2024 (4) TMI 359 - AAAR - GST

Classification of imported and traded goods - clear float glass - classifiable under the CTH 7005 29 or under CTH 7005 10 of the Customs Tariff Act, 1975? - Country of origin - HELD THAT - In order to merit classification under 7005 10, the float glass should be non-wired and should have an absorbent layer, and in order to merit classification under 7005 29, the float glass should be non-wired and that the same should not be coloured . Clear Float Glass , as the name suggests, are supposed to be colourless, and are admittedly non-wired. Once these aspects are taken out of equation, we are left with the term an absorbent layer which becomes the crucial difference between the chapter sub-headings 7005 10 and 7005 29, and accordingly, the discussion on the said absorbent layer assumes immense significance in determining the classification in the instant case. On scrutiny of the sample test report dated 04.02.2019 of CGCRI, Kolkata pertaining to this appellant, it is observed that the report mentions about the presence of An absorbent layer (Tin) is observed on one side of the glass which is fluorescent under UV illumination for both the glasses . At the same time, it is observed that the test report does not say that the glass has undergone any coating process. This Tin layer on one side which fluoresce under UV illumination is not the result of applying any coating on clear float glass, but actually inherent to the production of Float Glass - the write-up on float process by Sir Alastair Pilkington states that modified properties are produced by means of surface coatings whereby a microscopically thin coating on glass is applied by chemical vapour deposition technology; the write-up under UQG Optics refers to application of secondary process of laminating, tempering, coating, etc., to meet specific optical requirements; the write-up under FOSG suggests adding colour to the glass during the manufacturing process to achieve tint and solar radiation absorption properties. As the said test report does not mention that the glass has undergone any such coating, the glass does not have an absorbent, reflecting or non-reflecting layer. When the Country of Origin Certificate issued by MITT, Malaysia which was carrying the classification code as 7005 10 90 hitherto, is reported to have changed the classification code, of late, as 7005 29 90, we feel that it is made with a sense of purpose, and that it cannot be considered as an erroneous mention, or as an entry due to oversight. The mention of CTH 7005 2990 was made with a conscious effort to set right the anomaly that existed earlier in respect of the exports received, of late from Malaysia, the country of origin. Clear float glass means CLEAR as understood by those using the product and not COATED . Clear float glass are transparent and colourless and allow visible light to pass through it. It is also apparent that Clear Float Glass neither possess an absorbent, reflecting or non-reflecting layer to absorb or improve the reflecting qualities of the glass nor are coloured throughout the mass (body tinted), opacified, flashed or surface ground and therefore, same are excluded from the purview of classification under CTH 70051090 or CTH 700521. Further, the Clear Float Glass are not wired glass and as such do not merit classification under CTH 700530. In view of the aforesaid position, the subject goods are rightly classifiable under Customs Tariff Heading 70052990 of the Customs Tariff Act, 1975.

Summary

Issues Involved:
1. Classification of 'Clear Float Glass' under the Customs Tariff Act, 1975.
2. Validity and applicability of test reports and prior rulings.
3. Relevance of Country of Origin Certificate and international classification norms.
4. Binding nature of Advance Rulings and their persuasive value.

Summary of Judgment:

1. Classification of 'Clear Float Glass':
The primary issue is the correct classification of 'Clear Float Glass' under the Customs Tariff Act, 1975. The Authority for Advance Ruling (AAR) classified it under tariff sub-heading 7005 29 as 'Others', and at the eight-digit level, if tinted, under CTH 7005 2910, and if non-tinted, under CTH 7005 2990. The Appellant contended that the product should be classified under CTH 7005 1090, citing the presence of an absorbent layer (Tin) on one side of the glass.

2. Validity and Applicability of Test Reports and Prior Rulings:
The Appellant relied on a test report from the Central Glass and Ceramic Research Institute, Kolkata, which confirmed the presence of a tin layer. However, the report did not indicate any additional coating process, which is essential for classification under 7005 10. The Appellant also cited various rulings and decisions, including those from the Customs Authority for Advance Ruling, Mumbai, and the Hon'ble CESTAT, Kolkata, which supported their classification under CTH 7005 1090. The Appellate Authority noted that the test report from 2019 was not contemporaneous and could not be applied to the current imports.

3. Relevance of Country of Origin Certificate and International Classification Norms:
The Country of Origin Certificate from Malaysia recently changed the classification code to 7005 29 90, suggesting a deliberate correction. The Appellate Authority emphasized the importance of international classification norms under the Harmonized System of Nomenclature (HSN), which is followed by member countries of the World Customs Organization (WCO).

4. Binding Nature of Advance Rulings and Their Persuasive Value:
The Appellant argued that advance rulings have persuasive value even if they are not binding on third parties. The Appellate Authority acknowledged this but clarified that such rulings are binding only on the applicant and the concerned officers as per Section 103(1) of the CGST Act, 2017. The Authority also noted that the classification under GST should align with the Customs Tariff Act, 1975.

Conclusion:
The Appellate Authority upheld the AAR's decision, ruling that 'Clear Float Glass' merits classification under Customs Tariff Heading 7005 29 90 of the Customs Tariff Act, 1975. The ruling emphasized that the presence of a tin layer, inherent to the manufacturing process, does not qualify as an absorbent layer required for classification under 7005 10.