Wireless routers and mesh Wi-Fi systems classified under sub-heading 8517 62 90 with duty exemption

AAR Mumbai ruled that wireless routers and mesh Wi-Fi systems (Wavlink models Quantum D2G, Quantum S2K, and WL-WN529E4) are classifiable under sub-heading 8517 62 90 of the Customs Tariff Act, 1975. The devices function as routing apparatus that manage network traffic and enable multiple device connectivity. Since they satisfy the criteria for switching and routing apparatus under Chapter 8517 and are not specifically covered elsewhere, they fall under the residual heading 8517 62 90. The goods are eligible for duty exemption under Sr. No. 13N of Notification No. 24/2005-Customs.

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Issues Involved:
1. Classification of the routers under the Customs Tariff Act, 1975.
2. Eligibility for duty exemption under Notification No. 24/2005-Customs, dated 1-3-2005, as amended.

Detailed Analysis:

1. Classification of Routers:

The applicant, M/s. Ingram Micro India Pvt. Ltd., sought an advance ruling on the classification of four models of routers intended for import. The models are:
- WAVLINK HALO Base Pro X2 Dual Band 1200 Mbps Wireless Mesh Router
- WAVLINK QUANTUM D2G 1200 Mbps Dual Band Full Gigabit Wireless Router
- WAVLINK QUANTUM S2K 300 Mbps Wireless Router
- WAVLINK WL-WN529E4 4G LTE N300 Wireless Router

The applicant argued that these routers should be classified under Chapter Heading 8517 of the Customs Tariff Act, 1975, specifically under sub-heading 8517 62 90, which includes "Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus."

The applicant supported their classification with references to the Harmonized System of Nomenclature (HSN) Explanatory Notes, which state that routers are apparatus for the transmission or reception of data in a wired or wireless network. The applicant also cited various Supreme Court judgments to support the use of dictionary definitions and trade parlance for terms not defined in the statute.

The Authority for Advance Rulings (AAR) agreed with the applicant, noting that the routers meet the criteria laid out in the relevant headings, sub-headings, and HSN notes. The routers are devices that manage traffic between networks by forwarding data packets to their intended IP addresses, and they allow multiple devices to use the same internet connection. Therefore, the AAR ruled that the routers are classifiable under sub-heading 8517 62 90.

2. Eligibility for Duty Exemption:

The applicant also sought confirmation on the eligibility for duty exemption under Sr. No. 13N of Notification No. 24/2005-Customs, dated 1-3-2005, as amended. This notification exempts "Routers" falling under Heading 8517 62 90 from the whole of the duty of customs leviable thereon.

The AAR noted that the applicant had been issued Show Cause Notices (SCNs) for the period prior to 1-1-2020, proposing a different classification (Tariff Item 8517 69 30) and denying the benefit of the notification. However, the specific Tariff Item for routers (8517 69 30) was eliminated effective 1-1-2020, and the exemption for routers under Sr. No. 13N of Notification No. 24/2005-Cus. was introduced only from that date.

Given that the new legal framework came into existence from 1-1-2020, the AAR found no pending dispute under the current classification and notification benefit. Consequently, the AAR ruled that the routers are eligible for the duty exemption under Sr. No. 13N of Notification No. 24/2005-Cus., dated 1-3-2005, as amended.

Conclusion:

The Authority for Advance Rulings concluded that the routers in question are classifiable under sub-heading 8517 62 90 of the Customs Tariff Act, 1975, and are eligible for the duty exemption benefit under Sr. No. 13N of Notification No. 24/2005-Customs, dated 1-3-2005, as amended.

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