TaxTMI 
TaxTMI 
2008 (9) TMI 177
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....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 8544.70 of the Customs Tariff and goods imported for the manufacture of such goods. The exemption was subject to the assessee following the Customs (Import of Goods at (Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996. These assessments have been revised in the impugned orders. The Commissioner found that the optical fibre cables involved in all these cases fell under CSH 9001 10 as they did not conform to the tariff description of CSH 8544 ....
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.... cladding has a lower refractive index than that of the core. In order to keep the light in the core, the outer coating is a protective layer applied over the fibre cladding to provide physical and environmental protection for the fibre. Optical fibers are usually presented on reels and may be several kilometers in length. They are used to make optical fiber bundles and optical fiber cables (OFC). Fibre bundles conduct light or image and have a common sheath. These OFCs usually end in connectors at either end and are used in optical instruments such as endoscopes. OFCs comprising individually sheathed fibres carry data, run into several kms and are also rolled on reels. Dispute is as to in which of these categories of OFCs the impugned cabl....
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.... sheathing as the sheathing the fibres had was an integral part of the fibre and not the sheathing referred to in the tariff description of OFC of CSH 85447090. The said ruling was passed vide AAR/14-27(Cms)/2006, dated 28-2-2006 reported in 2006 (197) E.L.T. 176 (A.A.R). 4. Assessment of imports of OFCs and other goods to manufacture OFCs through various ports were taken up by DRI for scrutiny and notices issued. It was alleged that all consignments of OFCs imported fell under CSH 900110. The imports had wrongly been extended the benefit of Notification No. 24/2005-Cus.The product manufactured by TNTL with the imported inputs was also found to be OFCs of CSH 900110 whereby the materials imported by I'NI'L were disentitled to exemption und....
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....ied on the impugned AAR incorrectly and decided the classification dispute. The order therefore deserved to be set aside. 7. The ld. SDR defended the impugned orders and submitted that the Commissioner could validly rely on the ruling of the AAR for its persuasive value. The impugned goods were similar to the OFCs considered by the Authority. Fibres of the impugned goods not being individually sheathed, they did not fall under CSH 854470 but fell under CSH 900110. 8. We have carefully considered the facts of the case and the submissions by both sides. The dispute involved is classification of OFCs imported by the parties and those manufactured by TNTL. The competing entries for the impugned OFCs are CSH 854470 canvassed by the assessee an....
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....cluding contact lenses), prisms, mirrors and other optical elements, of any material, unmounted, other than such elements of glass not optically worked." "The HSN Explanatory Notes on this sub-heading reads as under: "optical fibre cables of this heading (which may be fitted with connectors) consist of a sheath containing one or more optical fibre bundles, the fibres of which are not individually sheathed." 9.1 In the case of the OFCs considered by the Commissioner, the fibres were not individually sheathed and each fibre instead had coating which was part of the fibre itself. As the fibres of the OFCs were not individually sheathed, they fell under CSH 9001 10 and not CSH 854470. In arriving at the above decision the Commissioner follow....
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....he decision of the Tribunal in Z.U. Alvi v. CCE, Bhopal reported in 2000 (117) E.L.T. 69 (Tribunal), where the Tribunal had found that the Commissioner imposing a penalty of Rs. 50 Crores on the executive of BHEL as an instance of the adjudicator going crazy and Tribunal had passed strictures against the Commissioner. He submitted that the Commissioner had similarly capriciously imposed penalty of Rs. One crore on Shri. S.P. Singh, an executive of Bharti Airtel. Similar heavy penalties were imposed on the Managing Director (Rs. 30 lakhs) and a DGM (Rs. 25 lakhs) of TNTL. We do not find these penalties to be justified in law. 9.3 Commissioner has denied exemption to materials imported by TNTL on a finding that the OFCs manufactured were goo....