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“Indirect Tax I Indirect Tax Litigation I Customs & FTP I Central Licensing I Arbitration I Advisory”

Dated: 15.04.2025

CESTAT Chennai emphasized that classification in the COO is not binding for tariff purposes under Indian customs law

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Chennai Bench allowed the appeals filed by M/s. Suraj Constructions, affirming that the imported Clear Float Glass (CFG) from Malaysia is correctly classifiable under CTH 7005 10 90, thereby entitling the importer to preferential duty benefit under Notification No. 46/2011-Cus dated 01.06.2011 (Sl. No. 934).

Background:

• Suraj Constructions had regularly imported CFG under CTH 7005 10 90 claiming zero basic customs duty (BCD) under the ASEAN-India Free Trade Agreement (AIFTA).
• During five specific imports made in 2022, the Assessing Officer reclassified the goods under CTH 7005 29 90, based on the Country of Origin Certificate (COO) and denied AIFTA benefits.
• The importer submitted supporting documents and requested provisional assessment, which was rejected.
• Appeals to the Commissioner (Appeals-II) were also dismissed, prompting the present appeal to the CESTAT.

Tribunal’s Observations:

• The tribunal noted that the presence of a microscopically thin absorbent layer (tin coating) on one side of the glass meets the condition of classification under CTH 7005 10 90, as clarified by Chapter Note 2(c) of Chapter 70.
• The Central Glass and Ceramic Research Institute (CGCRI) confirmed in test reports that the tin layer on one side is absorbent and non-reflective.
• CESTAT Chennai relied on precedents, including:
  • Bagrecha Enterprises Ltd. (Kolkata & Chennai Tribunals)
  • Navakar Impex Pvt. Ltd.
  • Enviro Safety Glass, Float Glass Centre, and others
• The tribunal emphasized that classification in the COO is not binding for tariff purposes under Indian customs law.

Key Legal Points:

• Chapter Heading 7005 distinguishes CFG having an absorbent layer (CTH 7005 10 90) from others (CTH 7005 29 90).
• The CGCRI test reports and technical literature supported the classification claimed by the importer.
• The tribunal reiterated the principle that judicial precedents override departmental circulars, even recent ones like Circular No. 23/2024-Customs dated 14.11.2024.

Final Verdict:

• The Tribunal allowed all five appeals of Suraj Constructions.
• Confirmed classification under CTH 7005 10 90.
• Restored benefit of Notification No. 46/2011-Cus dated 01.06.2011 (Sl. No. 934).
• Set aside the orders of the Commissioner (Appeals-II), Chennai.

Significance:

• Reinforces that COO certificate contents cannot override tariff classification rules.
• Promotes judicial consistency and correct application of customs classification based on scientific testing and statutory definitions.
• Offers clarity to importers of clear float glass on appropriate classification and FTA benefit eligibility.

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Source: CESTAT Chennai

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