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of <h1>Telematics Control Unit classified under CTH 8517 62 90 eligible for 0% customs duty under Notification 69/2011</h1> <h3>IN RE : DENSO HARYANA PVT. LTD.</h3> IN RE : DENSO HARYANA PVT. LTD. - 2024 (389) E.L.T. 517 (A. A. R. - Cus. - Del.) 1. ISSUES PRESENTED and CONSIDEREDThe legal judgment revolves around two core issues:Whether the classification of the 'Telematics Control Unit (TCU)' under the Customs Tariff Heading 8517 62 90 is correct.Whether the Applicant is eligible to avail a concessional rate of Basic Customs Duty (BCD) under Sl. No. 666 of Notification No. 69/2011-Customs, dated 29-7-2011.2. ISSUE-WISE DETAILED ANALYSISIssue 1: Classification of the Subject GoodRelevant Legal Framework and Precedents: The classification of goods under the Customs Tariff is governed by the General Rules of Interpretation (GRI) and the Harmonized System of Nomenclature (HSN). The GRI and HSN provide the necessary framework and guidelines for classifying goods under specific headings.Court's Interpretation and Reasoning: The court considered the principal function of the TCU, which is to transmit, convert, and receive data in a wireless network. The judgment emphasized that the TCU, with its embedded Network Access Device (NAD) and E-sim, is capable of performing these functions at the time of import.Key Evidence and Findings: The TCU's ability to transmit and receive data using electromagnetic waves in a wireless network was a critical factor. The presence of IMEI and ICCID numbers on the TCU further supported its classification under CTH 8517.Application of Law to Facts: The court applied GRI Rule 1, which requires classification based on the terms of the headings and relevant section or chapter notes. The TCU's functions aligned with the description under CTH 8517, specifically under sub-heading 8517 62 90.Treatment of Competing Arguments: The judgment addressed the potential classification under Chapter 87, which covers parts and accessories of motor vehicles. However, it was concluded that the TCU, being an electrical equipment, is excluded from this chapter as per Section Note 2(f) of Section XVII.Conclusions: The TCU is correctly classifiable under CTH 8517 62 90, as it satisfies the criteria for machines used for transmission, conversion, and reception of data.Issue 2: Applicability of Notification No. 69/2011-CustomsRelevant Legal Framework and Precedents: Notification No. 69/2011-Customs provides an exemption from BCD for goods falling under CTH 8517 when imported from Japan, subject to compliance with the Customs Tariff (Determination of Origin of Goods under the Comprehensive Economic Partnership Agreement between India and Japan) Rules, 2011.Court's Interpretation and Reasoning: The court interpreted the notification to mean that the TCU, being classifiable under CTH 8517 and originating from Japan, is eligible for the concessional duty benefit.Key Evidence and Findings: The classification of the TCU under CTH 8517 and its origin from Japan were pivotal in determining eligibility for the duty exemption.Application of Law to Facts: The court applied the conditions of the notification, confirming that the TCU meets the criteria for exemption from BCD.Treatment of Competing Arguments: The judgment did not encounter significant competing arguments regarding the applicability of the notification, as the conditions were clearly met.Conclusions: The Applicant is eligible to avail the concessional rate of BCD at 0% as per the notification, provided the goods are imported from Japan and meet the origin criteria.3. SIGNIFICANT HOLDINGSPreserve Verbatim Quotes of Crucial Legal Reasoning: 'The subject goods i.e. 'Telematics Control Unit (TCU)' is rightly classifiable under Customs Tariff Heading (CTH) 8517 and more specifically under 8517 62 90.'Core Principles Established:The classification of goods should be determined based on the principal function and the specific description provided in the tariff headings.Exclusions provided in section notes must be considered, especially when determining if a product falls under a specific chapter.Eligibility for duty exemptions is contingent on compliance with the conditions set forth in relevant notifications and agreements.Final Determinations on Each Issue:The TCU is correctly classified under CTH 8517 62 90.The Applicant is eligible for a concessional rate of BCD at 0% under Notification No. 69/2011-Customs, subject to compliance with origin criteria.
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