TaxTMI 
TaxTMI 
TaxTMI 
2025 (1) TMI 556
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....ssification 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 these goods were a kind of Network Interface Cards [NIC cards]....
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.... 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 Cards. To support this contention reliance has been placed upon the aforesaid decision of the Tribunal Vodafone Idea. 8. Shri Mihir Ranj....
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....p; 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 u Free - 85176930 --- Routers u Free - 85176940 --- X 25 Pads u Free - 85176950 --- Subscriber end equipment u Free - 85176960 --- Set top boxes for gaining access to internet u Free - 85176970 --- Attachments for telephones u Free - 85176990 --- Other u 10% - 851770 - Parts: 85177010 -- Populated, loaded or stuffed pri....
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.... 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) Transceivers (SFP): A transceiver enables interface with the optical fibre connectivity. Since the various board / card (another integral part of the main-equipment) perform processing in the electrical domain (and not the optical domain), the main-equipment would not be able to function without a transceiver to connect to the optical fibre network. Transceivers come in various forms such as Small Form Factor Pluggable (SFPs) or the C-Form Factor Pluggable (CFP), besides others. Transceivers are passive devices which work in conjunction with the other components deployed within the PTN equipment chassis. 16. It is now necessary to examine....
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....l 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 'Parts' 5 Vodafone Idea. Order of the Tribunal dated 20.09.2022 in Customs Appeal No. 52287 of 2019 Line Cards for Routers Classifiable under 8517 70 as 'Parts' 21. In terms of applicability of the aforesaid decisions, a summary of similarity between the Cards used for DWDM/OTN equipment in these decided appeals and the main equipment in the instant appeal, i.e. PTN equipment is as follows:- (i) Modular Architecture - In terms of design, the DWDM/OTN 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 o....
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.... 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 slot designed for them in the primary chassis equipment; and Test 2 - Incapable of operating independently of the main machine- The Tribunal concluded that until the said cards are slotted in the dedicated slots into the chassis of the equipment, these cards cannot function. Thus, the cards in question could not perform independently of the router. 24. In the present case, the subject goods under dispute are not cross compatible with devices of other manufacturers and hence are solely 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....
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....rmine 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 Note 3 is misconceived. 31. The subject goods are also not NIC cards as was held in Vodafone. The Principal Commissioner committed an error in holding that the subject goods are nothing but NIC cards as like NIC cards connect computer over a network in telecommunication, these cards connect OTN equipment over an optical network. 32. Definition of 'Network Interface Card', as given in the Thomas' Concise Telecom & Networking Dictionary, is as under: "Network interface card (NIC): A network interface device in the form of a circuit card that is installed in an expansion slot of a computer to provide network access. Examples of NICs are cards that interface a computer with an ethernet alien and cards that interface of com....