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2018 (1) TMI 959 - AT - CustomsClassification of goods - Optical Fibre Cables (OFC) - Whether OFC imported by Vodafone Group of Companies and used in Telecommunication are classifiable under Customs Tariff Heading 8544 and eligible for exemption under N/N. 20/2005 dated 01/03/2005 or they would fall under Customs Tariff Heading 9001 leviable to basic Customs Duty at 10% under N/N. 21/2002-Cus dated 01/03/2002? - The entire argument of the appellant hinges on their claim that the 'Dual Acrylic Coating' amounts to sheathing of fibre. Interpretation of statute - the term 'Sheath' or 'Sheathed' as it appears in the Tariff and HSN - Held that: - The HSN is relevant for the proper classification of the said product - It is apparent the term coating and sheathing have different meaning in the tariff. In fact the term 'sheath' has been used to describe separate object as can be seen from the table 4.3.1 above. It is seen that the expression used in many places is 'encased in rigid sheath', 'encased in sheath', 'in a sheath composed of layers of paper', 'in a sheath of lead or tin', 'machines for braiding a wire sheath on hose of rubber', 'consisting of a simple wire mesh sheath' etc. which clearly indicates that 'sheath' is by itself an object. In those circumstances it is seen that the tariff does not recoganise coating as sheathing and treats the two as different. The term 'sheath' refers to a separate object which is used to encase other items. Whether the telecommunication wires and cables are classifiable under heading 85.44 and therefore the fibre optic cables used for telecommunication should also be classified under the same heading? - Held that: - all insulated conductors (including enamelled or anodised) are classifiable under heading 85.44. The heading is not limited to telecommunication wires. It covers all insulated wires and cables, including those used for telecommunication. The tariff has deliberately chosen to differentiate between the optical fibre cables containing individually sheathed fibres and others. The tariff /HSN classifies them separately in different headings and different chapters. The legislature if it wished to classify all optical fibre telecommunication cables under heading 85.44 could have stated so. The HSN specifically mentions only the telecommunication wires made up of insulated wires. It is seen that the tariff entries do not make any distinction on the basis of use of the product. The sole distinction is based on the basis of the manner in which the fibres are 'sheathed' - it is obvious that the coating over the cladding is feature of all optical fibres (including those used in medical imaging and mechanical engineering inspection) and not merely those used in telecommunication. The literature and other evidence relied upon by the referral bench and also produced by both the parties during this hearing does not establish that the ‘dual acrylic coating' results in 'individually sheathed fibre'. Optical Fibre Cables (OFC in short) imported by Vodafone Group of Companies and used in Telecommunication are not classifiable under Customs Tariff Heading 8544 and they would fall under customs Tariff Heading 9001. Reference disposed off.
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