2024 (8) TMI 1349 - AT - Customs

Classification of imported goods - Float Glass - to be classified under CTH 7005 1090 or under CTH 7005 2990? - it was alleged that the CFG imported from Malaysia was wilfully mis-classified under CTH 70051090 for the purpose of availing undue FTA benefit of the said Notification, resulting in short levy of applicable Customs duty - eligibility for FTA benefit under Sl. No. 934 of Notification No. 46/2011-Cus dated 01.06.2011 - invocation of extended period of limitation. Classification of imported goods - HELD 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 in the case of M/s. Bagrecha Enterprises Ltd. Vs. Commissioner of Custom, Chennai 2024 (5) TMI 943 - CESTAT 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 issue of classification of Clear Float Glass is decided in favour of the appellant. Thus, the appellant succeeds on merits. Invocation of extended period of limitation - penalties - HELD THAT - After finalisation of assessments relying on the Test Report, it is not open for the Department to invoke the larger period of limitation as these assessments have undergone the rigours of provisional assessment and subsequent finalisation for the same product and for the same reason, the appellant has not suppressed or mis-declared any fact and the proposal to reclassify was only on the basis of interpretation made in the CRA objection and not on account of any shortcoming on the part of the appellant - Therefore, invoking extended period in these proceedings, either for demand of duty or for imposition of mandatory penalty is not at all sustainable. So, the issue of limitation is decided in favour of the appellant and consequently the order of confiscation and imposition of fine and penalties are set aside. The imported Clear Float Glass is more appropriately classifiable under Customs Tariff Heading 7005 1090 of the Customs Tariff Act, 1975 and thus is eligible for exemption of the benefit of the Notification No. 46/2011-Cus dated 01.06.2011 (Sl.No. 934) and the impugned Order-in-Original No. 102220/2023 dated 09.06.2023 is set aside. Appeal allowed.

Summary

Issues Involved:
1. Classification of imported Clear Float Glass (CFG) under the correct Customs Tariff Heading (CTH).
2. Eligibility for Free Trade Agreement (FTA) benefit under Notification No. 46/2011-Cus.
3. Invocation of the extended period of limitation for demand of duty.

Issue-wise Detailed Analysis:

1. Classification of Imported Clear Float Glass (CFG):

The primary issue was whether the imported CFG should be classified under CTH 70051090, as declared by the appellant, or under CTH 70052990, as re-classified by the Department. The appellant argued that CFG imported from Malaysia was non-wired, non-tinted, and had a thin tin absorbent layer on one side, classifying it under CTH 70051090. The Department, based on an audit objection, re-classified the CFG under CTH 70052990, denying the benefit of Notification No. 46/2011-Cus.

The Tribunal examined the manufacturing process and the test reports from CSIR-CGCRI, Kolkata, which confirmed the presence of a microscopically thin tin layer on one side of the glass, qualifying it as having an absorbent, reflecting, or non-reflecting layer as per Chapter Note 2(c) to Chapter 70 of the Customs Tariff Act, 1975. The Tribunal also referenced previous decisions, including those of the Kolkata and Chennai Tribunals, which had similarly classified CFG under CTH 70051090. The Tribunal concluded that the classification under CTH 70051090 was correct, rejecting the Department's re-classification under CTH 70052990.

2. Eligibility for FTA Benefit:

The appellant claimed FTA benefits under Sl. No. 934 of Notification No. 46/2011-Cus, which was denied by the Department due to the re-classification of CFG. The Tribunal, having confirmed the correct classification under CTH 70051090, held that the appellant was rightly entitled to the FTA benefit under the said notification, subject to the production of a valid Certificate of Origin (COO).

3. Invocation of Extended Period:

The appellant contended that the Show Cause Notice (SCN) was partly time-barred and that the extended period under Section 28(4) of the Customs Act, 1962, was unjustified. They argued that the facts were always available to the Department, and there was no collusion, wilful misstatement, or suppression of facts. The Tribunal found that the Department had initially accepted the classification under CTH 70051090 and had changed its stance only after an audit objection. The Tribunal concluded that invoking the extended period was not sustainable as there was no evidence of wilful misclassification or intent to evade duty. Consequently, the order of confiscation, fine, and penalties was set aside.

Conclusion:

The Tribunal allowed the appeal, confirming the classification of imported CFG under CTH 70051090 and granting the FTA benefit under Notification No. 46/2011-Cus. The invocation of the extended period for demand of duty was also set aside, resulting in the annulment of the order of confiscation and penalties. The appeal was allowed with consequential relief as per the law.