The commonest use of "to peel" is probably, "to peel a banana". You usually do not peel all of the banana until you eat the final part.
'Cable sheath is peeled off' Hmmm. You need a determiner and a change of tense: 'The Cable sheath has [been] peeled off.'
Off is not particularly precise: it could mean, (i) completely, i.e. there is no outer sheath anywhere (ii) from a small area that you are indicating (iii) as far as is required - if you are repairing the cable.