CESTAT Bars Customs Duty Demand on OPGW Cables for Want of Sample Testing

The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has dismissed the Revenue’s appeal and allowed the importer’s appeal, holding that customs duty demands on Optical Ground Wire (OPGW) fibre optic cables cannot be sustained in the absence of fresh sample testing and proof of suppression. The bench of R. Muralidhar (Judicial Member) and Rajeev Tandon (Technical Member) has observed that the classification of OPGW cables has been under litigation for nearly two decades and remains sub judice before the Supreme Court, which has stayed the Larger Bench ruling in Vodafone Essar. In such circumstances, the Tribunal held that extended limitation provisions could not be invoked, particularly when the issue involved interpretation of tariff entries and there was no concealment of facts. The case arose from imports of Optical Ground Wire (OPGW) fibre optic cables made during the period from June 2016 to June 2021. The importer had consistently classified the goods under Customs Tariff Heading (CTH) 8544 70 90. Following investigations, the Directorate of Revenue Intelligence (DRI) issued a show cause notice in June 2021 alleging that the goods were classifiable under CTH 9001 00 00, resulting in a proposed differential duty demand of over ₹2.38 crore along with interest and penalties. The adjudicating authority partly accepted the importer’s case, dropping demands of about ₹2.23 crore on the ground of limitation and absence of suppression, while confirming a smaller demand of ₹14.85 lakh for the normal period. Both the importer and the Revenue challenged different portions of this order before the Tribunal. The department argued that detailed investigations showed OPGW cables were classifiable under CTH 9001 00 00, relying heavily on the Larger Bench decision in Commissioner of Customs (Import), Mumbai v. Vodafone Essar Gujarat Ltd. It was contended that the importer knowingly misdeclared the classification and that the adjudicating authority erred in granting relief on limitation. The Revenue also sought to revive penalty proceedings against company officials, though no separate appeals were filed against them. The importer countered that the dispute was purely one of classification and interpretation, with no suppression or misdeclaration. It highlighted that identical goods imported earlier had been tested by the Electronics Regional Test Laboratory (EAST) in 2014, which confirmed that individual protective coating was provided on each fibre core. Based on this test report, Customs had accepted classification under CTH 8544 70 90 and finalized provisional assessments. The importer further pointed out that the Revenue never drew samples or conducted any fresh testing for the consignments imported between 2019 and 2021. It argued that the Department could not rely on assumptions, partial correspondence, or general technical opinions without concrete evidence in the form of test reports. The CESTAT noted that the classification of OPGW cables has been under litigation for nearly two decades and remains sub judice before the Supreme Court, which has stayed the Larger Bench ruling in Vodafone Essar. In such circumstances, the Tribunal held that extended limitation provisions could not be invoked, particularly when the issue involved interpretation of tariff entries and there was no concealment of facts. On the Revenue’s appeal, the Tribunal upheld the adjudicating authority’s decision to drop the extended-period demand, observing that consistent judicial precedent bars invocation of suppression in classification disputes involving interpretational issues. On the importer’s appeal, the Tribunal found that the confirmed demand for the normal period was also unsustainable. It emphasized that Customs had not drawn or tested samples for the disputed consignments, despite Board Circulars mandating verification in each case. Relying on settled law, the Tribunal reiterated that test results of one consignment cannot automatically be applied to others and that each bill of entry constitutes a separate assessment. The Tribunal also observed that the earlier test report in the importer’s own case had been accepted by the Department and had attained finality, including in subsequent refund litigation decided in favour of the importer. In the absence of any new evidence or testing, reopening the issue after several years was held to be unjustified. The CESTAT dismissed the Revenue’s appeal in entirety and allowed the importer’s appeal, setting aside the confirmed demand of Rs. 14.85 lakh along with consequential relief. The Tribunal clarified that it had not ruled on the correct classification of OPGW cables, as the issue is pending before the Supreme Court, and its decision was confined strictly to the facts and evidentiary deficiencies in the present case. Case Details Case Title: M/s. KEC International Limited Versus Commissioner of Customs (Port), Kolkata Case No.: Customs Appeal No. 75518 of 2023 Date: 20.01.2026 Counsel For Appellant: T. Viswanathan Counsel For Respondent: Samir Chitkara Click Here To Read Order Read More: Oxygen Concentrators Eligible for Pandemic-Era Customs Duty Exemption: CESTAT

CESTAT Bars Customs Duty Demand on OPGW Cables for Want of Sample Testing

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