TaxTMI 
TaxTMI 
2010 (9) TMI 739
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....hich are used in the assembly of SMPS, which in turn are supplied to M/s. BSNL along with IFWT. 2. The appellants declared the impugned VRLA batteries to be parts of IFWT, claimed assessment under Customs Tariff Heading 8529 90 90 and exemption from duty under Customs Notification No. 21/05 and Central Excise Notification No. 6/06. 3.The impugned goods were assessed and cleared under the Risk Management System on the basis of declaration by appellant-importers. The present proceedings have been initiated as a result of post-clearance audit by customs authorities. 4. The customs authorities have classified the impugned VRLA batteries under CTH 8507 20 00 and have denied the duty exemption holding that the impugned batteries are not part of IFWT. 5. Ld. Advocate, concedes that the appellants are agreeable for classification of the VRLA batteries under CTH 8507 20 00 instead of their initial claim for classification under the CTH 8529 90 90 but argues that the appellants are eligible for duty exemption in respect of the impugned batteries. His argument centers on the proposition that the exemption notification does not refer to any tariff heading and even though the....
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....s that from this decision it can be concluded that the batteries are not parts of telephones, otherwise the part of the batteries would have been allowed exemption on the basis of the logic that part of a part is a part of the whole. He also states that in the case of Teracom (supra), batteries were listed among various other goods and that the issue as to whether the batteries were part of the telephones was not in question nor the Tribunal has decided this issue therein. It was merely decided in the Teracom case that CDMA WLL phones are cellular phones which was the issue for consideration in that case. He further states that in the following cases, it has been held that battery cells are articles by themselves and are not parts of any machines :- (i) M/s. Webel Telecommunication Industries v. CC, Calcutta - 1995 (76) E.L.T. 163 (ii) M/s. Electronic and Engineering Co. v. CC, Bombay - 1997 (92) E.L.T. 382 (iii) CC, Madras v. Kodi Medical Electronics Pvt. Ltd. - 1998 (98) E.L.T. 535 (iv) M/s. Titan Watches Ltd. v. CC, Coimbatore - 1999 (108) E.L.T. 643. 8. After hearing both sides and perusal of case....
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....attery used in the SMPS, thereby ensuring continuous functioning of the telephone. It appears that functioning of the SMPS is more akin to the UPS which are nowadays used along with the computers, which provide continuous power at times of power cuts. The question to be decided in this case is whether VRLA batteries which supply power to IFW telephones at the time of power cuts can be considered as parts of IFW telephones as argued by the ld. Advocate. 11. We reproduce below the relevant extract of the exemption notification which is the subject matter of this appeal. Notification No. 21/05-Cus dated 1-3-2005 reads as under. - "In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts parts, components and accessories of mobile handsets including cellular phones, from the whole of the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and from the whole of the additional duty leviable thereon under sub-section (1) of section 3 of the said Customs Tariff Act subject....
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....bunal's decision in the case of Twenty First Century (supra), also favours such an interpretation as in the said case, it was held that the parts and components of the batteries cannot be considered as parts, components and accessories of mobile phones. By implication, it rules out the proposition that the batteries are parts of mobile phones. The ld. SDR is right in referring to the principle that part of a part is a part of the whole in this regard. If batteries were parts of the telephones, then the Tribunal would have extended the benefit to the parts of the batteries treating the same as part of the telephones. However, the cited decision is to the contrary holding the view that parts of the batteries cannot be extended the exemption benefit as applicable to parts of telephone. Aforecited decision of the Hon'ble Supreme Court in the case of Twenty First Century (supra) has also dismissed the civil appeal against the decision of the Tribunal. On the other hand, the decision of the Tribunal in the case of Teracom (supra), cannot be taken as a precedent to decide the issue as to whether the batteries are part of the telephones since that was not an issue for consideration before ....
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....he absence of electric supply from the mains. 18. The ld. Advocate has also cited the decision of the Tribunal in the case of Jayshree Industries (supra). However, the said decision was rendered in the case of dry cells fitted inside quartz clocks and time pieces, holding the same to be component of the final product but not an accessory therefor. As has been noted earlier, we are dealing in this case with lead-acid batteries and not dry cell batteries. The decision takes into account that the dry cell batteries are fitted within the gadget, and hence considered the same to be an essential component and, therefore, is not relevant to the present case where the lead-acid batteries are separately housed in the SMPS apart from not being dry battery cells. This decision also deals with the question as to what can be considered to be an accessory. The Tribunal has ruled that battery is not an item, which goes as an attachment for improving the efficiency or for performing a secondary or subordinate function. We entirely agree that a lead-acid battery which merely provides power in the absence of power from the mains does not improve the efficiency of the telephone nor performs a s....