Exemption for dual mode satellite/GSM phones upheld where goods still answered the description of cellular phones.

Dual mode satellite/GSM mobile phones were held to fall within Notification No. 21/2002-Cus. because the decisive feature was their capability to function as GSM cellular phones. Their additional satellite communication capability did not exclude them from the exemption entry when they still answered the description of cellular telephones. On that construction, the customs exemption remained available and denial of the notification benefit was unsustainable.

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Issues: Whether dual mode satellite/GSM mobile phones were entitled to the benefit of Notification No. 21/2002-Cus. dated 01.03.2002 despite being capable of functioning as satellite communication equipment.

Analysis: The imported goods were found to possess cellular telephone features in addition to satellite communication capability. The decisive consideration was that the items could function as GSM mobile phones and therefore answered the description of cellular phones covered by the exemption entry. The fact that the goods also had satellite features did not justify denial of the notification benefit when they remained capable of falling within the cellular phone description in the notification.

Conclusion: The exemption under Notification No. 21/2002-Cus. dated 01.03.2002 was applicable, and the denial of the benefit was unsustainable.

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