TMI Blog2008 (9) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... r (J) and P. Karthikeyan, Member (T) Shri V. Lakshmikumaran, Advocate, for the Appellant. Smt. R. Bhagyadevi, SDR, for the Respondent. [Order per: P. Karthikeyan, Member (T)]. - During 2006, telecom companies Bharti Airtel (Bharti), Vodafone Essar South Ltd., Vodafone Essar Digilink Ltd., Vodafone Essar Ltd. and Vodafone Essar East Ltd. had imported optical Fibre Cables (OFC) and the Tamil Nadu Telecommunications Ltd. (TNTL) imported materials to manufacture Optical Fibre Cables. The importers availed exemption in terms of Notification No. 24/2005-Cus., dated 1-3-05.This notification provided exemption from basic Customs duty on import of various Information Technology Agreement bound goods falling under, inter alia, CSH 8544.7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 008 Shri M.V. Venkateswaralu 7423/2008 dt. 20-3-08 -------- 25,00,000 2. The issue involved in the appeals is the scope of Optical Fibre Cables of CSH 854470 of Customs Tariff From the literature and other records produced, relevant tariff entries and the HSN explanatory notes, we find that an optical fibre consists of three main regions, (a) a central cylinder or core; (b) a surrounding layer of material called 'cladding' and (c) an outer coating over the cladding. The core transmits the light waves, the cladding keeps the light waves within the core and provides some strength to the core. The cladding has a lower refractive index than that of the core. In order to keep the light in the core, the outer coa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th to add further protection. Subsequently, these individually sheathed optical fibres were fitted with a common sheath and/or armour and other protective mechanisms to form a telecommunication cable. The DIT clarified that the distinction in the description of the goods in question namely optical fibre cables in headings 8544 and 9001 lay in the fact that the former referred to "individually sheathed fibres", whereas the latter referred to "a sheath containing one or more optical fibre bundles, the fibres of which are not individually sheathed". The Authority found the product Alcate wanted to import was fibres without individual sheathing as the sheathing the fibres had was an integral part of the fibre and not the sheathing referred to i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o products and the difference between them. Commissioner erroneously followed the Circular in deciding the classification of the goods to be 900101. The Commissioner had not applied his mind and classified the goods as proposed in the Notice without examining the merits. The ld. Counsel also made a presentation before us, canvassing the appellants' case of classification of OFCs with samples and literature. 6. As per Section 28J of the Customs Act, 1962 (the Act), an advice is sued by the AAR is binding on the Commissioner and the party seeking advice and none else. The advice is confined to the issue referred. The Commissioner had relied on the impugned AAR incorrectly and decided the classification dispute. The order therefore deserve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y sheathed fibres, whether or not assembled with electric conductors or fitted with connectors. The sheaths are usually of different colours to permit identification of the fibres at both ends of the cable.... Optical fibre cables are used mainly in telecommunications because their capacity for transmission of data is greater than that of electrical conductors." (2) Sub-heading 9001.10 of the Customs Tariff covers, inter cilia, optical fibre cables not covered by CH 8541 and the entry reads as follows: "Optical fibres and optical fibre bundles; optical fibre cables other than those of heading 8544; sheets and plates of polarizing material; lenses (including contact lenses), prisms, mirrors and other optical elements, of any material, un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the goods imported correctly, it was the duty of the assessing officer to correctly assess the goods. Classification of the goods, along with valuation and import policy, was a major aspect of assessment, the proper officer was entrusted with. We find that the assessees have been unfairly penalized by the Commissioner. We find that even in a case where the goods are classified by the proper officer in a heading other than the one declared, penalty is not justified, it was vehemently argued by the ld. Counsel that the hefty penalty of Rs. One crore imposed on a technocrat in charge of procurement of materials in Bharti was perverse exercise of power. He cited the decision of the Tribunal in Z.U. Alvi v. CCE, Bhopal reported in 2000 (11 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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