2017 (3) TMI 1193 - AT - Customs

Classification of Fiber Optic Ferrule under Customs Tariff Heading 8538 upheld; Revenue appeal dismissed

The Tribunal held that the Fiber Optic Ferrule imported by M/s Pranav Enterprises should be classified under Customs Tariff Heading 8538 as part of Fiber ... Classification of imported goods - FOF (Fibre Optic Ferrule) - The respondent-assessee is arguing that appropriate classification for the goods in question is 85389000, which is the order of the Commissioner (Appeals) whereas Revenue is pleading that subject impugned goods deserve classification under Customs Tariff Heading 69149000 - Held that: - There is no dispute that the goods imported are Zirconia Ferrules named as Fiber Optic Ferrule (FOF) and they are important part of Fiber Optic Connectors of Customs Tariff Heading 8536. The Revenue wants to classify the item under Chapter 6914 because of its constitution as it is made up of ceramics (zirconia oxide); but because of the reason that the identity of the article is associated with its primary function, when it is essential part of fiber optic connector of 8536; the item is to be classified under Chapter Heading 85389000. When we refer to General Explanatory Notes to Chapter 85, we do not find any exclusion in case of the item in question which is Zirconia Ferrule (declared in the Bill of Entry) as Fiber Optic Ferrule (FOF). Therefore, when there is no specific exclusion for the item in question even when they are made up of ceramic, and when the item is specific part of Fiber Optic Connectors of Tariff Heading 85367000, there it deserves classification as part suitable for use principally with the apparatus, of heading under Chapter 8536 and would have classification under Heading 8538. Thus, the item viz. Fiber Optic Ferrule imported by the respondent deserves to be classified under Chapter Heading 8538 being part of Optical Fiber Connector of sub heading 85367000 of Customs Tariff. Appeal dismissed - decided against Revenue. Issues:Classification of Fiber Optic Ferrule under Customs Tariff Heading 69149000 or 85389000.Analysis:1. Classification Dispute: The case involved a dispute over the classification of Fiber Optic Ferrule (FOF) imported by M/s Pranav Enterprises. The Deputy Commissioner of Customs classified the goods under Tariff Item 69149000, while the Commissioner (Appeals) classified them under Customs Tariff Heading 85389000.2. Arguments by the Revenue: The Revenue argued that the goods, being made of Zirconia (ceramic), should be classified under Chapter Heading 6914 of ceramic articles. They contended that the composition of Zirconia gives the goods their essential character, warranting classification under ceramics rather than as a part of Fiber Optic Connectors under Chapter Heading 85389000.3. Arguments by M/s Pranav Enterprises: The importer argued that the goods are an essential part of Fiber Optic Connectors under Heading No. 85367000, thus should be classified under Chapter Heading 85389000 regardless of the material used.4. Legal Precedents: The respondent cited legal precedents, including decisions by the Hon'ble Apex Court in CCE Vs. Polyflex (Pvt.) Ltd. and Atul Glass Industries Ltd. These cases emphasized that the primary function of an article determines its classification, especially in cases where the composition or use of the product is in question.5. Decision: After considering the arguments and case laws cited, the Tribunal held that the Fiber Optic Ferrule imported by M/s Pranav Enterprises should be classified under Customs Tariff Heading 8538. The Tribunal reasoned that since the goods are an essential part of Fiber Optic Connectors, they should be classified under Chapter Heading 85389000, which covers parts suitable for use with electrical apparatuses.6. Conclusion: The Tribunal dismissed the appeal filed by the Revenue and upheld the classification of the Fiber Optic Ferrule under Customs Tariff Heading 85389000. The decision was based on the primary function of the goods as an essential part of Fiber Optic Connectors, aligning with legal principles and precedents cited during the proceedings.