The Madras High Court ( HC ) in a recent case ruled that light green float glass ( tinted non-wired type ) shall be classified under tinted glass for duty purposes.
The case stems from the classification of imported goods by the petitioner, M/s. Asahi India Glass Ltd., a company engaged in the manufacturing of processed laminated and tempered glass, including glass for automotive purposes. The company has been importing a product known as “Light Green Tinted Float Glass” since 2011 and classified it under the Customs Tariff Heading (CTH) 70051010. This classification allowed them to clear the product under a concessional rate of customs duty as per the ASEAN Free Trade Agreement (FTA).
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In May 2022, the Customs Department issued an audit consultative letter to the petitioner, challenging the classification of the goods and claiming that they should instead be classified under CTH 70052110. The change in classification would result in a higher duty liability. The department argued that the product did not meet the criteria for classification under CTH 70051010, which covers non-wired glass with an absorbent, reflecting, or non-reflecting layer. The department contended that the imported glass lacked such a layer and was instead a body-tinted product, making it fit for classification under CTH 70052110.
The petitioner responded to the audit consultative letter, asserting that the imported glass did, in fact, have an absorbent layer of tin, as confirmed by test reports. The petitioner-company further supported its position by referring to earlier decisions by the Customs Department, which had accepted the classification under CTH 70051010 in prior imports. In spite of this response, the Customs Department issued a show cause notice in August 2023, demanding a higher duty liability of over Rs. 11 crore and reclassification of the goods under CTH 70052110.
Aggrieved, the petitioner-company challenged the show cause notice in the High Court of Madras, filing three writ petitions.
In the first petition, the petitioner sought to quash the show cause notice, arguing that the notice was based on erroneous grounds and ignored the company’s earlier responses. The second petition sought a mandamus (court order) directing the Customs Department to clear the goods under CTH 70051010, as previously determined by various authorities. In the third petition, the company sought a declaration that its classification of the goods under CTH 70051010 was correct.
During the proceedings, senior counsel for the petitioner argued that the Customs Department’s attempt to reclassify the goods was unjustified, given that the same product had been classified under CTH 70051010 for over a decade. The counsel pointed out that the goods had consistently been classified and cleared under the same heading in previous transactions, and that appellate authorities had upheld this classification in earlier disputes. Additionally, the test reports used by the Customs Department to justify the reclassification were said to be identical to those used in earlier cases where the classification under CTH 70051010 was accepted.
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The bench of Justice Senthil Kumar Ramamoorthy after examining the facts of the case, agreed with the petitioner-company’s argument that the Customs Department could not re-open the classification issue, which had already been settled by appellate authorities.The Court stressed that there was no fraud or willful misstatement on the part of the petitioner, as the goods had consistently been imported under the same classification without any objections from the authorities.
In result, the Court quashed the show cause notice issued by the Customs Department and directed the department to clear the goods under CTH 70051010, provided that the goods imported matched the description of “Light Green Float Glass (Tinted Non-Wired Type).” However, the Court declined to issue a declaration affirming the correctness of the classification, noting that such a declaration would require a detailed examination of the goods, which was beyond the scope of the writ jurisdiction.
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