TaxTMI 
TaxTMI 
2022 (6) TMI 1051
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.... entry changing the classification to CTH 8517 62 90; the appellants preferred an appeal before the Commissioner (Appeals); Commissioner (Appeals) vide impugned orders has upheld the contention of the appellants and allowed their appeals. Learned Commissioner (Appeals) has held as follows:- (a) Information available from the product catalogue published by the manufacturer supplier suggests that the impugned goods are parts of Ciena's 5430 Packet Optical Switch (Platform) and therefore shall be classifiable as parts under CTH 85177010 being PCB. (b) In terms of Notification 57/2017 all goods falling under CTH 8517 are exempt from BCD unconditionally. Revenue preferred these appeals against the impugned orders. 3. Shri Ramesh Kumar, Authorized Representative appearing for Revenue reiterates the grounds of appeals and submits that the impugned goods are various telecommunication devices used in optical communication by transmitting digital signal/ messages in one or both directions over a single transmission path on optical fibers; firstly, wavelengths of various signals are changed and various such signals having different wavelengths are mixed and loade....
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....remaining wavelengths through the DWDM, and add the same wavelength but with different data content (from the add fiber) in the same direction. 5. Explaining on the basis of explanatory notes for HSN and relevant tariff headings, learned Authorized Representative submits that part "E" of the HSN heading 8517 explains that many automatic switch boards and exchanges incorporate analogue to digital convertors, digital to analogue convertors, data compression/ de-compression devices (CODECS), modems, multiplexors, automatic data processing machines and other devices that permit the simultaneous transmission of both analogue and digital signals over the network, which enables the integrated transmission of speech, other sounds, characters, graphics, images or other data; as per the above modems, multiplexors being parts of switch boards are having a specific function to perform in such switch boards (which is basically a platform) even though they are categorically classified under sub-heading 8517 62 30 and 8517 62 70; he submits that the imported apparatus being parts of Photonic Service Switch are to be classified under CTH 8517 62 90. Relying on path (G) of the HSN, he subm....
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....as "Parts" under sub-heading 8517 70 10 of Customs Tariff Act and are exempted under serial no. 13S of the notification no. 24/2005-Cus dated 1.3.2005; Customs Tariff as well as the notification issued clearly recognize "Populated, Loaded Printed Circuit Boards" as "Parts" under sub-heading 8517 70 10; the respondent have been claiming the same classification which was upheld by Commissioner (Appeals); the order was accepted by the Revenue; however, since September-October 2018, Revenue has been again challenging the classification contending that the said cards are " Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus" under Sub-heading 8517 62 90--- "others". 8. Learned Advocate for the respondents submits that the Department did not dispute that the cards are "Populated Printed Circuit Boards" and the fact that Photonic Service Switch is DWDM equipment and the Cards imported are further equipment; the Department has not disputed the fact that the catalogue of Photonic Service Switch (PSS) 1830 assigns specific Parts Numbers to the Cards under "Parts List". He submits that popul....
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....then such device cannot be classified as a machine or mechanical appliance but has to be classified as part of the said other machine/appliances/entity; in the instant case, the Cards in question cannot perform any function unless incorporated in the DWDM equipment viz. Photonic Service Switch and their function is not independent or distinct from that of the said DWDM equipment but is integral and inseparable part of the said DWDM equipment. The Cards in question, therefore, cannot be classified as a Machine or apparatus and have to be classified as Parts of the said DWDM equipment. He submits that the issue is decided in the favour of the respondents by the following judgments:- (i) CC v Modicom Network P. Ltd.-2005 (185) ELT 333 upheld by the Supreme Court in CC v Modicom Network P. Ltd.-2015 (320) ELT 21; (ii) CC v N. I. System (India) P. Ltd.-2010 (256) ELT 173 (SC); (iii) US Customs Ruling No. NY N027030 dated 29th May 2008 and No. NY N027023 dated 28th May 2008; (iv) Order-in-Appeal No. MUM-CUSTM-AMP-APP/003/17-18 dated 31.01.2018 10. Learned Advocate further submits that Department relies on HSN notes under (G) ....
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....c for multiplexors, is accepted that tariff rate itself is nil; however, parts cannot be classified under a specific sub-heading for multiplexors. 12. Heard both sides and perused the records of the case. Brief issue for consideration before us is as to whether the goods imported by the appellants merit classification under CTH 8517 62 70 as contended by the Department or under CTH 8517 70 10 as claimed by the importer respondent. Learned Counsel for the respondent submits that they have been classifying the impugned goods under CTH 8517 70 10 and Learned Commissioner (Appeal) vide order dated 31.01.2018 has accepted their classification and the said order has been accepted by the Department. Though there is no res-judicator in matters of taxation, the assessment of the impugned goods over the years would certainly have a reckoning. The respondent claims that the impugned goods are parts of 1830 Photonic Service Switch (PSS), the Department contends that the same are having independent function and hence need to be classified along with the main machine under CTH 8517 62 70. For a proper appreciation it will be useful to have a look at the relevant headings of the Customs ....
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....ding apparatus for communication in wired or wireless network (such as local or wide area network); and the third single dash (-) for "Parts". We find that in respect of appeal number C/85235/2021, learned Commissioner (Appeals) finds that now coming to the item imported by the appellant i.e. OSLM-5-100G-WL3N: CARD, I find that the technical information provided in the leaflet of the supplier M/s Ciena Communications, USA, suggest that it is a part of Ciena's 5430 Packet- Optical Platform and is a five port Wavelogic-3 nano OTN services line module. It provides a physical platform and electrical interconnection for five line side. Accordingly, the impugned goods will be classified as parts of Packet Optical Switch under heading 85177010 being PCB. The function of a module has been considered by the Tribunal in the case of Modicom Network Pvt. Ltd. 2005 (185) ELT 333 (Tri-Bang) and held that Para 6 .......We find that the Main Switching Center consists of various modules in the form of PCBs. Each module will have its own function. The modules are all of standard format. There is a face plate on the front of each module with display elements, with controls and access t....
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....pecialized agencies or institutions. This having not been done, Department cannot simply rely on arguments advanced. Technical literature made available and description of the impugned goods in various imports documents and the findings of the impugned orders cannot be brushed aside. We find that the Department has not put forth any evidence to substantiate their contention. Therefore, in our considered opinion the impugned goods cannot function as independent machine/equipment. Therefore, we have no hesitation whatsoever holding the same to be the parts of Photonic Service Switch (PSS) 1830. 17. We also find that Revenue submits that on the basis of Explanatory notes to the HSN the items are complete machines or equipments classifiable under CTH 85176270. The Department submits alluding to the HSN that as per explanation (G) the equipment referred to therein allowed for connection to a wired or wireless communication network or the transmission or reception of speech or other sound, images or other data within such networks. A look at this explanatory notes shows us the following. "85.17- Telephone sets, including telephones for cellular networks or for other wir....
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....ther sounds, characters, graphics, images or other data. ..... (F) Transmitting and receiving apparatus for radio-telephony and radio- telegraphy. This group includes: (1) Fixed apparatus for radio-telephony and radio-telegraphy (transmitters, receivers and transmitter-receivers). Certain types, used mainly in large installations, include special devices such as secrecy devices (e.g., spectrum inverters), multiplex devices (used for sending more than two messages simultaneously) and certain receivers, termed "diversity receivers", using multiple receiver technique to overcome Fading. (2) Radio transmitters and radio receivers for simultaneous interpretation at multilingual Conferences. (3) Automatic transmitters and special receivers for distress signals from ships, aircraft, etc. (4) Transmitters, receivers or transmitter/receivers of telemetric signals. (5) Radio-telephony apparatus, including radio-telephony receivers, for motor vehicles, ships^ aircraft, trains, etc. (6) Portable receivers, usually battery operated, for example, portable receivers for calli....
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....ers, statistical multiplexers 8517 62 90 --- Other .... ...." 18. On going through the relevant HSN notes, we find that the apparatus or equipments referred in the notes are complete apparatus and not Populated Printed Circuit Boards of such apparatus. As submitted by the respondent the Network Interface Cards referred to in the notes are not PCB of any transmission or reception apparatus of heading 8517. Network Interface Cards connect the computers to the internet and therefore can be considered to have independent function. Going by the product literature and our discussions as above, we find that the impugned cards are incorporated in and or parts of DWDM equipments. 19. We find that this Bench has gone into the issue of classification of parts or equipment while dealing with the classification of antennas imported by the very same respondent case. This Bench observed that Now, a simple analysis of Heading 8517 effective from 1-1-2007, it is clear that the instruments/telephone sets for cellular networks/wireless net works, apparatus both for transmission and reception of voice, images or other data in a wired or wirel....
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....d a letter dated 12-11-2018 issued by the manufacturer of antenna i.e. M/s Ace Technology, Korea i.e. antenna supplied by them are passive part of base station i.e. e Node B (Sic). It is clarified that the antenna on its own is not capable of performing any function and when connected, it only transmits and receives only the signals. It is further stated that the antenna is not performing in any other functions like conversion or regeneration of voice, images or other data signals or switching and/or routing of signals. No technical literature has been placed by the Revenue in support of their contention that the imported antenna for base stations are designed to function independently as a machine, contrary to the claim of the Respondent that these are passive elements and can function only when attached to the base station for receiving and sending signals. The Revenue has placed the general information available on net about the multi fold use of e node antenna in 4G & 5G network in the developed wireless cellular technology. Comparing the data placed on the imported goods, we find merit in the contention of the Learned Advocate for the appellant that to be antenna as machine, i....
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....stitute an article covered by a heading of this section, in all cases are to be classified in their own appropriate heading even if specially designed to work as part of a specific machine. Further it is contended that Antenna is a part of a machine classifiable under Heading 8517, only in the situation when it is not covered by any other headings of the section. As per department, since it is classifiable under 8517 62, hence, not to be considered under sub-heading8517 70 as 'parts'. The said Chapter note reads as follows : "2. Subject to Note 1 to this Section, Note 1 to Chapter 84 and to Note 1 to Chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules : (a) parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538, and 8548) are in all cases to be classified in their respective headings; (b) other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a ma....
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....s like sensors. These I.O. Modules come with software tailored to their specific pre-defined functions. Therefore, one has to see the package in the holistic manner. The package as a whole- both hardware and software- constitutes one single functional unit. Accordingly, we hold that I.O. Modules and Chassis are classified as parts and accessories of Automatic Regulating or Controlling Instrument/Apparatus under CTH 9032.90.00." 21. In view of the above, we find that the Department could not support their contention. No technical literature was submitted; in spite of the fact that the imports have been taking place over a period of time. Learned Commissioner (Appeals) has been upholding the contention of the appellants. In one instance Revenue has accepted the order of Commissioner (Appeals). We find that the Department has not drawn any samples and did not obtain technical opinion to support their claim that the impugned goods are complete machines or equipment capable of independent function themselves so as to merit classification under CTH 85176270. On the contrary, the respondents could demonstrate by technical literature; samples and the ratio of judgments cited above....