TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 955
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.... as Domestic Tariff Area ("DTA") units. The Imported products "Ferrite Chip Beads for High Current Applications","Ghz Noise Suppression Chip Ferrite Bead - JENF243A_0021T-01", "Chip Ferrite Bead - JENF243A_0018AP-01", Ghz Noise Suppression Chip Ferrite Bead - JENF243A_0034P- 01", "Chip Ferrite Bead - JENF243A_0003AM-01" are used in the manufacture of telecommunication equipment in DTA Unit. 1.2. The Applicant specializes in complex high-technology products in market segments including Communications Networks, Automotive, Industrial & Semiconductor, Medical, Defense& Aerospace, Multimedia, Clean Tech and Computing & Storage. The Applicant offers complex PCBA, system integration, Build-to-Order (BTO), Configure-to-Order (CTO) and test services for a variety of products: from state-of-the-art telecommunications equipment to life saving medical equipment modules to blood glucose meters and Automotive products and also provides customers with engineering expertise for product design, technology and test system development. 1.3. The Applicant is importing different types of ferrite beads from different suppliers for different telecommunication projects namely "Ferrite Chip Beads fo....
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....ite beads). The primary technical differences between an inductor and a ferrite bead are enumerated hereunder :- * Ferrite beads are primarily employed for high-frequency noise suppression, acting as resistive elements that attenuate unwanted high-frequency signals by converting them into heat. This makes them particularly effective for cleaning power supply lines and signal lines of noise. In contrast, inductors are designed to store energy in a magnetic field, functioning as reactive components that oppose changes in current. Their utility lies in filtering, tuning, and energy storage applications, with a capability to work across a broader range of frequencies, making them suitable for smoothing out ripple in power supplies and participating in resonant circuits. * The construction and materials of ferrite beads and inductors highlight their differences. Ferrite beads are typically made from ferrite material-a ceramic-like compound composed of iron oxide mixed with other metals-and are often small and cylindrical, either placed directly over wires or integrated into printed circuit boards (PCBs). Ferrite beads imported by the applicant do not consist of any coi....
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....enuates high-frequency interference while allowing low- frequency signals to pass with minimal impedance. * Silver Electrode (Ag): Silver electrodes serve as the conductive terminals of the ferrite bead. They connect the bead to the circuit, ensuring efficient signal transmission through the bead. Silver is used due to its excellent electrical conductivity and reliable performance in high- frequency applications. High conductivity is essential for maintaining signal integrity. Silver ensures that the bead introduces minimal resistance to the circuit's desired signals, allowing efficient operation. Silver offers excellent solderability, which is important for creating reliable electrical connections during the manufacturing process. This property helps ensure strong adhesion and electrical connectivity when ferrite beads are soldered onto printed circuit boards (PCBs). Silver's excellent thermal conductivity aids in dissipating any heat generated within the ferrite bead, which can be particularly beneficial in high-frequency applications where heat generation may be a concern. * Copper Plating (Cu): Copper plating provides a conductive layer that facilitate....
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....ency of 1 GHz. Higher frequencies typically require higher impedance values for effective noise attenuation, and this value shows its performance at very high frequencies. 3. Rated Current (mA): ○ 2000: This is the maximum current (in milliamperes) that the chip bead can handle safely without degrading its performance. A higher rated current means the component is suitable for applications with substantial current flows. 4. DC Resistance (2 max.): ○ 0.07: This indicates the maximum resistance to direct current (DC) through the chip bead. Low DC resistance is desirable to minimize power loss and voltage drop in circuits, ensuring efficiency in DC applications. 1.8. Importance of ferrite beads in telecommunication apparatus - The applicant has provided below the importance of inductors in telecommunication apparatus * Electromagnetic Interference (EMI) Suppression: Telecommunication equipment such as wi-fi receivers, transmitters, up-link cards and data center switches often function in environments saturated with electronic devices, each potentially emitting electromagnetic interference (EMI) due to the operation of various....
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....rrite Beads: 2. The applicant has imported ferrite beads in the past under heading 8504 5090 as "other inductors." The applicant is of the considered view that the same may not be appropriate given the technical characteristics of the ferrite beads and accordingly prefers the present application. 2.1 The Applicant is of the view that classification of "Ferrite Chip Beads" under heading 8505 1110 as "Ferrite Cores" is not appropriate. The relevant extract of the tariff heading is enclosed hereunder :- 8505 ELECTRO -MAGNETS; PERMANENT MAGNETS AND ARTICLES INTENDED TO BECOME PERMANENT MAGNETS AFTER MAGNETISATION; ELECTRO-MAGNETIC OR PERMANENT MAGNET CHUCKS, CLAMPS AND SIMILAR HOLDING DEVICES; ELECTRO-MAGNETIC COUPLINGS, CLUTCHES AND BRAKES; ELECTRO-MAGNETIC LIFTING HEADS - Permanent magnets and articles intended to become permanent magnets after magneti-sation: 850511 -- Of metal : 85051110 -- Ferrite cores 85051190 --- Other 85051900 -- Other 85052000 - Electro-magnetic couplings, clutches and brakes 85059000 - Other, including parts 2.2 "ferrite chip beads" imported by the applicant can be classified under tariff item 8....
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....nd are designed to efficiently channel magnetic flux, which enhances the inductance of coils wound around them. They are optimized for low-frequency applications where inductance is needed. Ferrite cores are used in conjunction with wire windings to form inductors or transformers. Ferrite cores serve as magnetic mediums within inductors, transformers, and chokes. They concentrate magnetic flux, thereby enhancing the inductive properties of the components in which they are used. This concentration of flux is essential for efficient energy conversion Ferrite beads are designed with high resistivity and permeability to dampen high-frequency noise. They have a lossy magnetic characteristic that converts unwanted high-frequency signals into heat. Ferrite beads are particularly effective at filtering out high-frequency signals, typically in the MHz to GHz range. Impedance Ferrite cores present inductive impedance at their operating frequencies. This characteristic is critical for the performance of inductive components, where impedance is used to regulate current flow and store energy. Ferrite beads exhibit high impedance at high frequencies, effectively blocking and dissipat....
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..... The same can also be noted from the fact that it provides items only for three single dash (-) items: (i) first one i.e., "Telephone sets, including telephones for cellular networks or for other wireless networks" ; (ii) second one i.e., "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)", which are other than transmission or reception apparatus of heading 8443, 8525,8527 or 8528; and (iii) the third one i.e., "parts" of the above both categories of goods. The final finished products manufactured by the applicant are wi-fi receivers, wi-fi transmitters, up-link cards and data center switches classifiable under heading 8517. The finished goods manufactured by the applicant is an apparatus for transmission or reception of data in a wireless or wireless network (such as a local or wide area network). It is a communication apparatus that support the reception, conversion and transmission of signals and allow for the connection to a wired or wireless communication network. Therefore, finished goods of the applicant ar....
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....r out noise, the integrity of the signals transmitted and received by the device could be compromised, leading to poor performance with degraded signal integrity. The absence of ferrite beads might contribute to impedance mismatches within the circuit. This could cause signal reflections further degrading the device's performance. Ferrite beads are used to suppress high-frequency noise in electronic circuits. They act as passive low-pass filters, allowing DC and low-frequency signals to pass while attenuating higher frequency noise. In telecommunication devices, signals need to be clear and undistorted. External or internal high-frequency noise can interfere with signal integrity, leading to loss of data or communication errors. Ferrite beads can protect sensitive components from transient voltage spikes that might occur due to electromagnetic interference. Protecting components from these spikes increases the durability and reliability of telecommunication devices. By minimizing interference and protecting components, ferrite beads contribute to the longevity and consistent performance of the device. Consequently, it can be noted that ferrite beads a....
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....t case, the ferrite beads qualify as sub-parts meant to be mounted and installed on PCBA for use in wi-fi receivers, transmitters, data center switches and up-link cards and accordingly shall qualify as parts of wi-fi receivers, transmitters, data center switches and up-link cards. 2.9 Having concluded that the present item qualifies as 'parts', it is worthwhile to analyze whether the imported goods fall under the chapter heading 8517 as 'parts' of apparatus for transmission or reception. Section and Chapter Notes of Chapter 85 2.10 The Applicant would like to highlight that there is no specific exclusion relevant to the imported goods, i.e., ferrite beads in Note 1 of section XVI / Note 1 of chapter 85. 2.10.1 Note 2 of section XVI provide for classification of 'parts' of machines or articles falling under Chapters 84 & 85. Note 2 to Section XVI is reproduced hereunder for ease of reference :- (Section note XVI is enclosed as "Exhibit - 7") "2. Subject to Note 1 to this Section, Note 1 to Chapter 84 and Note 1 to Chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classifie....
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....ata center switches) in terms of note 2(b) to section XVI. Therefore, ferrite beads-warrants classification as 'parts' under heading 8517. More specifically, the imported product can be classified under 8517 7990 as "Parts - Others". 2.10.5 Reliance can be placed on the judgment pronounced by CESTAT Mumbai in the case of M/s. Ciena Communications India Pvt Ltd. vs. Principal Commissioner of Customs (Import), Mumbai 2024 (1) TMI 683 - CESTAT MUMBAI held that :- "It is obvious that as the impugned goods in this case relates to reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing function, for providing services of telecommunication networking equipment, the classification is feasible either under the 'second single dash' entries or classification under 'third single dash' entry as 'parts'. 2.10.6 Reliance can be further placed in the case of M/s. Sew Eurodrive India Private Limited vs. Commissioner of Customs Chennai II Commissionerate 2024 (1) TMI 465 - CESTAT CHENNAI held that :- "The claim of the importer needs to be accepted as the claim was based on the usage....
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....7 or 7318 and similar articles of other base metal, other than articles specially designed for use exclusively in implants in medical, surgical, dental or veterinary sciences (heading 9021); (b) springs and leaves for springs, of base metal, other than clock or watch springs (heading 9114); and (c) articles of headings 8301, 8302, 8308, 8310 and frames and mirrors, of base metal, of heading 8306. In Chapters 73 to 76 and 78 to 82 (but not in heading 7315) references to parts of goods do not include references to parts of general use as defined above. Subject to the preceding paragraph and to Note 1 to Chapter 83, the articles of Chapter 82 or 83 are excluded from Chapters 72 to 76 and 78 to 81. 2.11.3 The Applicant would like to submit that the present items imported would not get covered under the definition of parts of general use as the product does not fall under any of the "Articles of heading 7307, 7312, 7315, 7317 or 7318 and similar articles of other base metal" since the items are used specially designed for principal use for manufacturing wi-fi receivers, transmitters, up-link cards and data center switches. 2.12 Imported parts do not meri....
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.... M/s Samsung India Electronics Pvt. Ltd. vs. Principal Commissioner of Customs, Air cargo complex (Import), New Delhi - 2023 (12) TMI 1155 - CESTAT NEW DELHI where-in-it was categorically held that :- "A specific entry (parts of mobile phones) prevails over a general entry (articles of plastic) as per Rule 3(a) of Interpretation and the later entry (Chapter 85) in the tariff prevails over the earlier entry (Chapter 39) as per Rule 3(c). It is well settled legal principle that the Interpretative Rules must be applied sequentially. Rejection of the appellant's classification of the front cover, middle cover and back cover of mobile phones under CTH 85177090 in the impugned order and their re-classification under CTH 39209999 cannot be sustained and needs to be set aside" Further, in the case of M/s. Vivo Mobile India Pvt Ltd v. Principal Commissioner of Customs, New Delhi (2024) 20 Centax 393 (Tri .- Del) it was held that specific entry (parts of mobile phones) prevails over general entry (articles of plastic) and later entry (Chapter 85) prevails over earlier entry (Chapter 39). Hence, mobile covers were classifiable under Tariff Item 8517 70 90. 2.13.3 Considerin....
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....ainly for noise-suppression in the circuits, by acting as high- frequency impedance. 3.2 Comments regarding the classification of Ferrite bead: The item Ferrite Bead or Chip Ferrite Bead is neither specifically reflected among any of the entries of the First Schedule to the Customs Tariff Act, 1975 nor mentioned in HSN Explanatory Notes. However, based on the details provided by the applicant and data available on the websites of the suppliers, it is noticed that the ferrite beads under consideration are fabricated as chip ferrite beads, by adopting the coil structure inside them. Thus, in respect of functionality these are quite similar to the functioning of coil based inductors. As per the HSN Explanatory Notes to CTH 8504, it is noticed that "Inductors consisting essentially of a single coil of wire", "Inductors obtained in the form of individual components by a printing process" are mentioned therewith. Therefore, it is noticed that different types of inductors are included thereunder under CTH 8504. 3.3 In view of the above, it is noticed that the Inductors under consideration even though mainly used for the purpose of suppression of noise in circuits, by acting as a hig....
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....uct had become a specific part and have not suggested any specific heading for classification of the impugned products. We find that in the present appeal, now filed by the Revenue, it has been mentioned in the appeal memorandum that though the impugned products are not intended to become permanent magnet after magnetisation, this can be appropriately regarded as parts of electro magnets falling under Heading 85.05 in view of the Note 2. (a) of Section XVI of the Central Excise Tariff. The respondents, in their cross-objection has rightly submitted that the grounds of appeal, now taken up by the Revenue, are completely new, which were not raised in the show cause notice. It is settled law that in the appeal new case cannot be made out by the Revenue. Accordingly, we do not find any merit in the present appeal, which is rejected". Further, the applicant also relied upon the case of Transcore 1995 wherein it was ruled that "in this case, the appellants are the manufacturers of various types of coils, inductors and transformers for which, they have imported the different types of ferrite cores. In other words, the soft ferrites imported by the appellants are "circuit ferri....
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....No. 62/94. Accordingly, I set aside the order of the Lower Authority and allow the appeal with consequential relief to the appellant. and Circular no. 20/90-CX.4 dated 09.07.1990 in support of their claim". 4.1 Nobody appeared on behalf of the Department for hearing. Discussion and findings 5. I have considered all the materials placed before me in respect of the subject goods. I have gone through the submissions made by the applicant during the personal hearing and comments received from the concerned Commissionerate. I proceed to pronounce a ruling on the basis of information available on record as well as existing legal framework. 5.1 At the outset, I find that the issue raised in the question in the Form CAAR-1 is squarely covered under Section 28H(2) of the Customs Act, 1962, being a matter related to classification of goods under the provisions of this Act. 5.2 Before deciding the issue, let me deliberate on the legal framework prescribed in Customs Tariff Act, 1975, Chapter/ Section notes along with HSN explanatory notes. As per Rule 1 of GRI, the titles of Sections, Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classif....
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.... ARTICLES INTENDED TO BECOME PERMANENT MAGNETS AFTER MAGNETISATION; ELECTRO-MAGNETIC OR PERMANENT MAGNET CHUCKS, CLAMPS AND SIMILAR HOLDING DEVICES; ELECTRO-MAGNETIC COUPLINGS, CLUTCHES AND BRAKES; ELECTRO-MAGNETIC LIFTING HEADS - Permanent magnets and articles intended to become permanent magnets after magnetisation: 850511 -- Of metal : 85051110 -- Ferrite cores 85051190 --- Other 85051900 Other 85052000 - Electro-magnetic couplings, clutches and brakes 85059000 - Other, including parts 5.4.3 Based upon the literature provided by the applicant, technical specification and information available in public domain, I find that ferrite bead does not function as or would not qualify as an electromagnet for the following reasons :- * Ferrite beads do not consist of any coils of wire would around any soft iron cores. The ferrite beads imported by the applicant lack any current carrying coils. * The ferrite bead does not generate a magnetic field due to the presence of a current-carrying coil. It provides passive impedance based on its material properties and geometry i.e., the impedance created by the ferrite bead is f....
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....sting external magnetic field like than of a permanent magnet for attraction or repulsion. * The magnetic domains within ferrite beads are not aligned in a manner that would produce a net magnetic field. The random orientation of these domains is intentional to minimize unwanted magnetization that could interfere with electronic signals. Permanent magnets have their magnetic domains aligned during manufacturing processes, ensuring that they produce a net magnetic field that is stable and long-lasting. * Articles intended to become permanent magnets are often shaped as cubes, discs, or other forms that facilitate uniform magnetization. These shapes are chosen to optimize the magnetic field distribution once magnetized. The shapes of ferrite beads optimized for ease of integration into electronic designs on PCBAs of telecommunication equipment, focusing on compactness and efficient EMI suppression rather than the generation of a magnetic field. The primary function of ferrite beads is EMI suppression, acting as inductive and resistive elements in circuits. Their design is tailored to high-frequency impedance, not to become or remain magnetized. * While ferr....
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.... 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings; (b) other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517, and parts which are suitable for use solely or principally with the goods of heading 8524 are to be classified in heading 8529; (c) all other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8485 or 8548." 5.5.5 In terms of Section note 2(a), it is clearly brought out that 'parts' included in any of the headings of Chapter 84 & 85 are in all cases to be classified under the same heading. In the instant case, ferrite beads are not covered by any specific heading of Chapter 84 & 85 to warrant a straight-forw....
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....l equipment (GHTF Class C) *Except for implant/surgery/auto injector: Products that can be used for medical equipment of Class C of the international classification class GHTF and whose malfunction is considered to pose a relatively high risk to the human body. * Medical equipment (GHTF Class A and B): Products that can be used for medical equipment regulated by Class A and Class B of the international classification class GHTF and whose functions do not directly relate to the protection of human life and property. * Consumer equipment: Products that can be used in consumer equipment such as home appliances, audio/visual equipment, communication equipment, information equipment, office equipment, and household robotics, and whose functions are not directly related to the protection of human life and property. From the above, it is clear that chip ferrite beads can be used in various applications. It is not specifically or solely & principally made for the telecommunication devices, therefore classification of the ferrite beads under CTH 8517 as parts is not appropriate. 7. Classification of ferrite beads as inductor : Working principle of ferrite beads ....
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....as a high-frequency impedance, effectively blocking the passage of unwanted noise signals. They are strategically placed on power lines, signal lines, etc., to mitigate high- frequency noise. 7.6 Based on the models provided, it is understood from the websites of the suppliers Mag Layers and Murata ((https://pim.murata.com/en-us/pim/search/?productCategoryId=ferriteBeadInductortypefilter, https://article.murata.com/en- global/article/basics-of-noise-countermeasures-lesson-4 and https://www.maglayers.com/_english/01_product/02_02_list.php ) that the ferrite beads under reference are categorized under Multilayer Chip inductor and EMC products and further categorized as chip ferrite beads. These beads are ferrite bead inductors fabricated in the shape of chips that support surface mounting (SMD). 7.7 From the Murata website, it is noticed that 'chip ferrite beads' are typically noise- suppression components made by fabricating these ferrite bead inductors into chips. 7.8 Coil patterns are formed between the layers of the raw ferrite, and by a process of integration and firing, a 3-dimensional coil structure is produced. The diagram of the chip ferrite bead is shown be....
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....rs that the functionality of the chip ferrite beads under consideration is included in the terms of heading 8504. Thus, in view of Rule 1 of the General Rules for Interpretation of Customs Tariff of HSN (GIR), they appear rightly classifiable under CTH 8504. 8.1 From the Customs Tariff Act, 1975, the grouping of articles under CTH 8504 is as under: 8504 Electrical transformers, static converters (for example, rectifiers) and inductors 8504 10 Ballasts for discharge lamps or tubes: - Liquid dielectric transformers: 8504 40 Static converters: 8504 50 Other inductors: 8504 50 10 Choke Coils (Chokes) 8504 50 90 Other 8504 90 Parts: As per Explanatory Notes to heading 8504, which provide that Inductors consist essentially of a single coil of wire which, when inserted in an AC circuit, limits or prevents by its self- induction the flow of alternating current. These Inductors may range from small chokes employed in wireless circuits and instruments to large coils frequently mounted in concrete for use in power circuits (for instance, for limiting current flow in the event of a short circuit). Notably, inductors or inductances manufa....
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.... equipment's - Parts of DC power supply - Electric transformers, static converters, inductors, etc. - They are classifiable under sub- heading 8504.00 of Central Excise Tariff as specifically covered therein and not classifiable under Heading 85.48. 8.4.3 Further, I rely upon the decision of the Larger Bench of the Hon'ble Tribunal in the matter of Saurashtra Chemical, Porbandar Vs. Collector of Customs, [1986 (23) E.L.T. 283 (Tri. - LB)] had held that the tariffs must be interpreted in the light of relevant Section and Chapter Notes which are statutorily binding like the Headings themselves. Thus, the Section and Chapter Notes have an overriding force on the respective Headings. This Judgment was approved by the Hon'ble Supreme Court of India in the case of Saurashtra Chemicals Vs. Collector of Customs, [1997 (95) E.L.T. 455 (S.C.)]. 8.4.4 In the case of O. K. Play (India) Ltd. vs. C.C.E. Delhi III, 2005 (180) E.L.T. 300 (S.C.), a 3-member bench of the Hon'ble Supreme Court of India made the following observations: * (a) There cannot be a static parameter for correct classification. * (b) HSN along with the explanatory notes provide a safe guide....