2025 (11) TMI 793

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....hority, relying on CBIC Circular No. 08/2023, held the goods to be "Optical Transport Equipment (OTE)" akin to OTN products, reassessed the goods under CTH 85176290 with BCD @20%, and denied concessional rate of duty. The Commissioner (Appeals) upheld the order. Hence, this appeal before the Hon'ble CESTAT. 2. The Ld Advocate and the Ld Consultant, submit that the issue is as to whether Optical Line Protection (OLP) equipment imported by the appellant qualifies as switching apparatus eligible for concessional duty under Notification No. 57/2017-Cus? 3. Their main submissions are as under: 3.1 Classification not disputed * Department has accepted classification under CTH 85176290 ("Other apparatus for transmission/reception including switching and routing apparatus"). * Only dispute is eligibility of exemption under Notification No. 57/2017-Cus. 3.2 Nature of Goods - Pure Switching Device * The goods are Optical Switch Units used only for automatic protection switching between primary and standby fiber lines. * They do not perform: o Transmission of data, o Multiplexing/de-multiplexing, o Routing, or ....

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....ntry No.3369670 dated 7.5.2024,is guided by these Regulations read with the cited Notification dated 29.01.2019 and the Board Circular dated 13.03.2023. He relies on the detailed findings of the Adjudicating authority, wherein the product catalogue of the overseas exporter has been considered and the relevant portion of the cited Notification and Board Circular has been applied to deny the benefit of the concessional BCD exemption. He also relies on the detailed findings of the Commissioner (Appeals), wherein he has concluded that the Adjudicating authority is correct in coming to the conclusion about the product's description to deny the exemption claimed by the appellant. He submits that the Optical Switch Unit imported by the appellant acts as a stopgap equipment, switching over from one mode of power to another within 50 microseconds. Thus, the presence of this switch is essential to carry on the overall functioning of data transmission, multiplexing, routing, regeneration, or any networking function, without any interruption. Therefore, the product would necessarily fall under Sl No.20 (b), (c) or (d) of the Notification No.02/2019 Cus dated 29.01.2019. The Board Circular has ....

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....avelength Division Multiplexer (DWDM); iii. Coarse Wavelength Division Multiplexer (CWDM); iv. Elements of (i), (ii) or (iii) above: ROADM, Booster Amplifiers, Pre-Amplifiers, Inline Amplifiers, Raman Amplifiers, Mux- demux, Transponders, Muxponders, OADM and Regenerators, Optical Power Monitoring and Optical Line Protection equipment. Annexure - 2 B&D Optical Transport Equipment & Optical Transport Network (OTN) Products in item (b) & (d) of notification TEB001 OTE-ROADM TEB002 OTE-Booster Amplifiers TEB003 OTE-Pre-Amplifiers TEB004 OTE-Inline Amplifiers TEB005 OTE-Mux-Demux TEB006 OTE-Transponders TEB007 OTE-Muxponders TEB008 OTE-Raman Amplifiers TEB009 OTE-OADM TEB010 OTE-Regenerators TEB011 OTE-Optical Power Monitoring TEB012 OTE-Optical Line Protection TEB999 OTE-Others C Combination of one or more of Packet Optical Transport Product or Switch (POTP or POTS) in item (c) of notification (C1) Optical Line Terminal TEC101 OLT-GPON TEC102 OLT-EPON TEC....

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....r / data transmission OLPB, or Optical Line Protection Board, is a device used in power and data trans mission systems to ensure uninterrupted service by automatically detecting and recovering from faults at the physical layer (Layer 1). It safeguards data transmission by quickly switching traffic to backup paths when failures occur, such as fiber cuts, amplifier malfunctions, or transceiver issues. OLPB plays a crucial role in mi nimizing downtime, maintaining service continuity, and enhancing overall network reliability. (Source : glsun-int.com) (Emphasis supplied) A harmonious reading of the above detailed description of OSP clarifies that it pertains to data transmission, if the Switch is part of OSP then it would be part of other equipment designed to support the transmission of data over long distances. The effectiveness of an OSP line is fundamental in ensuring high-quality communication and connectivity, particularly in remote locations. The Switch would be an essential part for this data transmission work [Emphasis and conclusion ours] In respect of OLPB (Optical Line Protection Board), the protection is as important as the actual data tran....

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....ifies a control plane that enables the equipment to facilitate fast and efficient configuration of connections within a transport network layer, supporting switched as well as soft permanent connections, reconfigure or modify the connections that have already been set up and perform a restoration function. 12.15 ASON Implementation Guidelines ASON is basically a software tool which is implemented either in OTN switch or in optical switch i.e., ROADM. In OTN ASON switching takes place within 50 msec. and restoration within 10 sec. On the other hand, in Optical ASON switching takes place within 50 msec but restoration takes a few seconds. Therefore, from the networking point of view, it is effective to implement OTN ASON for long haul applications and Optical ASON for Metro applications. 25.5 Network Protection: For the various topologies, namely Point to Point topology, Linear Add- Drop topology and Two fibre DWDM ring, traffic shall be protected at client layer by using 1+1 Optical Sub-Network Connection protection. Additionally, for point to point topology, in conditions where the traffic only needs to be protected against the fibre breaks, the ....

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....rovided that ROADM would be taken as part of OTN. Again as per Annexure -2 of the Circular, OTN consists of OTE-ROADM . We have already seen clarification given by the Generic Requirement details given by Telecommunication Engg Centre. The Para 12. 15 ASON Implementation Guidelines - gives the following clarification : ASON is basically a software tool which is implemented either in OTN switch or in optical switch i.e., ROADM. 17. They have specified that the Optical Switch is ROADM. Therefore, even on this count, the Optical Switch Unit clearly falls under the exclusion clause of the Notification, when read with the Board Circular Annexure -1, Annexure-2 and the clarifications of Telecommunication Engg Centre. 18. The case law of Cisco cited by the appellant is on a different issue and hence is distinguishable and we find the same not to be applicable to the facts of the present case. 19.. Even as we have come to our independent conclusion, based on the documents on record, we have also gone through the detailed Order in Assessment dated 30.05.2024, passed by the Adjudicating authority, wherein he has reproduced the Product Catalogue of the overseas exporter Acce....