TaxTMI 
TaxTMI 
2019 (11) TMI 451
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....hority. Consequently, the Respondents paid duty under protest and filed appeals before the learned Commissioner (Appeals), challenging the assessment order passed by the Adjudicating authority. The learned Commissioner (Appeals) allowed the appeals filed by the Respondents and remanded the matter to the Adjudicating authority for re-assessing the goods under CTH 85177090 of CTA,1975 and to consider the refund of duty paid under protest by the respondent. Hence, the present appeals are filed by the Revenue. 3. The learned Special Counsel Shri K.M. Mondal for the Revenue has submitted that in the impugned order, the learned Commissioner (Appeals) has wrongly held that since the antena imported by the Respondent is specifically designed for use with base station and it is an essential and integral part of the base station, so as to make the base station completely functional unit, its classification will be as part of the base station under chapter sub heading No.85177090. The learned Commissioner (Appeals) has also erred in holding that since the antenna is suitable for use solely or principally with base station, it shall be classifiable as a part of base station in accordance wi....
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.... requires. By application of these rules as per the Board's instructions, the antenna used at base Trans-receiver station/Node B/C Node, being a wireless communication net work merits classification under CTH 85176290. 6. Responding to the argument of the Respondent that antenna for base station is passive element which cannot function on its own, hence, classifiable under Heading 85170960 as a part to base station in view of the classification of the same adopted by the Customs in other countries Viz., China, Vietnam, Singapore, US and by the HS Committee 62nd Session, the learned Special Counsel has submitted that Revenue is concerned with the Customs Tariff of India for classification of the goods, and as per the Customs Tariff of India, the classification of the goods has to be determined by application of General Rules for interpretation of import tariff and its relevant section, notes, and chapter notes. Revenue need not be guided by the import tariff of other countries. He has contended that as far as classification decision of base station antenna of H.S. committee is concerned, it may be a good guide but it is certainly not binding on the Revenue unless it is ratified b....
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....Tariff Act as classification is not depending on functionality or its use, but the principles prescribed under relevant section/chapter note. Referring to Section note 2(a) of Section XVI, he has submitted that it clearly prescribes that parts which are goods ought to be classified in their respective headings. Further it do not, at any stage, indicate that these parts should be capable of functioning on their own. Drawing analogy to the goods viz. speakers, head-phones, ear-phones, etc which are not capable of functioning on their own, and are often designed to be a part of other equipments like music system, mobile phones etc. but are still classifiable under their respective headings. Therefore, in similar manner, the antenna is also a specific machine classifiable under different heading as goods and as parts. He has submitted that the Customs Tariff recognizes the antenna as separate goods which is accordingly classifiable under Chapter Heading 852910 of Customs Tariff Act. However, as per Section note 2(b), antenna which is suitable for goods of headings 8517 are classifiable under Chapter 8517 and not under Chapter Heading 8529. Irrespective of the same, antennas are recogni....
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....s in their own rights. 14. Distinguishing the judgment of Hon'ble Supreme Court in Hutchison Essar South Ltd case (supra), the learned A.R. has submitted that Hon'ble Supreme Court based its findings on the fact that the antennas had been imported along with base station. Referring to Para 9 of the judgment, the learned A.R. has submitted that the said judgment should be read to the effect that the benefit of exemption notification would be available to antenna when it is imported along with BTS. In the present case, however, the antenna had been imported independently. Referring to the judgment of Tribunal in the case of Modern Communication & Broadcasting Systems P. Ltd Vs CC Kandla - 2009 (245) ELT 199 (Tri-Ahmd), wherein it was held that the antenna system performs both reception and transmission, he has submitted that if it be so, the antenna is an independent machine and thus classifiable as independent goods and not as parts. 15. Further, he has submitted that the findings of the learned Commissioner (Appeals) on the issue of availability of exemption under various notification ought to be struck down since it is beyond the scope of assessment of Bill of Entry as t....
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....l that the Revenue was deprived of an opportunity of personal hearing is devoid of merit. Further, he has submitted that as per Section 128A of the Customs Act, 1962, it is mandatory on the part of the Commissioner(Appeals) to provide an opportunity of hearing to the Appellant ; if he so desires. Thus it is only the Appellant (now the Respondent) who has the statutory right to be heard and there is no statutory right conferred on the respondent before the Ld. Commissioner (Appeals), that is the department, to be heard. As per as Section 1(A) of Section 128 is concerned, the same has been introduced in the year 2004, which allows the Commissioner (Appeals) to adjourn the hearing for reasons to be recorded in writing, subject to a maximum of three adjournments. It is amply clear that adjournment cannot be extended to the party concerned as a matter of routine, unless sufficient cause has been shown in support of the adjournment. Further, he has submitted that the number of 3 adjournments prescribed the upper limit as laid down by the Hon'ble Gujarat High Court in the case of Ramesh Vasantbhai Bhojani Vs UOI - 2017 (357) ELT 63 (Guj.). He has further submitted that the plea of violati....
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.... It is his contention that therefore, it would follow from the above that the tariff itself recognizes that antenna are not, in themselves, complete apparatus for transmission or reception of radio telephony, but only parts of apparatus for transmission and reception of radio telephony. 20. He has further submitted that in the year 2007, consistent with the changes made by World Customs Organisation to the HSN, whereby the apparatus for transmission and reception of radio telephony were shifted from Heading 85.24 and 85.27 and brought under Heading 85.17; consequent to which parts of such apparatus would stand shifted from heading 85.29 to sub-heading 8517.70. 21. Consistent with the said changes in the HSN, the CTA in India also got amended w.e.f. 01.01.2007 and consequently, the transmission and reception apparatus for radio telephony were removed from Heading 85.24 and 85.27 and brought under Heading 85.17. Similarly, parts of transmission and reception for radio telephony covered under Heading 85.29 prior to 2007 shifted to heading 8517.70 which covers parts. The net effect of the aforesaid changes was that antenna for transmission and reception apparatus which prior to 0....
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....r radio telephony only under tariff 85177090. 24. The learned Advocate has further submitted that Antennas for base station are globally classified as parts under heading 8517.7090. In support, he has referred to the classification of China Customs, Vietnam Customs Tariff, Singapore Customs Tariff and USA Customs Ruling No.36/2009. Further, he has submitted that the decision of Counsel European Commission, consequent upon revision of HSN in 2007, also classified aerials for radio telephony apparatus under Heading 8517.70. 25. Assailing the stand of the Department that in view of Note 2(a) of Section XVI, Antenna is classifiable under Heading 8517.6290, the learned Advocate has submitted that Note 2(a) provides that parts which are goods included in any of the headings of Chapter 84 or 85 are in all cases to be classified in the respective headings and note 2(b) provides that other parts, if suitable for use solely or principally with particular kind of machine to be classified with the machine of that kind. The said note 2(a) cannot be applied for the reason that Antenna are neither specified under Heading 8517.6290 nor do they answer the description "machine" for the recepti....
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....tic waves by application of an alternating current. The Antenna is a mere piece of metal conductor and when an alternating current is applied to the antenna, a disturbance is created in the electro-magnetic field, as a result of which electro-magnetic waves are radiated. The antenna is used merely to generate the electro-magnetic waves, which is the medium through which the data is transmitted. Referring to HSN Explanatory Note under Heading 85.17, the learned Advocate submitted that it draws a clear distinction between data such as speech or other sounds and images (referred as signals) and the means of medium used for transmission of data/signals. From the said explanation, it is evident that data (signals) are transmitted between two points through a medium. This medium in the case of a wired network, is a wire and in the case of wireless network, the mediums are the electro-magnetic waves. What is covered under S.H. 8617.62, are the machines for reception, conversion and transmission or re-generation of data and not machines which produce the medium through which the data is transmitted. The role of Antenna in telecommunication network is limited to generate electro-magnetic wa....
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....ion No.69/2004-Cus. Issued in respect of Education Cess was rescinded by Notification No.9/2018-Cus, dt.02.02.2018 consequent upon replacement of education cess by social welfare surcharge; the successor Notification No.11/2018 dt.2.2.2018 at Sr.No.31 mentions that aerials or antennas of a kind to be used as apparatus for radio telephony and radio telegraphy falling under Tariff Item 85177090. Thus, the Government's statutory notification continues to consider the Antennas as "parts" falling under sub heading 85177090. The said notification was issued subsequent to Board's instructions No.1/2018-Cus, dt.15.01.2018. 31. Heard both sides at length, perused the written submissions filed on conclusion of hearing and the records of the case. The issue for determination in both the appeals, filed by the Revenue, centres around the classification of 'Antenna for base station imported by the Respondent used in mobile telecommunication network. 32. The Revenue deviating from the past assessment of classifying the said antenna for base station under CSH 85177090, classified it under CSH 85176290 of Customs Tariff Act, 1975. The Respondent to expedite the clearance of the imported goods....
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....e Antenna is an essential device of a wireless communication system. The information can travel only in the electromagnetic wave form. The Antenna radiates the information in the form of an electromagnetic wave in an efficient and desired manner to the destination, where the information is picked up by the receive antenna and passed on to the receiver via transmission line. The signal is demodulated and the original message is then recovered at the receiver. Thus, wireless communication gets established. The Antenna can generate electromagnetic waves from currents and voltages and which can convert electromagnetic waves to currents and voltages and which can convert electromagnetic waves to currents and voltages when these waves impinge on it. In technical language, the Antenna is a device that transform time varying electrical signals into electromagnetic waves at transmit antenna and electromagnetic waves induces voltage/current at receive antenna. Further, the Antenna for wireless communication works at transmit antenna as well as receive antenna". 9. Based on the instructions issued by Board dt.15.01.2018, the functions and technology defined solely and also in view of....
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....earing the assessee after due notice to the department. In the present case, nothing has been brought on record to show that the Commissioner (Appeals) has deviated from the normal practice or rejected the request of adjournment of the department and proceeded by disposing the Appeal after hearing the Appellant in a biased manner without putting the department on notice about filing of the Appeal. Thus, in these circumstance, in our view, there is no violation of principles of natural justice in disposing the appeal by the learned Commissioner (appeals) by not adjourning the hearing suo motto for three times without any request for adjournment from the department in this regard. 36. The second preliminary objection raised by the Revenue is that since the duty has been paid under protest, the assessment is not final, therefore appeal against the assessment Order cannot lie before the Commissioner (Appeals). We do not find merit in the said contention of the Revenue in as much as that payment of the disputed amount before or after assessment of the respective bill of entry either under protest or otherwise will not make the assessment provisional/incomplete and not an appealable O....
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....ine systems or for digital line systems: u Free - 8517 50 10 -- PLCC equipment u Free - 8517 50 20 -- Voice frequency telegraphy u Free - 8517 50 30 -- Modems (modulators-demodulators) u Free - 8517 50 40 -- High bit rate digital subscriber line system (HDSL) u Free - 8517 50 50 -- Digital loop carrier system (DLC) u Free - 8517 50 60 -- Synchronous digital hierarchy system (SDH) u Free - 8517 50 70 -- Multiplexer, statistical multiplexer u Free - --- Other: u Free - 8517 50 91 ---- ISDN terminals u Free - 8517 50 92 ---- ISDN terminal adapters u Free - 8517 50 93 ---- Routers u Free - 8517 50 94 ---- X25 pads u Free - 8517 50 99 ---- Other u Free - 8517 80 - Other apparatus: u Free - 8517 80 10 --- Attachments for telephones. u Free - 8517 80 20 --- Subscriber end equipment u Free - 8517 80 30 --- Set top boxes for gaining access to the Internet u Free - 8....
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....Radio-broadcast receivers capable of operating without an external source of power, including apparatus capable of receiving also radio-telephony or radio-telegraphy: 8527 12 00 -- Pocket-size radio cassette-players u 12.5% - 8527 13 00 -- Other apparatus combined with sound recording or reproducing apparatus u 12.5% - 8527 19 00 -- Other u 12.5% - - Radio-broadcast receivers not capable of operating without an external source of power, of a kind used in motor vehicles, including apparatus capable of receiving also radio-telephony or radio-telegraphy: u 12.5% - 8527 21 00 -- Combined with sound recording or reproducing apparatus u 12.5% - 8527 29 00 -- Other u 12.5% - - Other radio-broadcast receivers, including apparatus capable of receiving also radio-telephony or radio-telegraphy: u 12.5% - 8527 31 00 -- Combined with sound recording or reproducing apparatus u 12.5% - 8527 32 00 -- Not combined with sound recording or reproducing apparatus but combined with a clock u 12.5% - ....
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....11 10 --- Push button type u Free - 8517 11 90 --- Other u Free - 8517 12 -- Telephones for cellular networks or for other wireless networks: u Free - 8517 12 10 --- Push button type u Free - 8517 12 90 --- Other u Free - 8517 18 - Other: u Free - 8517 18 10 --- Push button type u Free - 8517 18 90 --- Other u Free - - Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network): u Free - 8517 61 00 -- Base stations u Free - 8517 62 -- Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus: u Free - 8517 62 10 --- PLCC equipment u Free - 8517 62 20 --- Voice frequency telegraphy u Free - 8517 62 30 --- Modems (modulators-demodulators) u Free - 8517 62 40 --- High bit rate digital subscriber line system (HDSL) ....
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....voice, images, or other data including apparatus for communication in wired or wireless network (such as local or wide area network); and the third single dash(-), for "parts". The 'base station' is classified under the second category under CSH 85176100, to which neither side disputes. 42. Revenue, referring to the definition of 'machine' prescribed under Note 5 of Section XVI classified the 'antenna' for base station under second category, as 'machines' for reception, conversion and transmission or regeneration of voice, images or other data including switching and routing apparatus. The Revenue's argument is based on the clarification issued by the Board on 01.01.2018 that Antenna is an essential device of a wireless communication system; the information can travel only in the electro-magnetic wave form. The antenna radiates the information in the form of electro-magnetic wave in an efficient and desired manner to the base station, where the information is picked up by the receiving antenna and passed on to the receiver via transmission line. The signal is de-modulated and the original message is then recovered at the receiver. Thus, the wireless communication gets establishe....
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....he headings of Chapter 84 or 85." The meaning of 'machine' has to be understood in the context of Heading 8517. This is clear when we read the scope of Heading 8517 as explained under HSN which reads as follows:- "This heading covers apparatus for the transmission or reception of speech or other sounds, images or other data between two points by variation of an electric current or optical wave flowing in a wired network or by electro-magnetic waves in a wireless network. The signal may be analogue or digital. The networks, which may be interconnected, include telephony, telegraphy, radio-telephony, radio-telegraphy, local and wide area networks." 45. In the present case, the manufacturer of Antenna as well as the chartered engineer's certificate, in clear terms clarified that the Antenna in question transmits and receives only signals and not performing any other function like conversion or regeneration of voice, images or other data signals and switching/routing of signals. Therefore, the Antenna stand alone cannot be considered as a 'machine', attracting classification under Heading 8517.62. Consequently, the observation of the Department in the circular dt.15.01.2....
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....3, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8487 or 8548." 47. A simple analysis of Clause (a) of the above Note reveals that parts which are 'goods' required to be classified in the respective headings; in the present case, 'Antenna' being a part of the BTS, hence applying the said Rule, classifiable under Chapter Heading 8517. Revenue's interpretation of the said clause(a) in the present case is that in the event if the goods are not falling under any of the sub heading of heading 8517, then only it will be classifiable as 'parts', is incorrect. Clause 'b' of the said Note 2 indicates that "other parts", by implication which are not goods, if suitable for use solely or principally with a particular kind of machine of the same heading are to be classified with the machines of that kind or the headings mentioned under the said clause 'b' as appropriate. Further, it is mentioned that parts which are equally suitable for use principally with the goods of heading 85.17 and headings of 8517 and 8525 to 8528 are to be classified as headings of 8517. Therefore, Antennas since parts of BTS, as held by Hon'ble Supreme Court in Hutchison Essar South Ltd.'s case ....
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....y of various exemption notifications issued in support of the classification of the said goods, becomes more of academic, hence not analysed. Consequently, the Revenue's Appeals are being devoid of merit accordingly rejected. (Order pronounced in the open court on 06.11.2019) ============= Document 1 Exhibit- 'A' Shipper/Exporter ACE TECHNOLOGIES CORP. 248 SL,451-4,NONHYEON-DONG,NAMDONG-GU, INCHEON KWANGYUK-SHI,KOREA INVOICE ADDRESS Reliance Jio Infocomm Limited. Reliance Corporate Pork. 8B 1st Floor 8. TTC Industrial Area. Thane Belapur Road, Shareoli, Navi Mumbai-400701. MAHARASHTRA, INDIA, DELIVERY & NOTIFY ADDRESS Reliance Jio Infocomm Limited. C/o Reliance Industries Ltd, D-1 Kurkumbh MIDC Industrial Area. Pune Solapur Highway, Kurkuman, Taluka Daund Dist. Pune 413802 Maharashtra Contact Person: Mr. Ramesh Krishnan Tel +812244775414/+917738210296 Port of Loading HANOI, VIỆT NAM Final Destination MUMBAI, INDIA INVOICE No.8 Date of invoice VIBS AR17004-3 Terms of payment 150 Days After Delivery Terms of delivery May 26, 2017 EXIN Ha Nam, Vietnam Remarks ....