January 20, 2026 : The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has dismissed the Revenue’s appeal and allowed the importer’s cross appeal in a long-running dispute over the classification of Optical Ground Wire (OPGW) fibre optic cables, holding that customs duty demands cannot survive without fresh sample testing or proof of suppression or misdeclaration. The Tribunal ruled that where classification disputes hinge on interpretation of tariff entries and the issue remains pending before the Supreme Court, invocation of the extended period of limitation is legally impermissible.
The Bench comprising Judicial Member R. Muralidhar and Technical Member Rajeev Tandon noted that the classification of OPGW cables has been under litigation for nearly two decades and continues to remain sub judice before the Supreme Court, which has stayed the operation of the Larger Bench decision in Commissioner of Customs (Import), Mumbai v. Vodafone Essar Gujarat Ltd. In such circumstances, the Tribunal held that the Revenue could not allege suppression of facts merely because it held a different view on classification.
The dispute arose from imports of OPGW fibre optic cables by M/s KEC International Limited 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 issued a show cause notice in June 2021 alleging that the goods were classifiable under CTH 9001 00 00 and proposed recovery of differential customs duty amounting to over ₹2.38 crore, along with interest and penalties.
The adjudicating authority partly accepted the importer’s submissions and dropped demands of about ₹2.23 crore relating to the extended period, holding that there was no suppression of facts. However, it confirmed a smaller demand of ₹14.85 lakh for the normal period. Aggrieved by different parts of the order, both the Revenue and the importer approached the Tribunal.
Before the Tribunal, the Revenue relied heavily on the Larger Bench ruling in Vodafone Essar to argue that OPGW cables were classifiable under CTH 9001 00 00 and contended that the importer had knowingly misdeclared the classification. The Revenue also sought revival of penalty proceedings against company officials, even though no separate appeals had been filed against them.
The importer countered that the dispute was purely one of classification involving interpretation of tariff entries, with no element of concealment. It pointed out that identical goods imported earlier had been tested by the Electronics Regional Test Laboratory in 2014, which confirmed that each fibre core had an individual protective coating. On the basis of this test report, Customs had accepted classification under CTH 8544 70 90 and finalized provisional assessments. The importer further argued that for consignments imported between 2019 and 2021, the Department neither drew samples nor conducted any fresh testing, and therefore could not rely on assumptions or generic technical opinions.
After examining the record, the Tribunal reiterated that classification of OPGW cables has remained a contentious and unsettled issue, with the Supreme Court having stayed the Larger Bench ruling. In this backdrop, it upheld the adjudicating authority’s decision to drop the extended-period demand, observing that settled judicial precedent bars allegations of suppression in classification disputes involving interpretational issues.
On the importer’s appeal, the Tribunal went further and set aside even the demand confirmed for the normal period. It emphasized that Customs had failed to draw or test samples of the disputed consignments, despite clear Board Circulars requiring verification in each case. The Tribunal reaffirmed that test results of one consignment cannot be mechanically applied to other consignments and that each bill of entry constitutes a separate and independent assessment.
The Bench also noted 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 proceedings decided in favour of the importer. In the absence of any fresh evidence or testing, reopening the classification issue after several years was held to be legally unsustainable.
Accordingly, the Tribunal dismissed the Revenue’s appeal in its entirety and allowed the importer’s appeal, setting aside the confirmed demand of ₹14.85 lakh along with consequential relief as per law. 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 that its decision was confined strictly to the evidentiary gaps and limitation aspects in the present case.
Case Title: M/s. KEC International Limited v. Commissioner of Customs (Port), Kolkata
Case No.: Customs Appeal No. 75518 of 2023
Coram: R. Muralidhar (Judicial Member) and Rajeev Tandon (Technical Member)
