TaxTMI 
TaxTMI 
2025 (1) TMI 744
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....t boards, imported by them, for the manufacture of telecommunication equipment through the port of Chennai. 2. Applicant has stated as follows in their statement of the relevant facts having a bearing on the question(s) on which the advance ruling is required enclosed with the CAAR-1 application : 2.1 The Applicants are engaged in the manufacture of telecommunication equipment and deals with a wide range of telecommunication equipment like GPON OLTS and ONTS, optical fibers and other internet accessories. 2.2 Fiber-to-the-Home (FTTH) is a technology that delivers communication signals from a central point to the individual customer over optical fiber. The two important types of systems that make FTTH broadband connections possible are Active Optical Networks (AON) and Passive Optical Networks (PON). 2.3 AON refers to a network in which the signal is transmitted using a photoelectric conversion device, active optical components, and fiber optics. AON is a type of network that enables point-to-multipoint optical communication for a variety of industrial applications such as optical fiber transmission lines and optical remote terminals. 2.4 PON refers to an optical dist....
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....TS/OLTs, the Applicants import populated printed circuit boards. It may be noted that a printed circuit board (PCB) is a medium used to connect electronic components to one another in a controlled manner, further, populated PCB is a circuit board with electronic components. Electrical components may be fixed to conductive pads on the outer layers in the shape designed to accept the component's terminals, generally by means of soldering, to both electrically connect and mechanically fasten them to it. In general, populated PCBA (Printed Circuit Board Assembly) plays a crucial role in handling data processing, optical interface, service provisioning, management, and control functions in GPON OLTS and ONTs. It enables the efficient operation and delivery of high-speed internet, voice, and other services over the GPON network to both the service provider and end-users. 2.9 The following are the essential functions performed by PCBA in GPON OLTs and ONTS: 2.9.1 Role of PCBA in the functioning of OLTs : 2.9.1.1 Data Processing: The PCBA consists of a powerful processor, memory, and specialized network processors that handle the processing of data packets. It performs functions s....
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....ment. 3. Applicant's interpretation of Law 3.1 The applicant has submitted that Chapter 85 of the Customs Tariff Act, 1975 deals with classification of electrical machinery and equipment and parts thereof, sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such article. It may be noted that Tariff Heading 8517 provides for classification of telephone sets, including telephones for cellular networks or for other wireless networks: other apparatus for the 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), other than transmission or reception apparatus of Heading 8443, 8525, 8527 or 8528. 3.2 They further submitted that on scrutiny of the entries covered under fourth one dash ["-"J under Tariff Heading 85 17 "Parts", it can be seen that populated, loaded, stuffed printed circuit boards find specific mention under 8517 79 10. CTH 8517 of Chapter 85 of the Customs Tariff Act, 1975 has been extracted below for reference : Tariff Item Description of goods 8517 Tele....
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.... Telephone sets, including smartphones and other telephones for cellular networks or for other wireless networks; other apparatus for the 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), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528 - Telephone sets, including smartphones and other telephones for cellular networks or for other wireless networks : 8517 11 -- Line telephone sets with cordless handsets : 8517 11 10 --- Push button type 8517 11 90 --- Other 8517 13 00 -- Smartphones 8517 14 00 -- Other telephones for cellular networks or for other wireless networks 8517 18 - Other : 8517 18 10 --- Push button type 8517 18 90 --- Other 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) : 8517 61 00 -- Base stations 8517 62 -- Machines for the reception, conversion and tran....
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....itches and Voice over Internet Protocol (VoIP) equipment, namely, VoIP phones, media gateways, gateway controllers and session border controllers; (g) Carrier Ethernet Switch, Packet Transport Node (PTN) products, Multiprotocol Label Switching- Transport Profile (MPLS-TP) products; (h) Multiple Input/Multiple Output (MIMO) products; (i) Long Term Evolution (LTE) products 10% - From the above, it may be noted that vide Sl. No. 22 of Notification No. 57/2017-Cus., dated 30-6-2017, reduced customs duty of 10% is available on populated printed circuit boards of Packet Optical Transport Product or Switch (POTP or POTS) products. 3.4 The applicant has submitted that Packet Optical Transport Product (POTP) is a network communication device or system designed to efficiently and seamlessly transmit data across telecommunications networks using a combination of packet-switching and optical transport technologies. It integrates packet-based traffic with traditional optical transport capabilities, allowing for the high-speed and reliable transmission of data over long distances: POTP devices typically combine the ....
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....nal Commissioner of Customs, Chennai-II (Import) sent the detailed comments vide their letter dated 17-3-2024 issued vide File No. F. No. CUS/APR/MISC/633/2024-GR 5A. 4.3 Inter alia it has been informed that the subject goods are rightly classifiable under CTI 85176290 and are not eligible for concessional rate of BCD @10% under Sr. No. 22 of Notification No. 57/2017-Customs, dated 30-6-2017 in view of the reasons as stated under Annexure-I to the letter dated 17-3-2024. The brief of the Annexure-I is as below : 4.3.1 Attention is invited to the photographs of the product proposed to be imported by the applicant wherein the subject item is having UF adapter-APC stuffed on the PCBA. and thereby the subject item does not function only as a PCBA, but having an essential component for GPON the subject item is capable of functioning as a GPON device. 4.3.2 Attention is invited to the photographs of the product proposed to be imported by the applicant clearly mention GPON (GPON0006B6CAK and GPON00C4K77A). It appears that the Populated PCBA proposed to be imported is a GPON Board in itself, capable of functioning as GPON apparatus. 4.3.3 PON apparatus are fiber optic products ....
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....oduct in question finds specific mention under 8517 79 10 which reads "Populated, loaded or stuffed printed circuit boards". In view of the same alone the classification proposed by the Ld. Additional Commissioner is liable to rejected. Furthermore, it is settled proposition of law that residual entry should not be resorted to unless the product cannot be classified under any of the other entries. The classification proposed by the Ld. Additional Commissioner is a residual entry using the term "Other". Further, submissions and clarifications submitted by the Applicant has been taken on record. 6. I have considered all the materials placed before me in respect of the subject goods. I have gone through the submissions and additional submission made by the applicant during the personal hearing. Therefore, I proceed to pronounce a ruling on the basis of information available on record as well as existing legal framework. The issue before me is whether the applicant is eligible to claim the benefit of reduced duty of 10% vide Sl. No. 22 of Notification No. 57/2017 Customs, dated 30-6-2017 in respect of Populated Printed Circuit Boards, imported by them, for the manufacture of telecom....
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.... 8517 62 50 --- Digital loop carrier system (DLC) u Free - 8517 62 60 --- Synchronous digital hierarchy system (SDH) u Free - 8517 62 70 --- Multiplexers, statistical multiplexers for PDH based Wireline Telephony u Free - 8517 62 90 --- Other u 20% - 8517 69 --- Other : 8517 69 10 --- ISDN System u Free - 8517 69 20 --- ISDN terminal adaptor u Free - 8517 69 40 --- X 25 Pads u Free - 8517 69 50 [* * *] 8517 69 60 --- Set top boxes for gaining access to internet for Wireline Telephony u Free - 8517 69 70 --- Attachments for telephones u Free - 8517 69 90 --- Other u 20% - - Parts : 8517 71 00 -- Aerials and aerial reflectors of all kinds; parts suitable for use therewith. u 20% - 8517 79 -- Other : 8517 79 10 --- Populated, loaded or stuffed printed circuit boards u 20% - 8517 79 90 --- Other u ....
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....ts; (h) Multiple Input/Multiple Output (MIMO) products (i) Long Term Evolution (LTE) products 10% 7.3.1 From the above it is evident that Printed Circuit Board Assembly (PCBA) of following goods, namely : (c) Combination of One or more of Packet optical Transport Product or Switch (POTP or POTS) will be eligible for exemption benefit available as per Notification No. 57/2017-Cus., dated 30-6-2017. 7.4 I find that the Board vide its Circular No. 8/2023, dated 13-3-2023 has clarified items under said entries specifically those at (b) to (h), amongst (a) to (h), in the Notification No. 57/2017-Cus., dated 30-6-2017, for better understanding by all stakeholders for a more effective identification of products and equipment covered therein. The relevant para of the said circular is reproduced verbatim : Attention of the field formations is invited to Notification No. 57/2017-Customs, dated 30-6-2017 amended by Notification No. 2/2019-Customs, dated 29-1-2019 which, against Tariff Items 8517 62 90 and 8517 69 90, gives descriptions of certain goods that are telecommunication products or equi....
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....nnexure-1 to the said circular clearly states that Notification description of 'Combination of one or more of Packet Optical Transport Product or Switch (POTP or POTS)' covers following Machines/apparatus : (i) Optical Line Terminal (OLT) for FTTX (GPON/ EPON/ XGSPON/10GEPON/NG-PON2/25GPON/ 50GPON etc.); (ii) Optical Network Terminal (ONT) for FTTX (GPON/ EPONVXGSPON/10GEPON/NG-PON2/25GPON/ 50GPON etc.) 7.5 In the instant case the applicant proposes to import the Populated Printed Circuit Board for the manufacturing of Telecommunication equipment and more specifically for the purpose of manufacturing of GPON ONTs/OLTs which is aptly covered under 'Combination of one or more of Packet Optical Transport Product or Switch (POTP or POTS)' as per para above. 7.6 In a US Cross Ruling No. NY N024619, dated 24-3-2008 it was observed that:- the process of assembling the PCBAs and telecommunications chassis together is followed by the installation of proprietary software, calibration, configuration, and testing, it is only after these processes that the WDM system becomes functional; that the applicable sub-heading for t....
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.... their contention. No technical literature was submitted; in spite of the fact that the imports have been taking place over a period of time. Learned Commissioner (Appeals) has been upholding the contention of the appellants. In one instance Revenue has accepted the order of Commissioner (Appeals). We find that the Department has not drawn any samples and did not obtain technical opinion to support their claim that the impugned goods are complete machines or equipment capable of independent function themselves so as to merit classification under CTH 85176270. On the contrary, the respondents could demonstrate by technical literature; samples and the ratio of judgments cited above that the goods imported by them are Populated Circuit Boards (PCBs) used in PSS 1830 and therefore, the impugned goods are parts of PSS and as such merit classification CTH 85177010. We also find that the appellants have submitted US Customs Rulings on the classification of the impugned goods, though they are not binding on us, they would certainly have a persuasive effect more so in the absence of any evidence to the contrary. In view of the discussion as above, and considering the fact that Commissioner ....