Supreme Court exempts imported lenses as finished products under Customs Tariff

The Supreme Court held that the imported spectacle lenses, classified under Customs Tariff Heading 9001.40.90 & 9001.50.00, were entitled to exemption under Notification No.6/06CE. The lenses, although initially considered semi-finished by the assessing authority, were deemed finished spectacle lenses by the Court due to customization before customer fitting. The Court overturned the lower judgments, ruling in favor of the appellant and granting them the exemption. The appellant's historical entitlement to exemption and the nature of the goods as finished spectacle lenses were crucial in the Court's decision.

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Issues:
Classification of imported spectacle lenses under Customs Tariff Heading, denial of exemption under Notification No.6/06CE, historical background affecting entitlement to exemption.

Analysis:
The appellant imported spectacle lenses classified under Customs Tariff Heading 9001.40.90 & 9001.50.00, seeking exemption under Notification No.6/06CE. However, the assessing authority classified the goods under Chapter Heading 9001.90.90, denying the exemption as the goods were considered semi-finished. The appeal and CESTAT appeal were dismissed, leading to the Supreme Court's intervention.

The determination of the appellant's entitlement to the exemption hinged on historical treatment of such goods until the Notification dated 1st March, 2006. The historical background revealed that spectacle lenses attracted nil duty until 2004, with subsequent exemptions granted. Despite changes in the tariff schedule, the Department clarified that the introduction of 8-digit headings did not alter the duty rates or exemptions. Therefore, the appellant was entitled to the exemption under Notification No.6/06CE even for the relevant period.

The authorities below erred in reclassifying the goods as semi-finished spectacle lenses, thus denying the exemption meant for finished spectacle lenses. The Supreme Court clarified that the lenses were power lenses imported by the appellant, treated as semi-finished due to customization before fitting them for customers. As these lenses were to be finished before use, they should be considered "to be finished spectacle lenses" and not semi-finished. The Court overturned the CESTAT judgment, ruling in favor of the appellant's entitlement to the exemption under Notification No.6/06CE.

In conclusion, the Supreme Court set aside the CESTAT judgment, holding that the imported goods were indeed entitled to exemption under Notification No.6/06CE. The appeals were allowed, granting the appellant consequential benefits.

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