9911796707
TMI Blog2024 (8) TMI 1349X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 Brief facts of this appeal are that the Appellant had imported "Clear Float Glass" (CFG) from Malaysia classifying them 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). In total, during the period from October, 2017 to March, 2022, 89 imports were made by the appellant of Clear Float Glass of Malaysian origin. Most of these imported consignments were provisionally assessed at the time of imports and subsequently, based on test report by CSIR-CGCRI, Kolkata, assessments were finalised classifying the goods under CTH 70051090. However, during the course of audit conducted by Customs Revenue Audit (CRA), it was noticed 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 undue FTA benefit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of exemption Notification No. 46/2011-Customs was correctly availed of by them adverting to CTA and HSN as under: - 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 m2 10% - 70051090 --- Other m2 10% - - Other non-wired glass : 700521 -- Coloured throughout the mass (body tinted), opacified, flashed or merely surface ground : 70052110 --- Tinted m2 10% - 70052190 --- Other m2 10% - 700529 -- Other : 70052910 --- Tinted m2 10% - 70052990 --- Other m2 10% - 700530 - Wired glass : 70053010 --- Tinted m2 10% - 70053090 --- Other m2 10% - and it was submitted that to get imported CFG classifiable under CTH 7005 1090, the CFG shall be non-wired glass having an absorbent, reflecting or non-reflecting layer and not tinted. As ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... classified under that CTH only if they were not covered under any specific entry under CTH7005 and in this regard pointed out that as per Rule 3(a) of the general Rules of Interpretation of the harmonised system, headings providing specific description shall be preferred to heading providing general description. Reliance was placed in this regard on the decisions in the case of M/s. Bharat Forge & Press Industries Pvt. Ltd. Vs. CCE [1990 (1) TMI 70-SC], HPL Chemicals Ltd. Vs CCE, Chandigarh [2006 (4) TMI 1 (SC)], Metals and Ferro Alloys Ltd., Cuttack Vs. Collector of Central Excise, Bhubaneshwar, [1991 (1) SCC 125], Mauri Yeast India Pvt. Ltd. vs. State of Uttar Pradesh [2008 (5) SCC 680], Dunlop India Ltd. Vs. Union of India & Others [1976 (2) SCC 241] and M/s. Aalayam Traders Vs. The Appellate Assistant Commissioner (CT), Puduchery, [2019 (7) TMI 1670-Madras High Court]. v. It was averred that it is the onus of the department to prove and establish the classification of the product, in case, the department confronts the classification claimed by the Appellant and contradicted the findings in the impugned order that in cases of entitlement of exemption Notification, the onus was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed itself is unsustainable in view of the decisions in the case of Pratibha Processors Vs. Union Of India [1996 (88) ELT 12 (SC)] and Commissioner of Customs Vs. MMK Jewellers & Anr. [2008 (225) ELT 3 SC]. Further, it was averred that there was no reasonable ingredient for imposing penalty under Section 114A when suppression/ wilful misstatement/collusion could not be proved to exist in view of the decision off the Apex Court in Sun Microsystems India Pvt. Ltd. Vs. Commissioner of Customs, Bangalore [2016 (339) ELT 475 (Tri.-Bang.)] viii. It was argued that the goods were not liable for confiscation under Section 111 (m) as there was no mis-declaration pursuant to the claim of classification and exemption made by the Appellant. In this regard reliance was placed on the ratio of the decisions in Northern Plastic Ltd. Vs. Collector of Customs (Central Excise [1998 (101) ELT 549 (SC)], Sirthai Superware India Ltd. [2020 (371) ELT 324 (Tri.Mumbai)], Commissioner of C.Ex, New Delhi Vs. Mittal International [2018 (359) ELT 527 (Tri.-Del.)] and Jay Kay Exports & Industries Vs. Commissioner of Customs, Kolkata-[2004 (163) ELT 359 (Tri.-Kol)]. ix. It was averred that the proceedings o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Finance itself refuted the findings of the CRA Audit. It was averred that neither the SCN nor the impugned order brought forth any contumnacious act of the Appellant showing mis-statement with an intent to evade payment of duty, when the Appellant had been importing CFG for many years adopting CTH 70051090. 3.3 The Ld. Counsel further referred to RTI response of CGCRI-CSIR in relation to a similar finding in the case of M/s. Bagreecha Industries cited supra, wherein the presence of an absorbent and non-reflecting layer on the CFG was confirmed which justified the classification under CTH 70051090. 4.1 The Ld. Authorised representative Shri R. Rajaraman representing the Department affirmed the findings of the Lower Adjudicating Authority. He has drawn our attention to the test report of CSIR-Central Glass & Ceramic Research Institute, Kolkata vide Report No. GC/3337/TCC/3796-3797/21-22 dated 24.02.2022 wherein the testing agency has opined that there is no absorbent, no reflective or non-reflective layer on airside. As such, it was stressed that the primary condition for classifying the imported CFG under CTH 70051090 was not satisfied. He has submitted that if the tin layer is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in the issuance of a SCN and the impugned order dated 09.06.2023. The Ld. Advocate for the appellant argued that they have been importing CFG for many years and have been classifying the CFG under 7005 1090 as the imported CFG are non-wired glass, non-tinted and has a thin TIN absorbent layer on one side of the glass. In support of their contention that the imported Clear Float Glass has satisfied the condition of Chapter Note 2(c) to Chapter 70 of Customs Tariff Act, 1975 of having an absorbent reflecting or non-reflecting layer, the appellant has relied on the test report given by CSIR-Central Glass & Ceramic Research Institute, Kolkata which reads as follows : - The above Report clearly indicates that the imported Clear Float Glass is a non-wired glass and not tinted which is having an absorbent layer on the Tin side which is fluorescent under UV illumination. The Clear Float Glass imported is annealed glass and meant for decorative, industrial or automotive glass. 8. We notice that these proceedings were initiated as a result of CAG's audit objection and CBEC had replied in detail legally justifying the classification of CFG under CTH 70051090. As the Department itself wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 70053010 --- Tinted m2 10% - 70053090 --- Other m2 10% - Chapter Note 2(c) to chapter 70 read as follows:- "2. For the purposes of headings 7003, 7004 and 7005 : (a) glass is not regarded as "worked" by reason of any process it has undergone before annealing ; (b) cutting to shape does not affect the classification of glass in sheets ; (c) the expression "absorbent, reflecting or non-reflecting layer" means 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." 9.2 It is evident from the manufacturing process that the CFG manufactured as above has a microscopically thin coating of metal layer, namely TIN on one side of the CFG, which is known as "Tin Side". Further it is an undisputed fact in this proceeding that the imported CFG are non-wired and non-tinted. This leaves us to ascertain whether such microscopically thin Tin Coating appearing on the TIN side is an absorbent, reflec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly introduces tin by thermal diffusion into one side of the glass. In other words, the Ld. Adjudicating Authority tows the audit objection of CRA that the absorbent reflecting or non-reflecting layer is available only on the tin side of the CFG and not on the air side of the CFG. 9.7 The advocate would submit that, neither the tariff heading nor the Chapter Note warrants nor mandates that the absorbent reflecting or non-reflecting layer shall be on which side of the CFG. In other words, the only requirement for CFG to get classified under 70051090 is that the CFG shall have an absorbent reflecting or non-reflecting layer, which is undisputedly present in the instant case and the same, is evidenced by test reports issued by the notified Government Agency viz., CSIR-CGCRI as many as more than 40 test reports pertaining CFG imports through various Custom Houses. Further, the Ld. Advocate referred to an RTI application made to CSIR wherein it was clarified that all the float glasses tested for Customs by them since 2017 till 17.07.2023 has a tin layer on one side of the float glass which is absorbent and non-reflective. [CSIR-Central Glass and Ceramic Research Institute's letter date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Tin on one side, which does not mean that all Float Glass to be classifiable under 7009 1090. 19. We find that the appellant sought reply under RTI dated 17.07.2023, wherein the question was raised that it is observed that in some of the Report, no other layer other than Tin layer is found on one side of the Glass which is fluorescent is mentioned. Whether such layers are reflective or not reflective and whether such layers are absorbent or not? The reply is given as- (a) not-reflective and (b) absorbent (UV). 20. If the same is considered then the said clarification is satisfying the Chapter Note 2(c) of Chapter 70 of the Customs Tariff Act and the said Report has not been relied upon by the adjudicating authority while adjudicating the case. Therefore, the impugned order is bad in law. 21. We further take note of the fact that in the case of M/s. Suraj Constructions (supra), the Advance Ruling Authority has examined the issue and observed as under:- "7. I have considered all the materials placed before me for the subject goods. I have gone through the submissions made by the applicant during personal hearing and the comments of the jurisdictional Principa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further, in the case of M/s. Chandrakala Associates (supra), again the Advance Ruling Authority has examined the issue and observed as under:- "10. I have considered all the materials placed before me for the subject goods. I have gone through the submissions made by the applicant during personal hearing. In the absence of any comment from the jurisdictional Principal Commissioner/Commissioner of Customs, on the impugned subject matter, I proceed to render an advance ruling based on materials available on record. The subject goods for which advance ruling has been sought, their characteristics, manufacturing process, utility etc. are already mentioned in the aforementioned paras. The subject goods are clear float glass, with an absorbent layer, which is fluorescent under UV illumination. The subject goods are not wired, not tinted or not green in colour. The heading 7005 10 covers nonwired glasses having an absorbent, reflecting or non-reflecting layer and the headings 7005 21 to 7005 29 deal with non-wired glasses which are body tinted, opacified, flashed etc. Therefore, the subject goods should more appropriately be covered under sub-heading 7005 1090. While prima facie, based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non-reflecting layer' means 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." 5.4.3 A Plain reading of CTH 7005 would reveal that 700510 covers non-wired glass having absorbent, reflecting or non-reflecting layer. A clear conclusion is that single clash entry after 70051090 i.e. ".... other non-wired glass" would cover non-wired glasses without absorbent, reflecting or non-reflecting layer. 5.4.4 The Adjudicating Authority has held that CTH 700521 covers glass which may or may not have absorbent or reflecting or non-reflecting layer. The Adjudicating Authority has contended that the impugned goods are coloured through out body (i.e. body tinted) and thus covered by CTH 700521 and articles of CTH 700521 may or not have absorbent/reflecting layers. This interpretation itself is erroneous in light of scheme of CTH under 7005 and explanation given in 5.4.3 above. 5.4.5. It is settled position of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re 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. 12. 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 (Determination of Origin of Goods under the Preferential Trade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tially 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. The Department which was of the view that the CFG is rightly classifiable under CTH 70051090, changed its stand and initiated action consequent to raising of the audit objection by CAG. 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, 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 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. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
