2007 (2) TMI 369

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....phones to Bharat Sanchar Nigam Limited (BSNL)/Mahanagar Telephone Nigam Limited (MTNL). Under the contract the appellants were to supply phones and also to render maintenance service for a period of five years which services include providing infrastructure compatibility wherever the phone is used. They were also required to provide the service of facility for upgradation of the phone's functions from 2g network to 3g network. They imported from M/s. L.G. Electronics, cellular phones, both IFWT and FWT. The phones were operated under the CDMA Technology. For imparting additional functions to the phones and for maintenance thereof, in the manner desired by BSNL/MTNL and in accordance with the terms and conditions of the contract for supply, ....

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.....L.T. 370 (T)] accepted the contention of the importers that the phones were cellular telephones as they work on cellular technology and also held that the CD-ROM was software, and therefore an accessory, and the value of the accessory to complete telephone cannot be added for the purpose of levy of duty at the rates applicable to the main telephone instrument. 2. The Tribunal's order was contested in appeal by the Revenue before the Apex Court which vide its order dated 13-12-2005 in a batch of Civil Appeals, including Civil Appeal No. 7939 of 2004 where the present appellants was the respondent, inter alia held that the model LSP-340 (the model imported by the appellants herein) was covered by the phrase "cellular telephone" and e....

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.... wherein he has noted that : ".... Certain distinguishing features with regard to the operating network, speed of data transfer, absence of SMS and MMS etc., have been pointed in support of the claim that the import is different from the items imported by Reliance and Tata, prices for which have been relied upon in the show cause notices. I observe in this context that while the subject telephone has in-built software for supporting voice, the software for data transfer is also imported along with the telephone in a detached way, since this software for data transfer has to be different for different circles so as to make it compatible with the CDMA equipment of BSNL, the service provider who uses different networks like those of Lucent,....