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TMI Blog2024 (10) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... 90 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 Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly, a Show Cause Notice dated 14.10.2022 was issued to the Appellant proposing to :- i. to reject the classification of CFG under CTH 70051090 adopted by the Appellant for the subject imports and to re-classify the same under CTH 70052990 thereby seeking denial of the benefit of Notification No. 46/2011-Cus dated 01.06.2011. ii. to demand differential Customs duties of Rs.1,64,67,822 /- in respect of imports of CFG during the period from 12.01.2018 to 31.03.2020, arising on account of short levy under Section 28(4) of the Customs Act, 1962 along with applicable interest under Section 28AA of Customs Act, 1962. iii. to Confiscate the subject import goods valued at Rs.12,68,71,125/- under Section 111(m) of the Act ibid and iv. to impose penalty under Section 114A/112(a) of Customs Act, 1962. 1.4 After the due process of law, the adjudicating authority vide Order-in-Original No. 102222/2023 dated 09.06.2023 confirmed all the proposals put forth in the Show Cause Notice and imposed a redemption fine of Rs. 1,26,00,000/-in lieu of confiscation under Section 125 of the Act ibid and imposed a penalty equal to the duty confirmed in terms of Section 114A of Act ibid. 1.5 Being aggrieved, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 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. It was required to be proved whether the CFG having microscopic tin layer on one side of the glass is an absorbent, reflecting or non-reflecting layer as contemplated under the said Chapter note. It was submitted that as per the clarification given by CGCRI, Kolkata referred in Para 14 of the impugned order, the tin layer is present in CFG and it may be considered as a UV absorbent layer justifying classification of CFG as a non-wired, non-tinted float glass having an absorbent tin layer on one side of the glass under CTH 70051090. As such the finding in the impugned order was denied as neither the Customs tariff nor the HSN explanatory notes stipulate that the absorbent layer should be a result of applying coating on CFG . Further, it was stressed that any ambiguity in cases of classification should be inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e it was averred that the finding in Para 56 of the impugned order that the said rulings were applicable only to the applicant are misplaced as the advance ruling carry a persuasive value. (v) It was submitted that on identical issues pertaining to classification of CFG, the Commissioner of Customs (Appeals), Noida vide the Order-in-Appeals No. 400 401-2022-23 both dated 09.03.2023 had upheld the classification of goods under CTH 70051090 and had extended the benefit of Notification No. 46/2011-Cus dated 01.06.2011(Serial No. 934). It was pointed out that the above orders have attained finality as the same were not challenged. (vi) It was pointed out that the impugned order denied the benefit of the Notification No. 46/2011-Customs by discarding the Country of Origin (COO) certificate in respect of the imported CFG, based on the flimsy and trivial reason that the appellant had deliberately mis-classified the imported CFG in the COO certificate as 70051090 instead of CTH 70052990. In this regard it was submitted that even if the imported CFG was re-classifiable under CTH 70052990, the benefit of the said Notification cannot be denied as it was applicable to the revised classificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of entitlement of exemption Notification, the onus was on the Appellant. In this regard the Appellant relied on the ratio of the decision in the cases of Hindustan Ferrodo Ltd. [1997 (89) ELT 16 (SC)], Collector of Central Excise Vs. Calcutta Steel Industries and Others [1989 (39) ELT 175 (SC)], Union of India Vs. Garware Nylons Ltd. [1996 (87) ELT 12 (SC)], Puma Ayurvedic Herbal (P) Ltd. Vs. Commissioner of Central Excise, Nagpur [2006 (196) ELT 3 (SC)], Parle Agro (P) Ltd. Vs. Commissioner of Commercial Taxes, Trivandrum [2017 (352) ELT 113 (SC)], Commissioner of Customs Central Excise, Amritsar Vs. DL Steels [2022 (381) ELT 289 (SC)], HPL Chemicals Ltd. Vs. Commissioner of Central Excise, Chandigarh [2006 (197) ELT 324 (SC)] and Union of India Others Vs. Garware Nylons Ltd. [1996 (87) ELT 12 (SC)]. (ix) It was averred that identical goods manufactured by domestic manufacturers viz. Saint Gobain and Goldplus Float glass classified the goods under CTH 7005 10 90 both for domestic and export clearances which reinforced their claim for classification of CFG under CTH 70051090. (x) Reliance was placed on the following decisions of the tribunal wherein it was held that any demand of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the impugned order does not contain any finding of positive suppression by the Appellant. Reliance was placed in this regard on the following decisions:- a. Northern Plastic Ltd. Vs. Collector of Customs, Central Excise [1998 (101) ELT 549 (SC)] b. Commissioner of Central Excise, Delhi Vs. Ishaan Research Lab (P) Ltd. [2008 (23) ELT 7 (SC)] c. Commissioner of Customs, Bangalore Vs. A. Mahesh Raj [2006 (195) ELT 261 (Kar.)] d. Sirthai Superware India Ltd. [2020 (371) ELT 324 (Tri.-Mumbai)] e. Midas Fertchem Impex Pvt. Ltd. [2023 (1) TMI 988 CESTAT, New Delhi] f. Signet Chemicals Pvt. Ltd. [2022 (382) ELT 602 (Bom)] Relying on the above decisions, it was contended that invocation of extended period under Section 28(4) on the grounds of re-classification is not sustainable. (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involved in the appeal is covered by the decisions of the Hon ble Tribunal in the case of Bagreecha Industries Limited Vs. Commissioner of Customs (Port), Kolkata [Final Order Nos. 77460-77462/2023 dated 03.11.2023] passed in Customs Appeal Nos. C/75536-75538/2023 wherein the Hon ble Tribunal had held that the presence of tin layer on the CFG is sufficient to classify the same under CTH 70051090 and also covered by the decision of Hon ble Tribunal Chennai in the case of the same appellant in Final Order No. 40352/2024 dated 27.03.2024 passed in Customs Appeal no.40203 of 2023. It was argued that Para 4.1.2 of Circular no. 1023/11/2016-CX dated 08.04.2016 of CBEC was ignored as no SCN should have been issued in cases where the Department had not agreed with the audit objections on merits. Further, it was submitted that the SCN ought not have been issued since the Department contested the audit objection and hence it was submitted that the SCN was void ab initio as no specific direction was issued by Commissioner (PAC) to the field to issue SCN as mentioned in Circular No. 1053/02/2017-CX dated 10.03.2017 of CBEC. In view of the submissions and relied upon case laws, the Ld. Counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n No. 46/2011-CUS dated 01.06.2011 by furnishing the required Certificate of Origin (COO) in terms of 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. The department rejected the classification declared by the Appellant and re-classified the imported goods under CTH70052990 denying the benefit of Notification cited supra. The Ld. Advocates 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. 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 was of the view that the CFG is rightly classifiable under CTH 70051090, the action initiated by the Department appears to be contrary to its earlier stance maintained before the CAG. 9. It has been argued that the only requirement for CFG to get classified under 70051090 is that the CFG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 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, reflecting or non- reflecting layer to get classified under Tariff item 7005 1090. 9.3 It is already on record that the Department have drawn samples and tested the same with the Government notified laboratory namely CSIR-CGCRI, Kolkata which had reported that the imported CFG sample is having a microscopically thin coating of Metal, namely TIN, and it is an absorbent/non-reflective layer. This fact is also not in dispute in this proceeding. However, the SCN alleges that such absorbent reflective tin layer present in the CFG is obtai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der 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 dated 17.07.2023. (Page No. 43 of Synopsis filed)] 9.8 He also submitted that, identical goods manufactured by domestic manufacturers viz., Saint Gobain have also classified the goods under CTH 7005 1090 and assessed accordingly both for domestic clearances and exports. 9.9 We find that Department s insistence of absorbent layer to be only on the air side for its classification under CTH 70051090 was vehemently contested by the counsels for the appellant and they submitted that, neither the tariff heading nor the chapter note provides for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Principal Commissioner/Commissioner of Customs, on the impugned subject matter. 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, tinted or green in colour. The heading 7005 10 covers non-wired glasses having an absorbent, reflecting or non-reflecting layer and the headings 7005 21 to 7005 29 deal with non-wired glasses whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aracteristics, 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 on the applicant s submission about the country of origin and the manufacturer of the subject goods, exemption notification no.46/2011-Cus., dated 01.06.2011, appears to be available, in terms of the said notification, in each case of import the applicant would have to produce evidence before the Deputy/Assistant Commissioner of Customs to substantiate the origin of subject goods. 11. In view of the above discussions, I hold that the subject goods Clear Float Glass having an absorbent layer merit classification under heading 70.05 and more specifically, under subheading 70051090 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity 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 law that burden of proof of classification is on the Department. The classification has been changed on the basis of Test Reports. I have carefully going through the copies of Test Reports from CGCRI, Kolkata. I find that said Test Reports are not conclusive enough to reject the declared classification by the Appellant. Rather, the said Reports do mention the presence of Layer. The exact findings of some of the Test Reports in this regard are as under:- c) The Tin Side is detected under UV illumination using the detecter. i) An absorbent layer (Tin) is observed on one side of the glass which is fluorescent under UV illumination. j) The glass is found to be coated with ZnSO4 film on opposite to tin side as pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned 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 Agreement between the Government of Member States of ASEAN and Republic of India) Rules, 2009. 11.1 On the issue of invocation of extended period, we have considered the Ld. Counsel s submissions that the appellant has been importing Clear Float Glass for a long time by claiming classification under Tariff item 7005 1090 and there was no dispute in this regard except for the proceedings initiated in view of the CRA objection raised. It has been submitted that even after the CRA objection for period under dispute, the provisional assessments were finalised allowing the classification under CTH 7005 1090. In the absence of any finding of positive suppression by the Appellant in the impugned order, we find that the allegation of wilful ..... X X X X Extracts X X X X X X X X Extracts X X X X
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