2025 (4) TMI 194 - HC - Customs

Interpretation: 'MIMO and LTE' exemption covers only products combining both; MIMO-only access points qualify for BCD exemption

HC dismissed the appeal, holding that the phrase 'MIMO and LTE' in the exemption notification means products combining both MIMO technology and LTE ... Interpretation of the word ‘and’ appearing in the clause (iv) of Serial No. 13 of N/N. 11/2014-Customs dated 11th July, 2014 - Multiple Input/ Multiple Output (MIMO) and Long Term Evolution (LTE) Products - CESTAT has interpreted the said terms i.e., MIMO and LTE in conjunction and thereby, held that the subject goods would not be covered in the exclusion clause of the exemption notification. HELD THAT:- This issue has now been decided by a Coordinate Bench of this Court in Commissioner of Customs (Air) Chennai -VII Commissionerate, Chennai v. Ingram Micro India Pvt. Ltd. [2022 (9) TMI 594 - CESTAT NEW DELHI] where it was held that 'the phrase “MIMO and LTE Products” in Serial No. 13(iv) of the amended Notification No. 24/2005 applies solely to products combining MIMO technology and LTE standards. The exclusion clause cannot be stretched to encompass products featuring either one of the two technologies. Accordingly, the WAPs imported by the respondent, which employ MIMO technology but not the LTE standards, are entitled to the exemption from Basic Customs Duty.' In terms of the decision in Ingram Micro India Pvt. Ltd. no question of law arises in this matter for determination. Appeal dismissed. ISSUES PRESENTED and CONSIDEREDThe core legal question considered in this judgment was the interpretation of the word 'and' in the clause (iv) of Serial No. 13 of Notification No. 11/2014-Customs dated 11th July, 2014, specifically in the phrase 'Multiple Input/Multiple Output (MIMO) and Long Term Evolution (LTE) Products'. The issue was whether this phrase should be interpreted to include products that utilize either MIMO technology, LTE standards, or both, or only those products that incorporate both MIMO technology and LTE standards.ISSUE-WISE DETAILED ANALYSISRelevant legal framework and precedents: The legal framework involved the interpretation of customs notifications, particularly Notification No. 11/2014-Customs. The precedent set by a Coordinate Bench in the case of Commissioner of Customs (Air) Chennai -VII Commissionerate, Chennai v. Ingram Micro India Pvt. Ltd. was crucial in this context.Court's interpretation and reasoning: The Court examined the use of conjunctions like 'and' and 'or' within the notification. It emphasized that the word 'and' is typically conjunctive, meaning it combines the elements it connects, unless its use results in ambiguity or absurdity. The Court found no such ambiguity or absurdity in this case.Key evidence and findings: The Court noted that the phrase 'MIMO and LTE Products' lacked a comma or the word 'products' after 'MIMO', suggesting that the phrase referred to products that incorporate both MIMO technology and LTE standards. It also considered the amended notifications from 2021, which clarified the phrase by listing '(i) MIMO products; (ii) LTE products' separately, indicating that the original phrase was meant to be conjunctive.Application of law to facts: The Court applied the principles of statutory interpretation, emphasizing the plain reading of the language used in the notification. It concluded that the phrase 'MIMO and LTE Products' should be interpreted to mean products that utilize both MIMO technology and LTE standards, rather than products that use either one or the other.Treatment of competing arguments: The Revenue argued that the phrase should include products using either MIMO or LTE or both. However, the Court rejected this argument, stating that if such an intention existed, the word 'or' would have been used instead of 'and'. The Court found the Revenue's interpretation inconsistent with the language and structure of the notification.Conclusions: The Court concluded that the phrase 'MIMO and LTE Products' refers exclusively to products that incorporate both MIMO technology and LTE standards. As a result, products that only use MIMO technology, like the WAPs imported by the respondent, are entitled to an exemption from Basic Customs Duty.SIGNIFICANT HOLDINGSThe Court held that the phrase 'MIMO and LTE Products' in Serial No. 13(iv) of the amended Notification No. 24/2005 applies solely to products combining MIMO technology and LTE standards. It cannot be extended to include products featuring only one of the two technologies. This interpretation was supported by the absence of the word 'or' and the presence of 'and', which indicated a conjunctive reading.Core principles established: The judgment reinforced the principle that statutory language should be interpreted based on its plain meaning unless such interpretation leads to ambiguity or absurdity. The use of conjunctions in legal texts should be understood in their ordinary grammatical sense unless context dictates otherwise.Final determinations on each issue: The Court determined that the interpretation of the phrase 'MIMO and LTE Products' should be conjunctive, meaning that only products incorporating both technologies qualify under this category. Consequently, the appeal was dismissed, and the respondent's products were entitled to the customs duty exemption.