TaxTMI 
TaxTMI 
2025 (3) TMI 393
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....version and transmission or regeneration of voice, images or other data, including switching and routing apparatus or otherwise? b) If the product is classifiable under CTI 85176290, then whether the product is eligible for concessional rate of duty under Sr. No. 20 of Notification No. 57/2017-Cus. Dated 30.06.2017 or otherwise? 2. Submission by the Applicant: 2.1 M/s Cisco Commerce India Private Limited ('the Applicant'), is a company is engaged in developing, importing and selling of networking hardware, software, telecommunications equipment and other high-technology services and products. 2.2 The company is engaged in regular import of goods into India since the year 2012. Amongst other products, the Company is importing transceivers (hereinafter referred to as 'Product under consideration'/'Product') from Cisco System Inc, USA. 2.3 The product under consideration is a Transceiver, which are of two categories, i.e., Optical transceivers and electrical transceivers. They are of different type modules, mentioned as follows: * Small Form-Factor Pluggable (SFP) transceivers modules (including SFP+ modules, XFP modules). * CPAK transceivers modules.....
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....with the telecommunication equipment such as routers, switches etc., whether manufactured by CISCO or any other Company. Nonetheless, transceivers are stand-alone in performing their functions, but are not stand-alone in the sense of operating independently. In other words, transceivers are capable of performing their specific functions independently and execute their tasks of transmitting, receiving and converting without external assistance and the fact they need to be inserted into a device, does not change their functional independence. Newton's Telecom Dictionary, 31st Expanded and Updated Edition, Harry Newton, 2018, defines transceiver as: "1. Any device that transmits and receives. In sending and receiving information, it often provides data packet collision detection as well. 2. In IEEE 802.3 networks, the attachment hardware connecting the controller interface to the transmission cable. The transceiver contains the carrier-sense logic, the transmit/receive logic, and the collision-detect logic. 3. A device to connect workstations to standard thick Ethernet-style (IEEE 802.3)." 2.7 There are two types of transceivers, optical and electrical, which perform essentiall....
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....ialled signals to tone signals. 3.4 Scope of Tariff Sub-heading 8517.62 can further be elaborated upon through reference to the WCO Opinions Compendium for Subheading 8517.62, which at item 4 lists: "Optical fiber converters, which convert the limited distance token-ring or other local area network (LAN) limited distance digital signals on copper wire cables into optical digital signals. These converters are used, for example, when an optical fiber cable is used in a token-ring LAN in order to extend it into a campus environment, or where the replacement of copper cable with optical fiber cable is important to reduce interference." 3.5 Based on a bare reading of the Tariff Heading and its relevant WCO Explanatory Notes, it appears that for a product to be classified under Tariff Heading 8517, it must meet the following criteria: 1. It must be an apparatus for the transmission or reception of voice, images, or other data. 2. Additionally, it could be an apparatus for communication in a wired or wireless network (such as a local or wide area network). 3.6 In the instant case, the product under consideration, combines the functions of a transmitter and a receiver, handling th....
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....used along with router, switches, or other telecom equipment: * Reliance Jio Infocom Ltd., (supra), and * IBM India Pvt Limited. 3.9 In its regard, it is submitted that the nature of functioning on a standalone basis has not been provided in the said judicial pronouncements. In other words, the moot point that merits consideration is what is exactly meant by ability to function on stand-alone basis. Additionally, it is essential to determine whether the capability of functioning on a standalone basis merit more importance than the WCO explanatory notes and GRIS for classification of a product under the Customs Tariff. 3.10 The Company submits that transceivers can undertake the functions relating to reception, conversion, and transmission of electrical or optical signals on stand-alone basis, albeit requiring electrical supply and devices to be plugged in to receive and transmit signals. The product under consideration is performing its designated function with the assistance of electricity and signal generating device. Usage of an external power supply or any other device for signal generation should not be a criterion for disqualification from the definition of machine. 3.....
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....ation was forwarded to the Office of the Commissioner of Customs, Chennai Customs for their comments on 15.10.2024. The Commissioner of Customs, ACC, Mumbai vide their letter dated 12.11.2024 has submitted as follows: * It is pertinent to mention here, that the primary function of the product under consideration (SFP Transceivers) is to enable communication between the networking devices, such as switches, routers and servers, over long distances using fibre optic technology. An SFP transceivers can work on different type of media network such as fibre optic cable or copper cable. The copper SFP module is mainly used for short distance data transmission. On other hand, an optical interface module, also known as an optical transceiver or optical module is a device that converts electrical signals into optical signals and vice versa. As the Nature and function remains the same, both the SPF Transceiver and Optical Transceivers should be treated as independent machine/ apparatus classifiable under CTI 85176290. The applicant has also submitted that the product under consideration performs the function of reception, transmission and conversion of data that it receives through switch....
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....erefore, it is evident that the Optical Transceivers, being capable of converting electrical signal to optical signal and vice versa are equipped to handle and be a part of Optical Transport Network and therefore would be termed as Optical Transport Equipment / Optical Transport Network Products. On the other hand, the Transceivers working on copper cable would be treated as "non OTE/OTN". c). In view of above, the SFP Transceivers working with a copper cable may be treated as Non OTE/OTN products and eligible for duty exemption under serial number 20 of the Notfn. No. 57/2017-Cus. dt. 30.06.2017, as amended. Whereas the SFP Transceivers working with a fiber optic cable, may be treated as OTE /OTN product and would not be eligible for duty exemption under serial number 20 of the Notfn. No. 57/2017- Cus. dt. 30.06.2017, as amended. 5. Details of Hearing: 5.1 A hearing was held on 13.11.2024 at 11.30 AM. Sh. Vijay S. Chauhan, Sh. Amit Ghadage, Sh. Rajesh Kumar, Sh. Dhanshekharan and Ms. Parul Vivek, representatives on behalf of the applicant appeared for the hearing through video conferencing. They contended that subject import goods are different models of Transceivers i.e. the ....
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....ted into various networking devices such as Ethernet switches, IP routers, modems, network interface card, etc. i.e., it allows connection to a wired network. Transceivers can operate in various types of networks, including LANS, WANs, and data center networks, where they interconnect servers, storage devices, and other network equipment. 6.5 I observe that Transceivers are devices that transmit and receive signals, commonly used in communication systems. The Transceivers can undertake the functions relating to reception, conversion, and transmission of electrical or optical signals on stand-alone basis. They come in two main types: optical transceivers and electrical transceivers. Optical transceivers use light signals for data transmission, employing fiber optic cables to achieve high-speed communication over long distances with minimal signal degradation. They are widely used in applications like data centers, telecommunications, and high-bandwidth networking due to their immunity to electromagnetic interference. On the other hand, electrical transceivers use electrical signals to transmit and receive data through traditional copper cables, such as Ethernet cables. These are co....
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.... (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525,8527 or 8528) have been divided into the following three categories: I. Telephone sets, including telephones for cellular networks or for other wireless networks: II. 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); III. Parts 6.9.2 As per HSN, the aforesaid category II has further been divided into the following groups: (A) Base station; (B) Entry-phone systems; (C) Videophones; (D) Apparatus for telegraphic communication other than facsimile machines of Heading 84.43; (E) Telephonic or Telegraphic Switching Apparatus; (F) Transmitting and receiving apparatus for radio-telephony and radio-telegraphy; and (G) Other communication apparatus. 6.9.3 As per Explanatory Notes, the aforesaid Group G relates to "other communication apparatus" and is reproduced below: "This group includes apparatus which allows for the connection to a wired or wireless communication network or the transmission or reception of speech or ....
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....bsp; 8517 6100 Base stations 8517 62 Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus 851769 Others The entry at the tariff item 8517 6100 is Base station, which is a central communication hub that manages signal communication between mobile devices and the network. A base station is much larger and serves as a communication hub that manages many transceivers and devices within its coverage area. Hence, the subject item is not classifiable here. The next double dash (--) entry is "Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus". It has been concluded in the preceding paragraphs that SFP Transceiver is an apparatus for converting data (conversion data from öptical to electrical and vice versa). Since, conversion is specifically covered under the second double dash entry, this item would be undisputedly classifiable under the subheading 8517 62. Further, the items covered under the subheading 8517 62 are given below: Subheading/ 'Tariff Item Dash Description 8517 ....
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....mmunication systems to receive and transmit data over fiber optic cables. An Optical Transceiver has electronic components to encodes/decode data into light pulses and then send them to the other end as electrical signals. They typically have an electrical interface on the side that connects to the inside of the system and an optical interface on the side that connects to the outside world through a fiber optic cable. Thus, based on the functioning of Optical SFP Transceivers, they are required to convert the electrical signals to optical signals and vice versa for interconnecting two networking equipment functioning with electrical signals optical signals, as the case may be. Therefore, it is evident that the Optical SFP Transceivers, being capable of converting electrical signal to optical signal and vice versa are equipped to handle and be a part of Optical Transport Network, and therefore would be termed as Optical Transport Equipment / Optical Transport Network products. Hence, the Optical SFP Transceiver falls under the exclusion category specified in Serial No. 20 of Notification No. 57/2017-Cus., dated 30.06.2017. Consequently, it is not eligible for the benefit of concessi....