Failure of Dept to Prove Misclassification: CESTAT sets aside Customs Classification of Optical Power Ground Wire [Read Order]
The authorities had relied merely on catalogues available in the public domain without substantiating that the imported goods matched those descriptions.
Optical - Power - Ground - Wire - taxscan
Optical - Power - Ground - Wire - taxscan
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside an order denying customs exemption to M/s. Kalpataru Power Transmission Ltd. by reclassifying imported Optical Power Ground Wire Fibre Cables (OPGW).
The Tribunal held that the Customs Department failed to substantiate the reclassification under Tariff Heading 9001 and had not produced conclusive test evidence.
The appellant, Kalpataru Power Transmission Ltd., imported Optical Power Ground Wire Fibre Cables and their accessories, declaring them under Customs Tariff Heading (CTH) 8544 with corresponding accessories under 853670. They claimed exemption under Notification No. 24/2005-Cus dated 1 March 2005. However, the Adjudicating Authority denied the classification and exemption, holding that the goods were classifiable under CTH 9001 and accessories under 7616, which was upheld by the Commissioner (Appeals).
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Counsel for the appellant, Shri Shridev Vyas, contended that the imported goods were individually sheathed fibre cables, correctly classifiable under Chapter 85. He emphasized that samples had been drawn at the time of import, but the corresponding test report was never furnished. The absence of such test evidence, he argued, was crucial since classification depended on whether the fibres were individually sheathed.
The Department, represented by Smt. Anandalakshmi Ganeshram, maintained that the product’s main function was telecommunication, making it classifiable under Tariff Heading 9001. She cited technical literature and chapter notes suggesting that OPGWs were not individually sheathed, thereby excluding them from Heading 8544.
The Bench comprising Shri M. Ajit Kumar (Technical Member) and Shri P. Dinesha (Judicial Member) noted that as per the Supreme Court’s rulings in Union of India v. Garware Nylons Ltd. (1996) and CCE v. Vicco Laboratories (2005), the burden of proof for correct classification rests with the revenue authorities.
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Referring to CBEC Circular No. 12/2006-Cus dated 28 February 2006, the Tribunal observed that while the circular distinguished between individually sheathed and unsheathed optical fibre cables, no test report or expert opinion was produced in this case. The authorities had relied merely on catalogues available in the public domain without substantiating that the imported goods matched those descriptions.
The Tribunal criticised the reliance on assumptions and public-domain catalogues instead of concrete evidence, calling it “inferior proof.” It reiterated that classification must be based on physical characteristics and not inferred from usage or general technical literature.
The CESTAT set aside the impugned order, holding that the Revenue failed to establish the correctness of the reclassification under Heading 9001. The appeal was allowed with consequential relief to the appellant.
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