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TMI Blog2024 (5) TMI 943X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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 ful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laysia classifying under CTH 7005 1090 and cleared the same @ Nil rate of BCD availing exemption under Notification 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). 2.2 However, the department was of the view that the imported Float Glass is classifiable under CTH 7005 2990 attracting BCD @10% and consequently not eligible for the benefit under Notification No. 46/2011-Cus. dated 01.06.2011. Hence it was alleged that the CFG imported from Malaysia was wilfully mis-classified under CTH 70051090 for the purpose of availing FTA benefit of said Notification, resulting in short levy of applicable Customs duty. 2.3 Accordingly, a Show Cause Notice dated 18.04.2022 was issued to the Appellant proposing :- i. to reject the classification of CFG adopted by the Appellant for the subject imports and to re-classify the same under CTH 70052990 thereby seeking to deny the benefit of Notification No. 46/2011-Cus dated 01.06.2011 ii. to demand differential Customs duties of Rs.41,41,13,642/- arising on account of short levy along with interest under Section 28(8) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d reveal that the Ministry has replied both scientifically as well as legally justifying the classification of CFG under CTH 70051090, in their reply to the said Audit Para and the relevant Action Note is reproduced below:- iii. It was submitted that to get classified under Chapter Heading 70051090 of CTH, the CGF shall be a non-wired glass, having an absorbent, reflecting or non-reflecting layer and not tinted. In the instant case, there is no dispute between the importer and department that the CFG imported is a non-wired glass. The CFG has a microscopic tin layer during the manufacturing process and the dispute was only with regard to whether such a layer is an absorbent, reflective or non-reflective layer to merit classification under CTH 7005 10 90 as per Chapter note 2 (c) of Chapter 70 to Customs Tariff Act, 1975. iv. It was pointed out that for the period between November 2018 to June 2019, the entire imports of CFG by the Appellant were provisionally assessed and samples were drawn and tested at CSIR-Central Glass and Ceramic Institute, Kolkata to verify whether an absorbent, reflecting or non-reflecting layer exists or not. The said institute in its report stated that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the tin side is detected under UV illumination using tin detector and No absorbent layer is on air side other than the tin layer on the tin side of the glass which is fluorescent under UV illumination . Further it was also referred to an RTI application made to CSIR which clarified that all the float glasses tested by them between 2017 and 17.07.2023 have a tin layer on one side of the float glass which is absorbent and non-reflective. In this regard, the reply dated 17.07.2023 of CSIR, CGCRI, Kolkata is extracted and reproduced below:- Query vide Registration Numben NIL RTI Reg SI No: 423 I am to refer to y ur request for information under RTI Art, 2005, receiv d vide Registration Number:: NIL dated 20/06/2023 and the reply is / are as foll ws: 1. How many many number of Test Reports, since the year 2017 have been issued to Indian Customs Department pertaining to testing of Clear Float Glass since 2017 to till date to know whether it Clear Float Glass? Response : 43 2. Provide the list of all Bills of Entry numbers with .corresponding test Reports issued for Testing of Clear Float Class since 2017 till date? Response: List Attached ( Annexure-I) 3. How many Test are still ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the case of Chandrakala Associates [2021 (9) TMI 1433-A.A.R Customs, Mumbai] wherein the subject goods were appropriately classified under CTH 7005 1090 which stand was reiterated in the case of Suraj Constructions by the Advance Ruling Authority. The relevant Paragraph of the decision of Advance Ruling Authority is extracted below:- 10. In view of the above discussions, I rule that the subject goods 'Clear Float Glass' with absorbent layer on only one side would merit classification under heading 70.05 and more specifically, under subheading 70051090 of the first schedule to the Customs Tariff Act, 1975. The said imports shall also be governed by the provisions of Notification No. 37/2020-Customs (ADD) dated 11.11.2020 supra, that seeks to impose definitive anti-dumping duty on Clear Float Glass, originating in or exported from Malaysia and imported into India. Further, the benefit of Sr. No.934 of the table appended to the notification no. 46/2011-Cus., dated 01.06.2011, shall be extended to the subject goods in terms of the said notification, provided the applicant in each case of import shall produce evidence as to the origin of subject goods before the Deputy/Assi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Tri.-Mum.)] (h) Mac Megha Agro Equipments (P) Ltd. Vs. CCE, Cochin [2006 (199) ELT 260 (Tri.-Bang.)] (i) Madhus Garage Equipments Vs. CC, Bangalore [2006 (198) ELT 388 (Tri.-Bang.)] (j) Wipro Ltd. Vs. CC, Chennai [2005 (189) ELT 289 (Tri.-Bang.)] xiii. It was averred that the reliance of the Adjudicating Authority in Para 59 of the impugned order, on the decision in the case of Dilip Kumar Company [2018 (9361) ELT 577 (SC)] is not applicable as the issue involved in this case at hand is classification and not exemption which is distinguishable from the above decision as per which the Hon ble Court observed that exemption Notification has to be interpreted strictly. xiv. It was contended that the invocation of extended period and the corresponding imposition of penalty is unwarranted in the current proceedings because of the reason that dispute is only based on audit objections and the imports have been happening for a long time and the earlier imports were finalised under provisional assessment under CTH 70051090 which were not challenged by way of appeal and attained finality. Therefore the allegation of intentional mis-classification by the importer is not at all tenable. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CFG under CTH 70051090 was not satisfied. He has submitted that if the tin layer is treated as the absorbent layer which is inherent of the manufacturing process of every float glass, the words whether or not having an absorbent, reflecting or non-reflecting layer will become redundant. He has contended that it is not legal to interpret the tin layer itself as absorbent layer, which is automatically formed in the manufacture process of every float glass. The words whether or not used in the heading becomes redundant and such interpretation is not correct as settled by various case laws viz., Rao Shiv Bhadr Singh Vs. The State of VP [AIR 1953, SC 394] and Shri Balaganesan Metals Vs. Shri M.N. Shanmugham Chetty Others [AIR 1987 SC 1668]. 4.2 He has supported the findings of the Adjudicating Authority, that there is no absorbent, reflective or non-reflective layer deposited on the surface of the glass and as such Clear Float Glass in the present case is not classifiable under 70051090 of the Customs Tariff Act, 1975. The item has not undergone any coating process and as there is no absorbent, reflective or non-reflective layer on the air side of Float Glass under import, it cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f CFG: 8.2 Float Glass is manufactured by float process, a process invented by Sir Alastair Pilkington in 1952. Various raw materials viz., sand, lime, dolomite, soda and sulphate are melted in a furnace at a very high temperature and the raw materials melt into a molten liquid which would be allowed to pass through a shallow bath of a molten tin. Such molten glass, when fed and passed through such float bath of the molten tin, the glass acquires perfect flatness of the liquid pool and later retains the smooth finish of the liquid surface. In the process it also gets imbibed with the layer of such molten tin by its physiological reactions. Thus, during the process of manufacture of CFG itself, one side of the glass will have a resultant metal coating of tin. Thereafter, such molten glass having the molten tin layer on one side would reach the end of the bath where it would be cooled and hard rolled through an annealing process, which would be subsequently cut to desired sizes. Origin of the classification dispute: 8.3 We have noted that an objection was raised by the CRA to the effect that absorbent layer of metal should have been obtained by way of coating process after manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may give necessary direction to the field to issue Show Cause Notice and adjudicate the case on merits. In the absence of such a direction given by Commissioner (PAC) to the field to issue SCN or adjudicate the same which makes the SCN void ab initio. It appears that above instructions were further reiterated in Circular No. 1053/02/2017-CX dated 10.03.2017. At this juncture, we wish to observe that these Circulars issued are meant to effectively manage Audit function and purely administrative in nature. It is not understood, how the appellant is arguing that the adjudication proceedings are to be set aside when no prejudice is caused to the appellant as while adjudicating the issues, principles of natural justice have been complied with. 9.1 Before proceeding to determine the appropriate classification of imported CFG, it would be relevant to reproduce rival tariff entries with the relevant Chapter Note as follows:- 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 700510 - Non-wired glass, having an absorbent, reflecting or non-reflecting layer : 70051010 --- Tinted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Chapter Heading 70051090 of CTA, CFG shall be a non-wired glass, having an absorbent, reflecting or non-reflecting layer of metal. The imported CFG is non-wired is not in dispute. Entire dispute centres around whether the imported goods are having an absorbent layer or not in terms of Chapter Note 2(c) of Chapter 70 of the Customs Tariff Act, 1975. As per Chapter Note 2(c) of Chapter 70 what needs to be demonstrated is that the CFG has 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. 9.5 The Ld. Advocate has further submitted that it is evident from the manufacturing process explained above as well as the test report referred above, that the CFG is having a microscopically layer of metal, namely 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 conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is not permitted for the Ld. Adjudicating Authority to add or amend either tariff or chapter notes, to suit revenue's benefit. The above contentions are convincing as in matters of classification, a simplicitor and straight forward approach is paramount unless there is an anomaly. 10. We also note that in the appellant's own case on the very same issue, the co-ordinate bench of this Tribunal at Calcutta vide their Final Order No. 77460-77462/2023 reported in [2023 (11) TMI 485 CESTAT KOLKATA] has held that the CFG is rightly classifiable under tariff item 7005 1090. The relevant Paragraphs read as follows:- 16. We find that there is no dispute that the impugned goods is nonwired glass. By conjoint reading of the above note 2(c) and the manufacturing process, it can be inferred that CFG would have microscopical layer of metal, namely tin, which is an absorbent layer as contemplated under the above said Chapter Note 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. Goldplus Float Glass are manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble, subject to the condition that in respect of each case of import, the applicant would have to produce evidence before the Deputy/Assistant Commissioner of Customs as to the origin of subject goods. 8. On the issue of whether the benefit of the said exemption would be available even if the sub-heading mentioned in the COO differs for 70051090, the applicant their authorized representative were asked to explain the context of the said question. It appears that the subject goods are being exported from Malaysia under its code 70052990. The applicant has submitted a copy of the letter ref. no.MITI.700-2/26 Jld.6(38) dated 30.04.2021 from the Director of Trade and Industry Cooperation, Ministry of International Trade and Industry (MITI, hereinafter), stating that they had been requesting the clear float glass exporters to provide an advance ruling/document 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s. Asahi India Glass Limited (supra) has examined the issue and observed as under:- 5.4 Now coming to merits of issue, the contesting entries viz 70051010 (as declared by the appellant) and 70052110 (as per the assessing Authority) from the Customs Tariff are reproduced below:- Upto 31.12.2019 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. 700510 -Non-wired glass, having an absorbent, reflecting or non-reflecting layer. 70051010 --- Tinted 70051090 --- Other - Other non-wired glass; 700521 -- Coloured throughout the mass (body tinted) opacified, flashed or merely surface ground: , 70052110 --- Tinted. It is 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 reproduce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it classification under Sub-heading 7005 and more precisely under CTH 7051010. 24. As from the facts of the case, it is clear that the Clear Float Glass imported by the appellant are absorbent and having non-reflecting layer, in that circumstances, the appellant has qualified the merit classification under CTH 7005 1090, therefore, we hold the correct classification of the Clear Float Glass imported by the appellant under the impugned Bills of Entry is classifiable under CTH 7005 1090. Consequently, the appellant is entitled 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing and Tariff item Description Rate (in percentage unless otherwise specified) (1) (2) (3) (4) (5) 934 70010020 to 70051090 All Goods 0.0 0.0 935 700521 to 700530 All Goods 5.0 5.0 Even if the imported goods are classifiable under CTH 7005 2990 as above the applicable rate of duty is only 5%. Whereas in this Order-in-Original, duty was computed at 10% denying the benefit of exemption in toto of Notification No. 46/2011-Cus. dated 01.06.2011 at Sl.No. 935 supra. Conditions to be satisfied being the same under S.Nos. 934 and 935, actual duty demanded should have been 50% of demanded differential duty of Rs.41,41,13,642/-, as confirmed in the impugned Order-in-Original No. 101620/2023 dated 11.04.2023. 14. Further, 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 defin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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