2024 (10) TMI 334 - AT - Customs

Reclassification of imported Float Glass - to be classified under CTH 70052990 or under CTH 7005 1090? - benefit of exemption under N/N. 46/2011-Cus dated 01.06.2011 (Serial No. 934) - Country of Origin of subject import goods - Invocation of extended period of limitation. 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 Department in terms of Chapter Note 2(c) to Chapter 70 of Customs Tariff Act, 1975? - 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 case of M/S. BAGRECHA ENTERPRISES LIMITED VERSUS COMMISSIONER OF CUSTOMS (PORT) , KOLKATA 2023 (11) TMI 485 - CESTAT KOLKATA wherein it was held that the Clear Float Glass is more appropriately classifiable under CTH 7005 1090 of the Customs Tariff Act, 1975. Whether Extended Period is invokable or not considering the evidence and facts in this appeal? - HELD THAT - The issue has been very much in the know of the revenue as the Department itself was of the view that the CFG is rightly classifiable under CTH 70051090 as identical imports of CFG by other manufacturers were initially assessed provisionally in terms of Section 17 of the Customs Act, 1962 and were later finalised after the receipt of the test report from CGCRI-CSIR. After finalisation of assessments for over 5 years, 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, we are of the considered view that 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 for any fault 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. Whether the Appellant is eligible for FTA benefit under Sl. No. 934 of Notification No. 46/2011-Cus dated 01.06.2011? - HELD THAT - 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. 102222/2023 dated 09.06.2023 is ordered to be 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 for demand of duty and penalties.

Issue-wise 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-assessed by the Department. The appellant argued that the CFG, being non-wired and having a thin tin layer on one side, qualifies as having an "absorbent, reflecting or non-reflecting layer" per Chapter Note 2(c) to Chapter 70 of the Customs Tariff Act, 1975. This classification was supported by test reports from the CSIR-CGCRI, which confirmed the presence of a tin layer. The Tribunal found that the presence of this layer meets the requirements for classification under CTH 70051090, as it is absorbent and non-reflective. The Tribunal also referenced previous rulings and decisions, including those by the Kolkata and Chennai Tribunals, which supported this classification. The Department's insistence that the layer must be on the air side or result from a separate coating process was not upheld, as neither the tariff heading nor the chapter note specified such requirements.

2. Eligibility for FTA Benefit:

The appellant claimed the FTA benefit under Notification No. 46/2011-Cus, which the Department denied based on the reclassification of CFG. The Tribunal concluded that since the CFG was correctly classified under CTH 70051090, the appellant was entitled to the FTA benefit. The Tribunal emphasized that the benefit should not be denied based on the classification mentioned in the Country of Origin Certificate if the goods meet the criteria under the correct classification.

3. Invocation of Extended Period:

The extended period for demand of duty and penalties was contested by the appellant, who argued that there was no wilful misclassification or intention to evade duty. The Tribunal noted that the Department had previously accepted the classification under CTH 70051090 and that the assessments had been finalized without dispute. The Tribunal found no evidence of positive suppression by the appellant and determined that misclassification could not be equated with misdeclaration. The Tribunal relied on precedents which held that bona fide adoption of classification by the importer does not amount to misdeclaration. Consequently, the invocation of the extended period was deemed unsustainable, and the order for confiscation, fine, and penalties was set aside.

Conclusion:

The Tribunal held that the imported Clear Float Glass is classifiable under CTH 70051090, making the appellant eligible for the FTA benefit under Notification No. 46/2011-Cus. The invocation of the extended period for demand of duty and penalties was not justified. The impugned Order-in-Original was set aside, and the appeal was allowed with consequential relief as per the law.