2024 (5) TMI 943 - CESTAT CHENNAI

Reclassification 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.