2007 (12) TMI 115 - AT - Customs

Imported semi-finished spectacle lens - there are millions of combinations of various powers & depending on the individual needs the semi-finished lens is further worked upon to produce finished lens - in view of fact that they are optically worked they can be more appropriately considered only as optical elements so classifiable u/ch 9001 90 90 as other optical elements - held that the Exem. Not. 6/06 is not be available to semi-finished ophthalmic blanks- decision of lower authority upheld

Summary

Issues Involved:
1. Classification of semi-finished spectacle lens.
2. Entitlement for exemption from countervailing duty under Notification No. 06/06-C.E., dated 1-3-2006.

Issue-wise Detailed Analysis:

1. Classification of Semi-Finished Spectacle Lens:

The appellant imported semi-finished spectacle lenses and sought classification under the Customs Tariff heading 9001 40 90 and 9001 50 00. However, the Original Authority reclassified these under heading 9001 90 90 as "other optical elements." The reasoning was that semi-finished spectacle lenses, referred to as 'ophthalmic blanks,' needed further processing (grinding, polishing, and cutting) to become usable spectacle lenses. The lower authority noted the declaration on the packages stating they were "specially packed for exclusive use as raw material for processing by laboratories and not meant for retail sale in packaged condition." The Tribunal upheld this classification, agreeing that the semi-finished lenses were not fully finished spectacle lenses and thus fell under the category of other optical elements.

2. Entitlement for Exemption from Countervailing Duty:

The appellant sought exemption from countervailing duty under Notification No. 06/06-C.E., dated 1-3-2006, which applies to "spectacle lenses." The lower authorities denied this benefit, concluding that the exemption covered only fully finished spectacle lenses. The Tribunal supported this view, emphasizing that the semi-finished lenses required additional processing to become spectacle lenses and thus did not meet the criteria for exemption.

The appellant argued that semi-finished lenses, which are customized to individual vision defects, should be considered spectacle lenses under Rule 2(a) of the Rules of Interpretation. They presented expert opinions and highlighted that semi-finished lenses have no other applications or usage besides being processed into spectacle lenses. However, the Tribunal noted that the exemption notification's language was clear and unambiguous, applying strictly to fully finished spectacle lenses. The Tribunal referenced several legal precedents, including decisions by the Supreme Court, which supported a strict interpretation of exemption notifications. It was concluded that the semi-finished lenses did not qualify for the exemption as they were not fully finished spectacle lenses.

Conclusion:

The Tribunal upheld the lower authorities' decisions, confirming the classification of semi-finished spectacle lenses under heading 9001 90 90 and denying the benefit of the exemption notification. The appeal was dismissed, reinforcing the principle that exemption notifications must be interpreted strictly based on their clear and unambiguous language.