflecting layer". Considering the above facts, reply of the Ministry is not acceptable and requires re-consideration. xii. 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 t....
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.... Vs. Commissioner of Customs, Chennai vide Final Order Nos. 40876-40908/ 2024 dated 18.07.2024. v. M/s. Navakar Impex Pvt. Ltd. Vs. Commissioner of Customs, Chennai (Order dated 24.07.2024 in C/40514/2023). 3.2 Further, it was submitted that the Hon'ble Apex Court in the case of Commissioner of Central Excise, Bhopal vs. Minwood Rock Fibres Ltd. [2012 (278) ELT 581 (SC)] had held that when there were two conflicting entries in a classification dispute, then an entry which is beneficial to the Assessee requires to be applied. Further, the Counsel has pointed out that the Hon'ble Apex Court in the case of STP Limited [1998 (97) ELT 16 (SC)] held that if there is any dispute in the construction of any provision of a taxing statute, that doubt must be resolved in favour of the Assessee. 3.3 The Ld. Counsel submitted that the general Rules of Interpretation has precedence over the Country of Origin Certificate and hence reliance placed on the classification mentioned in the COO is not legally sustainable. 3.4 It was submitted that the Circular No. 23/2024-Customs dated 14.11.2024 regarding classification of clear float glass holds no merit as it is a settled principle ....
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....assification under CTH 7005 1090 and availing FTA benefit under Sl. No. 934 of Notification No. 46/2011-CUS dated 01.06.2011 by furnishing the required Certificate of Origin (COO) in terms of Customs Tariff (Determination of Origin of Goods Under the Preferential Trade Agreement Between the Government Of Member States of ASEAN and Republic of India) Rules, 2009. It appears that in respect of these five appeals when the importer has sought classification of the goods under CTH 70051090, the authorities have not allowed the appellants to adopt the above said classification or request for provisional assessment. In order to avoid detention and demurrage charges, the appellants filed the above five Bills of Entry adopting the classification under CTH 70052990 as mentioned in the COO Certificate but have filed these appeals before the Lower Appellate Authority which were rejected. The Department, based on an earlier audit objection and the description of goods mentioned in COO, rejected the classification declared by the Appellant and re-classified the imported goods under CTH 70052990 denying the benefit of Notification cited supra. 8. We notice that these proceedings were initiated....
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....d 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% - 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) cutting to shape does not affect the classification 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 reflecte....
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....amely 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 which inevitably introduces tin by thermal diffusion into one side of the glass. In other words, the Ld. Adjudicating Authority tows the audit objection of CRA that the absorbent reflecting or non-reflecting layer is available only on the tin side of the CFG and not on the air side of the CFG. 9.7 The advocate would submit that, neither the tariff heading nor the Chapter Note warrants nor mandates that the absorbent reflecting or non-reflecting layer shall be on which side of the CFG. In other words, the only requirement for CFG to get classified under 70051090 is that the CFG shall have an absorbent reflecting or non-reflecting layer, which is undisputedly present in the instant case and the same,....
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....e 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. Gold plus 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 invariably a layer of Tin on one side, which does not mean that all Float Glass to be classifiable under 7009 1090. 19. We find that the appellant sought reply under RTI dated 17.07.2023, wherein the question was raised that it is observed that in some of the Report, no other layer other than Tin layer is found on one side of the Glass which is fluorescent is mentioned. Whether such layers are reflective or not reflective and whether such layers are absorbent or not? The reply is given as (a) not-reflective and (b) absorbent (UV). 20. If the same is considered then the said clarification is satisfying the Chapter Note 2(c) of Chapter 70 of the ....
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....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. Further, in the case of M/s. Chandrakala Associates (supra), again the Advance Ruling Authority has examined the issue and observed as under:- "10. I have considered all the materials placed before me for the subject goods. I have gone through the submissions made by the applicant during personal hearing. In the absence of any comment from the jurisdictional Principal Commissioner/Commissioner of Customs, on the impugned subject matter, I proceed to render an advance ruling based on materials available on record. The subject goods for which advance ruling has been sought, their characteristics, manufacturin....
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....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 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." 5.4.3 A Plain reading of CTH 7005 would reveal that 700510 covers non-wired glass having absorbent, reflecting or non-refl....
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....d 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. We are unable to persuade ourselves with the Revenue's contention which is based on contested CRA objection that the presence of metal layer should be by way of conscious coating and on the "Air Side" of the CFG. It is relevant to note here that on one hand the revenue themselves have not accepted the CRA objection, which is the basis for these proceedings, and are contesting the CRA objection. Thus, we conclude that the class....
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....lumination for both the glasses. 1) It is annealed glass for decorative, industrial or automotive glass. The above test report clearly indicate that an absorbent layer is observed on one side of the glass which is fluorescent under UV illumination for both the glasses thus satisfying Chapter Note 2(c) to Chapter 70. The classification of any imported goods has to be decided in terms of the provisions of Customs Tariff Act i.e, Section Notes, Chapter Notes & Chapter Headings and in terms of Interpretative Rules to the Customs Tariff Act duly aided by HSN Explanatory notes. Regarding the classification of CFG mentioned in the COO Certificate issued in respect of these imports would not be having any bearing on the classification of the imported Clear Float Glass by the appellant. We also take note of the decisions rendered in the appellant's own case by the Customs Authorities for Advance Ruling No. CAAR/CUS/APPL/10/2022 and in the case of M/s. Chandrakala Associates, Chennai that irrespective of the Tariff Heading mentioned in the COO Certificate, the imported goods are appropriately classifiable under CTH 70051090. 13. We have considered the appellant's arguments tha....