TaxTMI 
TaxTMI 
2023 (6) TMI 904
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.... installation and commissioning, providing support services to major telecom and internet service provider and developing software. The applicant has proposed to import "Nokia 7210 SAS" products in India for selling the same domestically. They are presently importing the components of the goods at Chennai port and classifying the essential components of the subject goods individually for discharging basic customs duty (BCD) at applicable rates. 2.1 The applicant stated that the Nokia 7210 SAS Router family comprises several models of modular and fixed routers, identical in functioning, but different in specifications, to meet different customer requirements. The applicant has specified the following models in the application: Modular Routers 7210 SAS-R12, 7210 SAS-R6 Fixed Routers 7210 SAS-T, 7210 SAS-MXP, 7210 SASS 1/ IOGE, 7210 SAS-Sx 1/ IOGE, 7210 SAS-Sx 10/100GE, 7210 SAS-K30 ETR, 7210 SAS-K12 ETR, 7210 SAS-1-K12 2.2 As per the applicant, the impugned products are IP routers and are used in a telecom network. These devices provide service providers with IP routing and carrier Ithernet demarcation, access, and aggregation for mobile backhaul, business, and residential serv....
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.... by all routers. They have pointed out that the price of the impugned devices is much higher than normal switches which are installed to perform the limited function of switching. The applicant has stated that in general and commercial parlance too, the subject goods are referred to as IP routers, and are installed to perform routing functions. Accordingly, the applicant has suggested subheading 85176290 of the Customs Tariff Act, 1975 for the classification of the goods. 2.4 Sr. No. 13N of Notification No. 24/2005- Customs, as amended, exempts router under subheading 85176290 from 100% BCD. The applicant has stated that the goods under consideration are eligible to avail of this exemption as the goods are complete routers. The switching function performed by these devices is a subset of router functions. Therefore, the subject goods remain complete routers capable of performing switching functions. Referring to note 3 to Section XVI, they have stated that the classification of a machine designed for performing two or more complementary or alternative functions ought to be made with respect to its principal function. In the present case, the principal function is routing and the s....
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....pplication was submitted. The applicant agreed to submit a few sample invoices of the products under question (received by them from the sellers/ or from any other buyer) in support of their claim for classification and subsequent notification benefit. They explained various tariff entries-viz. 85176290 and 85176930 (erstwhile) during their presentation. The applicant was requested to explain how their products covered under the CAAR-I application differed from carrier-class ethernet switches. They explained the difference in technical language, however, representative Shri Vishal Gupta agreed to submit the write-up. The technical opinion of the TEC was shared with the applicant for their comments on the same. 4.1 Vide email dated 07.10.2022, the applicant made additional submissions. They reiterated their original submissions made in the CAAR-I application. An ethernet switch is a layer-2 device of the Open System Interconnection (OSI) model and uses a MAC address to forward the data. The main function of the switch is to connect various devices together at a location. A router on the other hand connects multiple switches and their respective networks to form a large network. A r....
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....ption of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528. CTH 8517 is further subdivided into three I-dash sub-headings. The second one-dash subheading covers 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). This group includes apparatus which allows for the connection to a wired or wireless communication network or the transmission or reception of speech or other sounds, images or other data within such a network. Communication networks include within, inter alia, carrier-current line systems, digital-line systems and combinations thereof. They may be configured, for example, as the public switched telephone networks, Local Area Networks (LAN), Metropolitan Area Networks (MAN) and Wide Area Networks (WAN), whether proprietary or open architecture. This group includes ( 1 ) Network interface cards (e.g., Ethernet interface cards) (2) Modems (combined modulators; demodulators) ....
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....impugned products are capable of performing both switching and routing functions. However, they have pointed out that based on the datasheet of these products, their primary function appears to be routing. In light of the above, it appears that the subject goods merit classification under subheading 85176290 as routers. 6. In respect of notification benefit under Sr. No. 13N of Notification Noe 24/2005, as amended, the entry exempts routers from 100% BCD. As discussed in previous paras, based on the datasheet, trade parlance and technical opinion of TEC, the subject goods are routers capable of performing some additional functions. In the case of Commissioner of Customs (Import), Mumbai Vs. Dilip Kumar and Company and Ors [MANU/SC/0789/20181, the Hon'ble Supreme Court observed that " 52. To sum up, we answer the reference holding as under - (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such....