2005 (4) TMI 110 - AT - Central Excise

Classification of Manufactured Optical fibre cables - demand of differential duty raised u/s 11A - finalisation of the assessment - Whether parts and accessories of optical fibre cables are classifiable under Heading 90.33 as against 85.44 of the Central Excise Tariff - HELD THAT - The Revenue has also not brought any material on record to prove that this thin coating of acrylate is not invisible to the naked eyes. The Appellants have also brought on record the Certificate given by the Department of Electrical Engineering of SV Government Polytechnic Bhopal according to which cables manufactured by the assessee are multi fibre sheathed cables. They have also brought on record the opinion given by the Chief Electrical Manager (P) in the Office of Chief General Manager Telecommunication Projects Bombay according to which the optical fibre cables in question is not made up by individually sheathed fibre. Revenue on the other hand has not brought any technical opinion to rebut the opinion/Certificate brought on record by the assessee. The Deputy Commissioner in the Order in Original No. 13/2002 has referred to the test report given by the Chief Examiner CRCL which according to him does not give direct reply to the query whether optical fibre cables are made up of individually sheathed fibre or not. We also agree with the learned Advocate that as the classification of the impugned product depends only on the fact whether the optical fibre cables is individually sheathed or not the end use can not be a factor for determining the classification of the fibre. Accordingly we hold that the Department has not proved that the impugned optical fibre cables is made up of individually sheathed fibres so as to warrant classification under Heading 85.44. Accordingly we set aside the impugned order and allow all the Appeals filed by the assessee without going into other submissions raised by the learned Advocate. Consequently the Appeal filed by the Revenue is rejected.

Summary

Issues Involved:
1. Classification of Optical Fibre Cables under Heading 90.01 versus Heading 85.44 of the Central Excise Tariff Act.
2. Classification of parts and accessories of optical fibre cables under Heading 90.33 versus Heading 85.44 of the Central Excise Tariff.
3. Recoverability of differential duty under Section 11A of the Central Excise Act in view of the revalidation of actions taken under Section 11A per Section 110 of the Finance Act.

Detailed Analysis:

Issue 1: Classification of Optical Fibre Cables

The primary issue revolves around whether the Optical Fibre Cables manufactured by the assessee should be classified under Heading 90.01, as claimed by the assessee, or under Heading 85.44, as confirmed by the Commissioner (Appeals). The assessee argued that the optical fibre cables were not made of individually sheathed fibres, which is a requirement for classification under Heading 85.44. They contended that the fibres were not individually sheathed but were placed in loose tubes, which does not meet the criteria for Heading 85.44. The Department, however, argued that the UV cured acrylate coating on individual fibres amounted to sheathing, thus fitting the description under Heading 85.44.

The Tribunal considered the manufacturing process and found that the fibres were not individually sheathed but were placed in loose tubes containing two fibres each. The Tribunal noted that the thin UV cured acrylate coating did not constitute sheathing as per the Explanatory Notes of HSN under Heading 90.01. The Tribunal also considered expert opinions and certificates provided by the assessee, which supported their claim. The Department failed to provide contrary evidence. Consequently, the Tribunal held that the optical fibre cables were not made up of individually sheathed fibres and thus should be classified under Heading 90.01.

Issue 2: Classification of Parts and Accessories

The second issue concerned the classification of parts and accessories of optical fibre cables. The assessee claimed classification under Heading 90.33, while the Department proposed Heading 85.44. The Tribunal did not provide a separate detailed analysis for this issue but impliedly resolved it by setting aside the impugned order and allowing the appeals filed by the assessee, thus favoring the classification under Heading 90.33.

Issue 3: Recoverability of Differential Duty

The third issue involved the recoverability of differential duty under Section 11A of the Central Excise Act. The Department argued that the assessments were provisional, and thus, the differential duty was recoverable. The Tribunal noted that the classification issue was central to the determination of duty liability. Since the classification was resolved in favor of the assessee, the demand for differential duty did not survive. Consequently, the Tribunal set aside the impugned order and allowed the appeals filed by the assessee, rejecting the appeal filed by the Revenue.

Conclusion:

The Tribunal concluded that the optical fibre cables manufactured by the assessee were not made up of individually sheathed fibres and thus should be classified under Heading 90.01. The parts and accessories of optical fibre cables were also impliedly classified under Heading 90.33. The demand for differential duty was not sustainable, and the appeals filed by the assessee were allowed, while the appeal filed by the Revenue was rejected.