AI Drafter 
TaxTMI 
TaxTMI 
2023 (11) TMI 69
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....ccordingly would be entitled to exemption from Basic Customs Duty BCD under the notification dated 01.03.2005, as amended by the notification dated 11.07.2014. The demand of customs duty for the period from July 2014 to June 2017 has, therefore, been dropped. The penalty imposed upon Beetal Teletech has also been dropped. This order has been assailed in Customs Appeal No. 51875 of 2021. 2. The penalty imposed upon Ranbir Bhandri has also been dropped. This order has also been assailed by the Department in Customs Appeal No. 51874 of 2021. 3. Beetal Teletech is a distributor of Information Technology products. It imported WAP from various foreign suppliers for trading purpose in India and it classified the imported WAP under CTI 8517 62 90 during the period from July 2014 to June 2017. According to the appellant, WAP works on Multiple Input/Multiple Output MIMO technology, but does not support Long Term Evolution LTE standard. 4. It would, therefore, be necessary to state briefly about WAP, MIMO and LTE: (i) WAP: It is a networking device used for wireless communication within the Local Area Network LAN. It helps in connecting wireless enabled devices such as Lapto....
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....ustoms duty to WAPs imported by it during the relevant period. 7. The show cause notice states that exclusion under Serial. No. 13(iv) applies to either of the products, namely MIMO products or LTE products for the reason that from a plain reading of the notification, it is clear that exemption has been denied on two types of products i.e. MIMO products and LTE products. As there are only two types of products at Serial No. (iv) of the notification, the conjunctive 'and ' has been used without using the term 'product' for both the items. Further, if the purpose was to apply the said condition on products having both MIMO technology and LTE standards, then Serial No. 13(iv) would have read as follows: (i) LTE products having MIMO technology OR (ii) LTE products with MIMO technology 8. Secondly, the show cause notice notes that between the words 'MIMO' and 'LTE', 'and' is placed but it is not followed by a comma. The show cause notice places reliance on the judgment of the Supreme Court in Shree Durga Distributors vs. State of Karnataka 2007 (212) E.L.T. 12 SC. 9. The show cause notice also invokes the extended period of limitation ....
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....and LTE products; (iii) Accordingly, WAP being MIMO products, by virtue of use of MIMO technology in them, would fall within the exclusion clause; (iv) The expression 'and' is sought to be interpreted by Beetal Teletech as if it is a conjunctive between a technology and a standard and accordingly, the products arising out of such a combination alone would be hit by the exclusion clause. If this was the intent behind the said exclusion clause, then the expression used would have simply been 'LTE products with or having MIMO technology'; (v) MIMO technology is a sub-set technology of LTE architecture, protocols and system. Further, it is not mandatory to have both MIMO and LTE; (vi) Argument that WAP is essentially an Information Technology device and as the exclusion clause is meant to cover only telecom equipment and devices, WAP cannot be excluded from the exempted category is misconceived; (vii) WAP is at the terminal point of the radio communication systems, which is both external and internal to a building or large spaces etc., in its spread. It is very much a part of the radio communications systems; and (viii) TRAI, in its....
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....e MIMO and LTE. Thus, the term 'Multiple Input/Multiple Output (MIMO) and Long Term Evolution (LTE) products' means products which contain both MIMO and LTE; (iv) A Bench of the Tribunal of Chennai in M/s. Ingram Micro India Private Ltd. vs. The Commissioner of Customs Customs Appeal No. 41694 of 2019 decided on 26.10.2020, has confirmed the classification of identical product (i.e. WAP) under CTI 8517 62 90 and extended the benefit of the subsequent notification dated 30.07.2017. The Department has accepted the decision of the Tribunal. Therefore, once the benefit has been granted to Ingram Micro in the subsequent notification for the identical product, the benefit under the notification dated 01.03.2005, as amended on 11.07.2014, should also be extended; (v) India is a signatory to the Information Technology Agreement dated 13.12.1996 by the World Trade Organization. The Information Technology Agreement requires each participant to eliminate and bind customs duties at zero for all products specified in the Agreement. India signed the Agreement on 01.07.1997. Pursuant to Information Technology Agreement, India introduced the notification. At the time of i....
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....ms leviable thereon. Serial No. 13 of heading 8517 exempts all goods, except those mentioned in (i), (ii), (iii) and (iv). Ingram Micro had claimed exemption under Serial No. 13 (iv) which is: "(iv) Multiple Input/Multiple Output (MIMO) and Long Term Evolution (LTE) Products." (emphasis supplied) 17. A bare perusal of the exclusion clause (iv) under Sl. No. 13 of notification shows that it covers MIMO and LTE products. The sole dispute in this appeal is whether this exclusion clause covers products having only MIMO technology and not working on LTE standard. Exclusion clause (iv) uses the conjunction 'and' and, therefore, it can be urged that the scope of clause (iv) can be restricted to those products that have MIMO and LTE both and that the product that only has MIMO technology may, therefore, not be covered by this exclusion clause and, therefore, may not be excluded from the scope of Serial No. 13. 18. The contention of the Department is that 'and' should be read as 'or' in clause (iv) so that it would cover MIMO products or LTE products. The contention advanced on behalf of Ingram Micro is that since the exclusion clause (iv) uses the conjunction 'and' its scope....
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....-TP) products;" 22. Learned special counsel for the appellant contended that clause (iv) would effectively mean and cover two categories of products, namely, (i) Multiple Input/Multiple Output (MIMO) products and (ii) Long Term Evolution (LTE) products and that MIMO products and LTE products are products which have distinct identities. Learned special counsel also contended that the expression 'Multiple Input/Multiple Output (MIMO)' appearing before 'and' does not, by itself, mean anything unless it is followed by expressions like 'technology' or 'products'. Since the exception carved out has to be 'goods', this expression has to be interpreted to connote products based on MIMO technology. Thus, the expression 'products', appearing after 'LTE' has to be read with 'MIMO' to mean and cover MIMO products. Further, 'products' being the common factor for both MIMO technology and LTE standard, the expression 'and' has been used in a conjunctive way to cover individually MIMO products and LTE products. Learned special counsel, therefore, contended that as there are only two types of products at Serial No. 13 (iv), the conjunctive 'and' has been used without using the term 'products' tw....
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....h the plea of the ld. JDR that by use of "whole milk powder" and "cream" being necessarily contained in the whole milk powder, the preparation should be deemed to have contained both milk and cream. The two products, viz., "milk" and "cream" are commercially known differently. When the Tariff heading uses names of two different commercial commodities joined by a conjunctive word, the preparation must contain those commodities in their natural form as available in the market. There are preparations which are made of both milk and cream. One of the examples given by the ld. Advocate, is, `Gulab Jamum' being a preparation of milk and cream." (emphasis supplied) 26. The Punjab and Haryana High Court in Kulcip Medicines also observed as follows: "11. The question which falls for consideration is whether word 'and' used after the word 'clearing' but before the word 'forwarding' at two places in clause (j) be considered in a conjunctive sense or dis-injunctive sense. It appears to be fairly well settled that the context and intention of legislature are the guiding principles. In that regard reliance may be placed on the judgment of Hon'ble the Supreme Court in the case of Mazagaon D....
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....g machines and units thereof for a network that is used primarily for the sharing of resources such as central processor units, data storage devices and input or output units - including adapters, hubs, inline repeaters, converters, concentrators, bridges and routers, and printed circuit assemblies for physical incorporation into automatic data processing machines and units thereof. Imported WAP is a networking equipment working in LAN connecting Wi-fi enabled devices such as laptops, smartphones, tablets, etc. to a wired network. Thus also, imported WAP is entitled to the exemption from the whole of the customs duties under the ITA. 29. It is also well settled law that an exclusionary clause in an exemption notification should be strictly construed and must be given a narrow meaning so as to not frustrate the intention behind the exemption notification. In this regard, reliance can be placed on the decision of Supreme Court in Pappu Sweets and Biscuits versus Commissioner of Trade Tax, U.P., Lucknow 1998 (10) TMI 452-Supreme Court, wherein the Supreme Court observed: "10. The notification further discloses that the object of declaring exemption from payment of sales ta....