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2024 (5) TMI 943 - AT - CustomsReclassification of Imported goods - Clear Float Glass (CFG) from Malaysia - eligibility for FTA benefit under Sl. No. 934 of Notification No. 46/2011-Cus - demand of short levied duties - interest as per Section 28AA - confiscation - Invocation of extended period for demand of duty and imposition of penalty. Whether the imported goods, 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 - 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 classification adopted by the appellant under tariff item 7005 1090 is correct and the classification determined in the impugned order is without any basis and hence not sustainable. Appreciating the ratio of the decision of Kolkata Tribunal in the appellant s own case where facts are identical, we hold that the impugned Order-in-Original No. 101620/2023 dated 11.04.2023 cannot be sustained and so ordered to be set aside. As such, we confirm the classification of the imported CFG under tariff item 7005 1090 and consequently, the appellants are rightly entitled for the benefit of Sl.No. 934 of Notification No. 46/2011-cus., as claimed by them subject to fulfilment of production of valid Customs Tariff Rules, 2009. Invocation of extended period - We find that the issue has been very much in the know of the revenue whereby 61 Bills of Entry for the period November 18 to June 2019 had undergone the rigours of provisional assessment and subsequent finalization for the very same assessee, for the very same product and for the very same reason. After finalization of the same based on test reports in favour of the appellant, it is not open for the revenue to invoke the larger period of the limitation in general and definitely not in respect of those finalized 61 Bills of Entry. As such, we are of the considered view that the appellant has not suppressed or mis-declared any fact and the proposal to re-classify is only on the basis of the interpretation made in the CRA objection and not for any fault of the appellant. Therefore invoking extended period in this proceedings for demand of duty and imposing mandatory penalty is not at all sustainable. Thus, we hold that the imported CFG are not liable for confiscation u/s 111(m) of the Act and the impugned order confiscating the CFG with redemption fine is also not sustainable. Thus, the appellant succeeds on merits as well as on limitation. Thus, we hereby allow the appeal and set aside the impugned order with consequential relief, if any, as per the law.
The issues involved in the judgment are: i. Classification of imported Clear Float Glass (CFG) under CTH 70051090 or CTH 70052990. ii. Eligibility for FTA benefit under Sl. No. 934 of Notification No. 46/2011-Cus dated 01.06.2011. iii. Invocation of Extended Period for demand of duty. Issue i: Classification of imported Clear Float Glass (CFG) under CTH 70051090 or CTH 70052990 The Appellant imported "Clear Float Glass" (CFG) from Malaysia classifying it under CTH 70051090 and availed exemption under Notification No. 46/2011-Cus dated 01.06.2011. The department, however, reclassified the imported CFG under CTH 70052990, attracting BCD @10%, alleging misclassification to avail FTA benefits. The Show Cause Notice (SCN) dated 18.04.2022 proposed reclassification and demanded differential Customs duties of Rs.41,41,13,642/- along with interest and penalties. The Adjudicating Authority confirmed the reclassification under CTH 70052990 and imposed fines and penalties. The Appellant argued that the CFG has a microscopic tin layer, qualifying it under CTH 70051090. Test reports from CSIR-CGCRI confirmed the presence of an absorbent tin layer. The Appellant cited previous rulings and test reports supporting their classification. The Tribunal found that the CFG has a thin absorbent tin layer, thus meriting classification under CTH 70051090. The Tribunal also noted that there is no legal requirement for the absorbent layer to be on a specific side of the glass. Issue ii: Eligibility for FTA benefit under Sl. No. 934 of Notification No. 46/2011-Cus dated 01.06.2011 The Appellant claimed FTA benefit under Sl. No. 934 of Notification No. 46/2011-Cus dated 01.06.2011. The Tribunal confirmed the classification of CFG under CTH 70051090, making the Appellant eligible for the FTA benefit, subject to the production of valid Certificates of Origin as per the 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. Issue iii: Invocation of Extended Period for demand of duty The Appellant argued that they had been importing CFG for almost 20 years under CTH 70051090 without any dispute, except for the proceedings initiated due to the CRA objection. They contended that the invocation of the extended period was unwarranted as the imports were provisionally assessed and finalized under CTH 70051090 based on test reports. The Tribunal found that the issue was known to the revenue, and the appellant had not suppressed any facts. The proposal to reclassify was based on CRA objections, not on any fault of the Appellant. Therefore, invoking the extended period for demand of duty and imposing penalties was not sustainable. Conclusion The Tribunal allowed the appeal, set aside the impugned order, and confirmed the classification of imported CFG under CTH 70051090. The Appellant was entitled to the benefit of Sl. No. 934 of Notification No. 46/2011-Cus, and the invocation of the extended period for demand of duty was not justified. Consequently, the confiscation of CFG and imposition of fines and penalties were also set aside.
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