TaxTMI 
TaxTMI 
2024 (7) TMI 561
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....duty has been confirmed with interest and penalty. 2. The department of the imported goods by the appellant, the classification adopted by the appellant in the three Bills of Entry and the classification determined by the department are as follows: Description of the imported goods Classification by appellant under CTI Classification by department under CTI DW011707 ZTE TS4 100G Transponder Card (Non-WPC Item) (Captive Consumption) (For Cellular Telephony Network) 8517 70 90 8517 62 90 DW011706 ZTE MX2 100G Muxponder Card (Non-WPC Item) (Captive Consumption) (For Cellular Telephony Network) 8517 70 90 8517 62 90 DW021613 ZTE Optical Splitter Card SOP2 (Non-WPC Item) (Captive Consumption) (For Cellular Telephony Network) 8517 70 90 8517 62 90 3. In respect of the classification by appellant, the Basic Customs Duty is NIL (S. No. 5 of NN 57/2017), Education Cess is Nil and ISGT is @ 18%. In respect of the classification by the department, the Basic Customs Duty is @ 10%, Education Cess is @ 3% and IGST is @ 18%. 4. The appellant cleared these goods under CTI 8517 70 90 as 'parts' by virtue of Section Note 2(b) of Section XVI. However, the ....
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....reme Court on 30.01.2023; (iv) The subject cards that have been imported by the appellant are not a machine in itself but parts of the main equipment and in support of this contention reliance has been placed upon a Division Bench decision of the Tribunal in M/s. Vodafone Idea Limited vs. Principal Commissioner of Customs (Import), New Delhi Customs Appeal No. 52287 of 2019 decided on 20.09.2022; and (v) The subject goods are not NIC Cards. To support this contention reliance has been placed upon the aforesaid decision of the Tribunal Vodafone Idea. 7. Shri Mihir Ranjan, learned special counsel appearing for the department, however, supported the impugned order and contented that it does not call for any interference in this appeal. In this connection, learned special counsel placed the order passed by the Principal Commissioner. 8. The submissions advanced by the learned counsel for the appellant and the learned special counsel appearing for the department have been considered. 9. The relevant tariff entries are reproduced below: Tariff Item Description of goods Unit Rate of Duty (1) (2) (3) (4) (5) 8517 Telephone sets, i....
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....criber end equipment u Free - 8517 69 60 --- Set top boxes for gaining access to internet u Free - 8517 69 70 --- Attachments for telephones u Free - 8517 69 90 ---Other u 10% - 8517 70 - Parts: 8517 70 10 -- Populated, loaded or stuffed printed circuit boards u Free - 8517 70 90 -- Other kg 10% - 10. The following facts would emerge in connection with the subject goods: (i) The subject cards are to be used in ZTE ZXONE 8000 ('main equipment'); (ii) The main equipment is optical transport network equipment classifiable under CTI 8517 62 90; (iii) The main equipment consists of a modular chassis i.e., chassis with dedicated slots for various populated printed circuit boards ('Populated PCBs') ('Cards', for short); (iv) The subject cards have terminal pins on one end which enable connection with the respective dedicated slots in the chassis; (v) All the cards in the main equipment communicate with each other via backplane interface in the chassis of the main equipment; and (vi) This backplane interface is prop....
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....nality of multiplexing multiple sub-rate client interfaces onto the line interface. Multiplexing involves the combination of multiple signals in a manner that they can be carried on the same physical medium. In this card also, there is no conversion of the voice, images, or other data or information being carried on the signal. (c) Optical Splitter card: This card splits a single optical input into multiple optical output. This is a passive component and works in conjunction with the other components or cards deployed in the optical transport network equipment chassis. 14. It is now necessary to examine the decisions on which reliance has been placed by learned counsel for the appellant. 15. In Ciena Communications India, the Tribunal held that the goods Hybrid/Matrix Cards and Small Form Factor Pluggable for OTN equipment are correctly classifiable under 8517 70. The Tribunal also noted that the goods do not perform their function independently, without being fitted in the chassis of the main equipment. It also needs to be noted that while making reference to Section Note 2(b) to Section XVI, the Tribunal held that the goods are classifiable as 'parts'. The Tribunal....
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....e DWDM equipment and main equipment have scalable and modular architecture. The chassis of both the machines contain dedicated slots in which cards can be plugged. (ii) Cards used in such equipment are in the nature of PCB Assembly - It is an undisputed fact in the present case as well as the Reliance Jio that the cards incorporated on the chassis of end equipment are in the nature of PCB assembly. Such PCB assembly was held to be classifiable under CTI 8517 70 10 by relying on the decision of the Tribunal Commissioner of Cus., Bangalore vs. Modicom Network Pvt. Ltd 2005 (185) E.L.T. 333 (Tri - Bang.). (iii) Cards are parts of equipment which cannot function independently - Similar to subject cards used in the main equipment, the cards used with DWDM equipment are specifically designed for use with the said equipment. Such cards draw power and intelligence from the DWDM equipment and cannot function unless incorporated in the DWDM equipment. The subject cards in the present appeal are dependent on the backplane components of the main component for drawing power and intelligence. Consequently, the subject cards cannot function unless they are incorporated in the ma....
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....lely usable for the pre-determined purpose i.e., usage with the main equipment. Thus, the subject goods also have no separable function of their own. It is also seen that the main equipment has modular chassis i.e., chassis has dedicated slots for the subject goods. Unless the subject goods are slotted in the chassis in their designated slots, the cards do not source power and intelligence and hence cannot operate independently of the main equipment. 22. Thus, the twin tests laid down in Vodafone Idea Limited, are satisfied by the subject cards imported in the instant case and would be classifiable as 'parts' of CTI 8517. 23. This apart, the subject cards are in the nature of Populated PCB. Undisputedly, the main equipment is classifiable under CTI 8517 62 90. The subject cards are not specifically covered under any heading of Chapter 84 or 85. Thus, they do they do not merit classification as per Note 2(a). Sub Heading 8517 70 specifically identifies and recognizes populated PCBs as 'parts'. The subject cards (Hybrid/Pure Matrix Cards) are populated PCB and thus merit classification under CTI 8517 70 10 as 'parts' of goods falling under Heading 8517 by virtue of Section Note....