TaxTMI 
TaxTMI 
2025 (1) TMI 858
X X X X Extracts X X X X
X X X X Extracts X X X X
....tured by this Court in order dated 12.09.2023 (passed in CUSAA 38/2023) 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, Beetal Teletech 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 Avaya International Sales Ltd. (China), Huawei International PTE Ltd. (Singapore), Radwin (Israel), 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 table, setting out ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 Transport Network (OTN) products, and IP....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d 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 Mr. Ranbir Bhandari, 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 28.11.2019, 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 the principles laid down in Commissioner of Customs (Import), Mumbai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d "and" used in the exclusion entry (iv) of Serial no. 13 should be interpreted disjunctively, thereby denying exemptions to products operating either on either MIMO technology or LTE standards. It was Revenue's case that the expression 'products' appearing after LTE has to be read with MIMO as well since the expression 'products' is a common factor for both MIMO and LTE. 13. However, the learned CESTAT, by way of the impugned order dated 30.10.2023, dismissed the Revenue's appeal and upheld the order of the Adjudicating Authority. The learned CESTAT observed that the word "and", as used in exclusion entry (iv) of Serial No. 13, is conjunctive and must be interpreted strictly to refer to products employing both MIMO and LTE technologies together. It noted that exemption notifications must be construed narrowly to avoid frustration of their intended purpose. The learned CESTAT further highlighted that similar exemptions had been granted for identical products under subsequent notifications and in proceedings involving other importers. The relevant extracts of the impugned order are as under: "17. A bare perusal of the exclusion clause (iv) under SI. No. 13 of notificatio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ition: And: Used to join two words, phrases, parts of sentences, or related statements together: Ann and Jim; Boys and Girls; Knives and Forks And/ or used to mean that either one of two things or both of them is possible: Many pupils have extra classes In the evenings and/or at weekends. Or: Used to connect different possibilities. is it Tuesday or Wednesday today?" 21. It is also seen that the word 'products' is not used after the words 'Multiple Input/Multiple Output (MIMO)'. Infect, 'and' is used after the words 'Multiple Input/Multiple Output (MIMO)'. It is seen that in entry (iii) of the same Serial No. 13 of notification, every technology is followed by the word 'products': "Cartier Ethernet Switch, Packet Transport Node (PTN) products, Multiprotocol Label Switching-transport Profile (MPLS-TP) products 22. Learned special counsel for the appellant contended that clause (iv) would effectively mean and cover two categories of products, namely, (i) Multiple Input/multiple Output (MIMO) products and (II) Long Term Evolution (LTE) products and that MIMO products and LTE products are products which have distinct id....
X X X X Extracts X X X X
X X X X Extracts X X X X
....both MIMO and LTE. This view finds support from the following decisions. * * * 28. This apart, what also needs to be noted is that India is a signatory to the Information Technology Agreement 18 dated 13.12.1996 by the World Trade Organization. The ITA requires each participant to eliminate and bind customs duties at zero for all products specified in the Agreement. India signed the Agreement on 01.07.1997. Pursuant to ITA, India introduced the notification. At the time of introduction, all goods falling under CTH 8517 were exempted from payment of duties. In 2014, on specified telecommunication products that were not covered under the ITA, the Government imposed customs duties by notification dated 11.07.2014. The Finance Minister's Budget Speech for the year 2014-15 and Tax Research Unit letter dated 10.07.2014 clarify that BCD on specified telecommunication products not covered under the ITA was being increased from NIL to 10%. As WAP is an Information Technology product and is specifically covered under the ITA as 'Network Equipment' in Attachment B, the intention was clearly not to exclude WAP imported by Ingram Micro. The Network Equipment as def....