TaxTMI 
TaxTMI 
2025 (1) TMI 859
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.... 2. The principal controversy in the present case was captured by this Court in order dated 09.05.2024, while framing the question of law, which is set out below: Whether the word "and" as appearing in CTI 8517 (iv) is to be read in a disjunctive manner and thus be viewed as referring to separate products? FACTUAL BACKGROUND 3. The facts, as discernible from the records, are that the respondent, M/s Redington (India) Limited [hereafter also referred to as 'the respondent'], is a distributor of Information Technology products in India. During the period July, 2014 to June, 2017, the respondent imported Wireless Access Points (WAPs) from various suppliers, including M/s. Cisco Systems International, M/s. Fortinet Singapore Private Limited, and others. These WAPs, which utilize Multiple Input/Multiple Output (MIMO) technology, were used for wireless communication within Local Area Networks (LANs) by connecting wireless-enabled devices like laptops, smartphones, and tablets to wired networks. 4. Under the Customs Tariff Act, 1975, these imported WAPs were classified under Customs Tariff Heading (CTH) 8517, and particularly Custom Tariff Item (CTI) 8517 62 90. A tabl....
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....09 91,00, 9009 92,00, 9009 93,00, 9009 99,00, 9010 41,00, 9010 42,00, 9010 49,00, 9013 80,10, 9013 90,10, 9026, 9027 20,00, 9027 30, 9027 50, 9027 80, 9030 40,00, 9030 82,00, 9031,41,00 5. All goods for the manufacture of goods covered by S.Nos. 1 to 4 above, provided that the importer follows the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996. [F.N0334/1/2005-TRU] 6. The aforesaid notification was amended by Notification No. 11/2014-Cus. dated 11.07.2014 [hereafter 'Notification No. 11/2014']. The relevant portion of Notification No. 24/2005, as amended by Notification No. 11/2014 [hereafter 'amended Notification No. 24/2005] pertaining to CTH 8517 is extracted below: Sr.No. Heading, sub-heading or tariff item Description x x x 13 8517 All goods, except the following :- (i) soft switches and Voice over Internet Protocol (VoiP) equipment, namely, VolP phones, media gateways, gateway controllers and session border controllers; (ii) optical transport equipments, combination of one or more of Packet Optical Transport Product or Switch (POTP or POTS), Optical Tra....
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....s. 17,18,03,287/-, invoke the extended limitation period under Section 28(4) of the Act, confiscate the goods under Section 111 (m) of the Act, and impose penalties under Sections 112, 114A, and 114AA of the Act. Similar notice was also issued to the respondent's director, Mr. E. H. Kasturi Rangan, proposing penalties for his alleged role in the claimed exemption. 11. However, the Additional Director General (Adjudication) [hereafter 'the Adjudicating Authority'], vide its Order-in-Original dated 29.11.2019, adjudicated the SCN in favor of the respondent. The Adjudicating Authority held that the WAPs imported by the respondent, which solely utilized the MIMO technology, were eligible for exemption under the amended Notification No. 24/2005. It observed that the language of the exclusion clause was clear and unambiguous, and the phrase "MIMO and LTE products" referred exclusively to products that used both the technologies together. The Adjudicating Authority further noted that treating the phrase as encompassing three categories of products - MIMO only, LTE only, and both MIMO and LTE - would amount to a distortion of the notification's language and intent, and would be against ....
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....cause notice. 11.7 I do not impose any penalty under Section 112 or 114AA of the Customs Act, 1962 on Shri E. H. Kasturi Rangan, Whole Time Director, M/s Redington India Ltd., Chennai. 2. In respect of charges answerable to the Principal Commissioner/ Commissioner of Customs Chennai-II Commissionerate, Sea Port, Customs House 60, Rajajisalai, Chennai-600001: 2.1. The Access Points imported by M/s Redington India Ltd are classifiable under 85176290 of the Customs Tariff. Since these Access Points are having MIMO technology but without LTE standard, the Basic Customs Duty (BCD) exemption claimed under Notification No. 24/2005-Cus dated 01.03.2005 as amended vide Notification No. 11/2014-Cus dated 11.07.2014 is allowed to them. 2.2 I do not hold impugned goods imported by them liable for confiscation under Section 111(m) of the Customs Act, 1962, during the period from 11.07.2014 to 30.06.2017, with a declared Assessable value of Rs.39,78,50,088/- through Sea Port Chennai vide Bills of entry detailed in Annexure-C to the show cause notice. Therefore, 1 do not confiscate the same. 2.3 The demand of differential Customs duty of Rs. 3,34,44,45....
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....ed from the scope of Serial No. 13. 17. 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 Beetal Teletech is that since the exclusion clause (iv) uses the conjunction 'and' its scope would be restricted to those products that have both MIMO and LTE. Thus, according to Reddington a product that has only MIMO technology would not be covered by the exclusion clause and, therefore, would not be excluded from the scope of Serial No. 13 (iv). 18. The submission advanced by learned counsel for the respondent deserves to be accepted. 19. It needs to be remembered that 'and' is a conjunctive and is used to connect and join. The dictionary meaning of 'and' is as follows. "The New International Webster's Comprehensive Dictionary of the English Language: And: Also; added to; as well as; a particle denoting addition, emphasis, or union, used as a connective between words, phrases, clauses, and sentences; shoes and ships and sealing wax... Or: Introducing an alternative: stop or go: r....
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....39; 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' twice. There is, therefore, no ambiguity and the expression 'Multiple Input/Multiple Output (MIMO) and Long Term Evolution (LTE) Products" denotes Multiply Input/Multiple Output (MIMO) products on the one hand and Long Term Evolution (LTE) products on the other. There is, therefore, no need to refer to the World Trade Organisation ITA. 22. Though it is correct that clause (iv) would effectively mean include two categories of products namely MIMO and LTE and that they have distinct identities, but it is not possible to accept the Contention advanced by learned special counsel for the Department that MIMO does not by itself mean anything unless it is followed by the expressions technology' or 'products' and, therefore....
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....poration 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 has been stated that the investigation by the DRI was not only against Reddington but few other importers of these goods also and the proceedings initiated against other importers was dropped but appeals have not been filed by the Department. 30. The aforesaid discussion leads to be inevitable conclusion that WAP imported by the appellant works on technology and does not support LTE standard. Beetal Teletech was, therefore, justified in claiming exemption from the whole of the customs duty under Serial No. 13(iv) of the notification. There is, therefore, no infirmity in the order dated 29.11.2019 passed by the Additional Director. 31. Such being the position, it would not be necessary to examine the other contentions raised by the learned counsel for the respondent, including the submission relating to the invocatio....