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Court Rules in Favor of Swastik Glass Traders on Float Glass Classification

Background

In a significant ruling, the Customs, Excise and Service Tax Appellate Tribunal in Chennai addressed the appeal filed by M/s. Swastik Glass Traders against the Commissioner of Customs. The case revolved around the classification of imported Clear Float Glass (CFG) from Malaysia, which the appellant had classified under Customs Tariff Heading (CTH) 7005 1090, availing benefits under the ASEAN-India Free Trade Area (AIFTA). The Commissioner had reclassified the goods under CTH 7005 2990, leading to a demand for short levied duties amounting to over ₹4 crore.

Arguments

The appellant argued that the classification under CTH 7005 1090 was correct, supported by test reports indicating the presence of an absorbent tin layer on the glass. They contended that the classification was consistent with previous assessments and legal precedents. Conversely, the Commissioner of Customs maintained that the CFG did not meet the criteria for classification under the claimed heading, asserting that the absorbent layer was a natural result of the manufacturing process rather than a deliberate coating.

Court's Analysis and Reasoning

The Tribunal analyzed the arguments presented by both parties, emphasizing the importance of the test reports from the CSIR-CGCRI, which confirmed the presence of an absorbent layer on the CFG. The court noted that the classification under CTH 7005 1090 was supported by legal precedents and that the Department's change in stance following an audit objection was not sufficient to override established classifications. The court also highlighted that the Customs Tariff Act does not specify which side of the glass the absorbent layer must be on, thus supporting the appellant's classification.

Decision

Ultimately, the Tribunal ruled in favor of M/s. Swastik Glass Traders, confirming that the imported Clear Float Glass is appropriately classified under CTH 7005 1090. The court set aside the impugned order from the Commissioner, allowing the appellant to benefit from the exemption under Notification No. 46/2011-Cus. This decision reinforces the importance of consistent classification practices in customs law and the need for clear evidence in disputes over tariff classifications.