2025 (12) TMI 830 - AAR - Customs

Radio Test Set held classifiable under CTI 9030 40 00 as telecom-specific instrument, not under residuary heading

The AAR held that the imported 'R&S(r) CMA180 Radio Test Set' is classifiable under CTI 9030 40 00 as an instrument 'specially designed for ... Classification of R&S®CMA180 Radio Test set - classifiable under CTI 9030 40 00 or not - HELD THAT:- The Explanatory Note clarifies that, beyond generic electrical meters, the heading includes a wide range of instruments used in radiocommunications/telecommunications, and it lists representative telecom test instruments (e.g., cross-talk meters, nepermeters/decibel meters, transmission level indicators, fading indicators, noise level meters, gain measuring instruments, psophometers, echo meters, distortion factor meters). It is found that the list is illustrative, not exhaustive. Therefore, consistent with the structure of 9030 40 00, instruments 'specially designed for telecommunications' qualify even if they are not named verbatim in the exemplars, provided their design/configuration is directed to telecom applications. For ascertaining the true meaning of 'specially designed' as mentioned in the tariff entry, the product has to be examined in this case in light of design, configuration, standard-specific features, and principal applications. It is also noted that R&S® CMA180 Radio test set by contrast, is built to mimic, analyse, and verify two way radio behaviour-including transmit, receive, modulation, demodulation, and audio performance. It is specifically tailored to Two-way radios (walkie-talkies, base stations, repeaters), Analog and digital communication standards (FM, AM, P25, DMR, TETRA, NXDN, etc.), Avionics radios (ILS, VOR, COM), Maritime, public safety, and professional mobile radios (PMR). Therefore, it is not a 'general' test instrument but engineered to test communication transceivers end-to-end. Though, the department has requested to classify the product under 'other' category which is for instruments used for general purpose, it is observed that the HSN Notes illustrate that modern telecom test sets are necessarily composite instruments performing generation, analysis, and measurement. It is also found that this settled legal principle that where a specific entry exists, recourse cannot be made to a residuary heading - it is a settled principle that a specific description of tariff entry prevails over a residuary description. The Supreme Court has consistently held that classification under a residuary entry should be the matter of last resort and cannot be adopted where a specific entry covers the goods (as ruled in case of Hindustan Poles Corporation v. CCE [2006 (3) TMI 2 - SUPREME COURT], CCE v. Pioneer Scientific Glass Works [2006 (4) TMI 125 - SUPREME COURT], Champdany Industries Ltd. [2009 (9) TMI 7 - SUPREME COURT]. It is found that though these cases concern different headings, the ratio of the judgements is applicable in the present case as the product fits the specific tariff text, recourse to 'other' is impermissible. A multifunctional character does not preclude classification under 9030 40 00 when all the functions converge toward telecommunication testing. I find that the applicant has produced sufficient material showing exactly these telecom-specific features. There is no contrary evidence that the R&S® CMA180 Radio Test set, as presented for import, is a bare, general-purpose analyser lacking telecom options; hence the contention of department rejected on merit. Thus, the subject goods i.e. 'R&S® CMA 180 Radio Test Set' as presented with telecom standard applications may be treated as 'specially designed for telecommunications' and merits classification under CTI 9030 40 00 of the First Schedule to the Customs Tariff Act, 1975. 1. ISSUES PRESENTED AND CONSIDERED 1.1 Whether the application for advance ruling was maintainable under the Customs Act, 1962 and the CAAR Regulations, 2021. 1.2 What is the correct 8-digit classification of 'R&S® CMA 180 Radio Test Set' under heading 9030 of the First Schedule to the Customs Tariff Act, 1975, specifically whether it is classifiable under CTI 9030 40 00 as 'other instruments and apparatus, specially designed for telecommunications' or under CTI 9030 89 90 as 'other' instruments and apparatus. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Maintainability of the application Legal framework 2.1 The Court referred to Chapter VB of the Customs Act, 1962, in particular sections 28E, 28H and 28I, and the Customs Authority for Advance Rulings Regulations, 2021, regarding: (i) who can be an 'applicant'; (ii) the permissible questions (including classification of goods); and (iii) the bar where the same question is pending or already decided by customs authorities, the Appellate Tribunal or any Court. Interpretation and reasoning 2.2 It was noted that the applicant holds a valid IEC, that the question raised concerns classification of goods under the Customs Tariff, and that there was no material showing that the same question was either pending or already decided in the applicant's case by any customs authority, the Appellate Tribunal or any Court. 2.3 The Court therefore treated the application as falling within section 28H(2)(a) and not hit by the proviso to section 28I(2). Conclusions 2.4 The application was held to be valid and maintainable, and the Court proceeded to determine the classification of the proposed imports on merits. Issue 2 - Correct classification of 'R&S® CMA 180 Radio Test Set' within heading 9030 Legal framework 2.5 The Court applied the General Rules for the Interpretation of the Import Tariff, particularly GRI 1 and GRI 6, under which classification is determined according to the terms of the headings and relevant Section or Chapter Notes, and, at subheading level, according to the terms of the subheadings and related notes. 2.6 Heading 9030 covers 'oscilloscopes, spectrum analysers and other instruments and apparatus for measuring or checking electrical quantities...; instruments and apparatus for measuring or detecting... ionising radiations.' Within this heading, the competing tariff items are: * CTI 9030 40 00 - 'Other instruments and apparatus, specially designed for telecommunications (for example, cross-talk meters, gain measuring instruments, distortion factor meters, psophometers)'; and * CTI 9030 89 90 - 'Other' (residuary entry for instruments and apparatus not covered elsewhere in heading 9030). 2.7 The Court examined the HSN Explanatory Notes to heading 90.30, which recognise that the heading includes a wide range of electrical or electronic instruments used in radiocommunications or telecommunications and list various telecom test instruments (e.g. cross-talk meters, gain measuring instruments, distortion factor meters, psophometers) as illustrative examples. 2.8 The Court also took note of the established principle that where a specific tariff entry covers the goods, classification cannot be made under a residuary 'other' entry, and residuary headings are a matter of last resort, as held in multiple Supreme Court decisions. Interpretation and reasoning Nature and functions of the product 2.9 On the factual description, the Court recorded that the R&S® CMA 180 Radio Test Set is a radio communication tester for production and maintenance testing of radio transmitters, radio receivers and two-way radio communication equipment over 100 kHz to 3 GHz, based on digital signal processing and advanced computing, integrating RF generator, RF analyser, AF generator, AF analyser, and functions such as modulation/demodulation, audio/baseband testing, arbitrary waveform generation, and measurements of adjacent channel leakage, harmonic distortion, signal-to-noise ratio and other telecom parameters. 2.10 It was further noted that the equipment is used for testing analog and digital radios, land mobile radios, avionics radios and other wireless communication systems, and is practically deployed with defence, aviation, telecom and similar users for communication-system testing. Scope of 'specially designed for telecommunications' 2.11 The Court observed that heading 9030 already covers instruments used in radio-communications and telecommunications. At the 8-digit level, CTI 9030 40 00 narrows this to 'other instruments and apparatus, specially designed for telecommunications', with certain telecom test devices named by way of example. The HSN Notes make clear that this list is illustrative, not exhaustive. 2.12 The Court reasoned that, in the absence of any contrary Section or Chapter Note, the phrase 'specially designed for telecommunications' must be applied by examining the instrument's design, configuration, standard-specific features and principal application, rather than requiring that the instrument be exclusively and only capable of telecom use. 2.13 The Court accepted the applicant's contention, supported by sectoral definitions and literature, that 'telecommunications' encompasses transmission, emission or reception of messages or signals by radio as well as by wire or other electromagnetic systems, and that radio-based communication and its testing fall within telecommunications. Assessment of whether the product is 'specially designed for telecommunications' 2.14 The Court contrasted generic RF measuring instruments with the R&S® CMA 180, and found that the latter is specifically engineered to act as a communication partner for two-way radios and similar communication equipment, with integrated functions for transmit/receive testing, modulation/demodulation, audio performance evaluation, and automated, standard-based measurements for various analog and digital land-mobile and avionics radio standards. 2.15 On that basis, the Court held that the instrument is not a general-purpose RF instrument but is designed and configured as a comprehensive test set for radio communication systems, and thus falls within the scope of 'specially designed for telecommunications' in CTI 9030 40 00, even though it performs multiple functions (signal generation, analysis and measurement) and may, incidentally, be employable in other RF contexts. 2.16 The departmental argument that multifunctionality and the presence of signal-generation and signal-analysis features render the instrument of a general-purpose nature, suitable only for classification under the residual entry 9030 89 90, was rejected. The Court held that in modern telecom test platforms, composite capabilities (generation, analysis, measurement) are inherent, and multifunctionality does not by itself disqualify an instrument from being 'specially designed for telecommunications' where all such functions converge toward telecom testing. Specific versus residuary entry; effect of past classification 2.17 The Court applied the settled principle that a specific tariff description prevails over a residuary 'other' entry and that classification under a residuary entry is permissible only when no specific entry reasonably covers the goods. Since CTI 9030 40 00 specifically covers instruments and apparatus specially designed for telecommunications and the impugned goods fit this description, recourse to CTI 9030 89 90 as a residual entry was held to be legally impermissible. 2.18 The departmental reliance on the applicant's past self-classification of the same goods under CTI 9030 89 90 was also rejected. The Court held that classification must be determined on the basis of the statutory text and the technical characteristics of the goods, and that past self-assessment does not operate as estoppel in taxation matters. Conclusions 2.19 The Court concluded that the R&S® CMA 180 Radio Test Set, as presented for import with telecom-standard applications, is 'specially designed for telecommunications' within the meaning of CTI 9030 40 00. 2.20 Accordingly, the product was held classifiable under CTI 9030 40 00 of the First Schedule to the Customs Tariff Act, 1975, and not under the residuary CTI 9030 89 90. The alternative question on classification in case of a negative answer under CTI 9030 40 00 did not survive.