TaxTMI 
TaxTMI 
2025 (1) TMI 556
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....penalty. 2. The appellant now seeks classification of Hybrid/Pure Matrix Cards for PTN Equipment under CTI 8517 70 10 as parts of goods falling under Heading 8571, and Small Form Factor Pluggable for PTN Equipment under CTI 8517 70 90. 3. The details of the imported subject goods, the classification adopted in the Bills of Entry and the classification now sought by the appellant are as follows: Description of the imported goods Classification by appellant under CTI Classification by department under CTI Classification now claimed by the appellant under CTI Hybrid/Pure Matrix Cards for PTN Equipment 8517 70 90 8517 62 90 8517 70 10 Small Form Factor Pluggable (SFP) for PTN Equipment 8517 70 90 8517 62 90 8517 70 90 4. 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 department, the Basic Customs Duty is @ 10%, Education Cess on BCD @ 3% and IGST is @ 18%. 5. The appellant cleared these goods under CTI 8517 70 90 as parts by virtue of Section Note 2(b) of Section XVI. However, the department believed that th....
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.... by the department, as has been noted by the Supreme Court in the appeal filed by the department to assail the aforesaid order of the Tribunal in Reliance Jio (I); (iii) Reliance has also been placed upon Division Bench decisions of the Tribunal in M/s. Ciena Communications India Pvt. Ltd. vs. Principal Commissioner of Customs (Import) [Customs Appeal No. 86992 of 2021 decided on 18.12.2023] and Commissioner of Customs, Mumbai (Air Cargo Import) vs. Reliance Jio Infocomm Ltd. [Customs Appeal No. 88479 of 2018 decided on 22.06.2022] [hereinafter referred to as Reliance Jio (II)],; (iv) The appeal filed by the department to assail the aforesaid decision of the Tribunal in Reliance Jio (II) was dismissed by the Supreme Court on 30.01.2023; (v) The subject goods 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 (vi) The subject goods are not NIC Car....
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....n a wired or wireless network (such as a local or wide area network): 85176100 -- Base stations u 10% - 851762 -- Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus: 85176210 --- PLCC equipment u Free - 85176220 --- Voice frequency telegraphy u Free - 85176230 --- Modems (modulators-demodulators) u Free - 85176240 --- High bit rate digital subscriber line system (HDSL) u Free - 85176250 --- Digital loop carrier system (DLC) u Free - 85176260 --- Synchronous digital hierarchy system (SDH) u Free - 85176270 --- Multiplexers, statistical multiplexers u Free - 85176290 --- Other u 10% - 851769 -- Other: 85176910 --- ISDN System u Free - 85176920 --- ISDN terminal adaptor ....
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....oice, data, and video; within this technological arrangement, the chassis of the main equipment has dedicated slots marked for these goods; and that these goods become functional when plugged into these slots from where it derives the source power and intelligence. 15. The technical details of the subject goods in dispute have been described in the following manner: (a) Switching cards (pure matrix / hybrid matrix): These cards are high capacity switching boards and support TDM switching as well as Packet level switching and direct data card connectivity. The basic function of these cards is to implement grooming of service line / network boards and client / tributary boards. It implements non-congestion full cross connection, multicast and broadcast services. It enables the communication between the cross connect boards and other boards. This card performs the function of switching and there is no conversion of any voice, images, or other data or information being carried on the signal. Inputs signals to these cards are by other line-side cards / client-side cards including SDH, Ethernet and Internet Protocol, through proprietary backplane interface. (b) Trans....
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....on without being incorporated in DWDM equipment and accordingly, such cards cannot be considered as independent apparatus. 19. The present matter, therefore, stands concluded by the aforesaid decisions of the Tribunal, which have been upheld by the Supreme Court. 20. The following chart will give the classification of goods of similar nature involved in the decisions of the Tribunal. S. No. Case Title Goods Remarks 1 Reliance Jio. Order of the Tribunal dated 29.07.2022 in Customs Appeal No. 88483 of 2018 Small-Form Factor Pluggable (SFP) Classifiable under 8517 70 as 'Parts' 2 Cienna Communications. Order of the Tribunal dated 18.12.2023 in Customs Appeal No. 86992 of 2021 Transponder, Muxponder and Splitter Card for OTN equipment Classifiable under 8517 70 as 'Parts' 3 Reliance Jio. Order of the Tribunal dated 22.06.2022 in Customs Appeal No. 88479 of 2018 Transponder and Muxponder Card for DWDM equipment Classifiable under 8517 70 as 'Parts' 4 Huawei Telecommunications. Order of the Tribunal dated 05.10.2023 in Customs Appeal No. 86186 of 2022 Interface Cards for OTN equipment Classifiable under 8517 70 as 'Part....
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....rts'. 23. A Division Bench of the Tribunal in Vodafone Idea Limited (Customs Appeal No. 52287 of 2019 decided on 20.09.2022) in the matter of the appellant had examined the classification of router line cards imported for use in Cisco Routers. The Tribunal recorded a finding that in contrast to network interface cards, the cards under consideration were router line cards which were essential for the routers to operate. Thus, the Tribunal held that the correct classification of the cards would be under CTI 8517 70 90 as 'parts' and not CTI 8517 69 90 as 'other communication apparatus'. The Tribunal, while deciding classification, also discussed HSN Explanatory Notes to CTH 8479 which deal with machines having individual function and laid down the following twin tests for determining whether an item is classifiable as 'part': Test 1 - No separate identifiable function of its own- The Tribunal held that the line cards are proprietary of the original equipment manufacturer and are not cross compatible with devices of other manufacturers but are usable for the purpose for which they are designed. Thus, the cards possess no functionality other than when used in the dedicated ....
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....the Supreme Court in Commissioner of Cus., Bangalore vs. Modicom Network Pvt. Ltd [2015 (320) E.L.T. 21 (S.C.)]. 29. The Principal Commissioner has in paragraphs 93 and 94 of the impugned order incorrectly relied upon General Rules of Interpretation Rule 2(a) to hold that though the subject goods are in the nature of incomplete populated PCBs, but they have the essential character of the network interfacing equipment and, therefore, should be considered as complete machine for the sake of classification. Since these goods have no capability to function on a standalone basis and were not imported collectively but through separate Bills of Entry, Rule 2(a) of the General Rules of Interpretation cannot be applied to determine classification. 30. The Principal Commissioner also relied on Note 3 to Section XVI to infer that the main equipment is a composite machine consisting of two or more machines fitted together to form a whole. Note 3 will not be applicable as the main equipment does not consist of two or more machines, nor does it consist of machines designed to perform two or more complementary or alternative functions. Thus, reliance placed in the impugned order on Section ....