TaxTMI 
TaxTMI 
2025 (5) TMI 2217
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion of following models of Ferrite Beads, which are being imported by the Applicant since First Quarter of 2022-23 from China for suppressing electromagnetic interference, filtering out high frequency noise, etc. This product prevents interference with sensitive electrical/electronic circuits and improves overall system stability. These twenty-four specific products can be categorized as the ferrite beads, which have common functionality and features relevant for determining their appropriate classification: S.no Product Number Product description Product Catalogue link 1 MPZ1608S300ATDH5 FERRITE BEAD https://product.tdk.com/system/files/ dam/doc/product/emc/emc/beads/catalog/ beadsautomotive_power_m pz1608_en.pdf 2 MPZ1608S601ATD25 FERRITE-600OHM,0603 https://product.tdk.com/system/files/ dam/doc/product/emc/emc/beads/ catalog/beadsautomotive power_m pz1608_en.pdf 3 BLM15AG121SH1D FERRITE-120OHM,25%,SM https://www.murata.com/products/ productdata/ 8796743696414/QNFA9103.pdf?1658287813000 4 BLM15AG221SH1D FERRITE-220OHM,25%,SM https://www.murata.com/products/ productdata/ 8796743696414/QNFA9103.pdf?1658287813000 5....
X X X X Extracts X X X X
X X X X Extracts X X X X
....duct/emc/emc/ beads/catalog/beads_automotive_signal_m mz2012_en.pdf 21 BLM18AG102SH1D ELECTRONIC FERRITE-1000,0603 https://www.murata.com/products/ productdata/ 8796737273886/ QNFA9101.pdf?1698377420000 22 MPZ2012S1 02ATD25 FERRITE-1000OHM,25%,SM https://product.tdk.com/system/files/ dam/doc/product/emc/emc/ beads/catalog/beads_automotive_power_m pz2012_en.pdf 23 BLM15BD182SH1D FERRITE-1800OHM,25%,SM https://www.murata.com/products/ productdata/ 87967 43696414/ QNFA9103.pdf?1658287813000 24 MMZ1608S121ATD08 FERRITE-SM,RF,0603 https://product.tdk.com/system/files/ dam/doc/ product/emc/emc/beads/catalog/ beads_automotive_signal_mmz1608_en.pdf 1.2 The applicant submitted that even though detailed description and product numbers are different, all the twenty-four goods answer to the product name of "ferrite beads". All the surface-mount ferrite beads are differentiated solely by their impedance, measured in ohms, and a tolerance level of up to 25%. Therefore, a single application for pronouncing ruling on their appropriate classification has been submitted, placing reliance on the ruling issued by Hon'ble CAAR authority of New Delh....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... an insulated wire coiled into a coil, often around a magnetic core. Its operation is based on the principle of self-induction, an electrical phenomenon where a changing current induces a voltage within the coil itself. Benefits of Using Ferrite Beads in Automotive Electronics: 1.6 The benefit of using ferrite beads in automobile electronics are as under * Improved Electromagnetic Compatibility (EMC): Ferrite beads help to reduce electromagnetic interference (EMI) and radio frequency interference (RFI), ensuring compliance with regulatory standards and preventing disruptions to other electronic systems. * Enhanced Signal Integrity: By filtering out high-frequency noise, ferrite beads contribute to better signal quality and reliability, especially in high-speed digital circuits. * Reduced Power Supply Noise: Clean power supply lines are essential for the proper functioning of electronic components. Ferrite beads help to maintain stable voltage levels and reduce noise-induced errors. * Increased System Reliability: By mitigating the effects of electromagnetic interference and improving signal integrity, ferrite beads help to enhance the overa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and inductors - Transistors, other than photosensitive transistors: --Others - Other inductors - - Others Applicable tariff rate Free 7.5% 1.9 It is highlighted that presently there is a difference of 7.5% in the effective rate of applicable custom duty between the two competing entries mentioned above. Therefore, the Applicant has approached the Authority to seek clarity and certainty regarding appropriate classification of the Ferrite beads, which is intended for use in automotive ECUs, powertrains, body controls, and car multimedia systems, in the light of difference in prevalent classification practice, with consequential duty implications. The Applicant as per the application agreed to bear & pay the said differential duty as per the provisions of the Customs Act, in case the Authority rules the classification of ferrite beads to be under sub-heading 8504 50 90. Statement containing the Applicants' interpretation of law and facts in respect of the aforesaid question(s) A. Classification of the product under consideration under CTH 8541: 1.10 The heading of Chapter 85 covers semiconductor devices, photosensitive semiconducto....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hange in resistance and thus amplification results. Transistors include: (1) Bipolar transistors, which are three-terminal devices consisting of two diode type junctions, and whose transistor action depends on both positive and negative charge carriers (hence, bipolar). (2) Field effect transistors (also known as metal oxide semiconductors (MOS)), which may or may not have a junction, but which depend on the induced depletion (or enhancement) of available charge carriers between two of the terminals. The transistor action in a field effect transistor employs only one type of charge carrier (hence, unipolar). A parasitic body diode, which is produced in a MOS type transistor (also known as MOSFET), may operate as a freewheeling diode during inductive load switching. MOSFET which have four terminals are known as tetrodes. (3) Insulated Gate Bipolar Transistors (IGBT), which are three-terminal devices consisting of a gate terminal and two load terminals (emitter and collector). By applying appropriate voltages across the gate and emitter terminals, current in one direction can be controlled, i.e., turned on and turned off. IGBT chips may be incorpor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....-frequency noise and suppressing electromagnetic interference (EMI). While on the other hand, transistors are active components that are used for amplification, switching, and signal modulation. Therefore, we are of the view that the product under consideration cannot be considered as transistors, therefore, would be outside the purview of coverage under CTH 8541. Reasons for adopting the classification under tariff entry 8541 29 00 for past imports of ferrite beads: 1.16 It is pertinent to highlight that the applicant has been classifying ferrite beads under tariff entry 8541 29 00 which provides for other: transistor (i.e., semiconductor devices). It is submitted that it is possible to make an argument for their classification under tariff entry 8541 29 00 as such, based on certain properties and behaviours as specified hereunder: Sr No. Particulars Ferrite bead properties Semiconductor based Transistor properties a. Electric conductivity Ferrite beads exhibit a unique property of increasing resistance as the frequency of the applied signal increases This characteristic is similar to how semiconductors can have varying conductivity based on applied v....
X X X X Extracts X X X X
X X X X Extracts X X X X
....imits or prevents by its self-induction the flow of the AC. These inductors may vary from small chokes used in wireless circuits, instruments, etc., to large coils often mounted in concrete, used in power circuits for limiting the flow of current in the event of a short circuit. The relevant excerpt from the general notes is reproduced below: "III- INDUCTORS These consist essentially of a single coil of wire which, inserted in an AC circuit, limits or prevents by its self-induction the flow of the AC. They vary from small chokes used in wireless circuits, instruments, etc., to large coils often mounted in concrete, used in power circuits (e.g., for limiting the flow of current in the event of a short circuit). " 1.22 A perusal of the above explanatory notes suggests that CTSH 8504.50 covers different type of inductors that are used to limit or prevent the flow of the Alternating Current (AC). The Applicant uses the product under consideration for noise filtering/suppression and for limiting the flow of AC current for use in automotive ECUs, powertrains, body controls, and car multimedia systems etc. 1.23 As enumerated in the above para, the product in questi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t adjudicated on whether the classification concluded by Hon'ble Customs Authority of Advance Ruling (CAAR) was erroneous or not as the goods imported under the said CTHs were at the time detained at the port of import. It was held that the Order passed by Hon'ble CAAR. was valid as only summons had been issued and no pre-consultation notice or show cause notice had been issued by DRI or any other Authority. Hence, it would be erroneous to hold that the question of classification was pending before any Custom officer, Appellate Tribunal, or any Court. For ease of reference, the relevant extract of the case has been provided below: "The proviso to Sub-Section (2) of 28-I of the Customs Act proscribes the CAAR from allowing any application filed for advance ruling, where question raised in the application is pending in the applicant's case before "any officer of customs, the Appellate Tribunal or any Court" or if the said question has already been decided by the Appellate Tribunal or any Court. In the present case, DRI had not issued any pre-consultation notice or show cause notice which would indicate that the question regarding classification of any goods was p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... section 18 of the Act ibid; the matter is pending before the Special Valuation Branch of the Customs Commissioner for the purpose of valuation of the goods in question; or the proper officer has held the pre-notice consultation with the applicant in terms of the proviso of sub-section (a) of Section 28(1) of the Customs Act, 1962. Therefore, in cases, such as the extant case, wherein an officer of customs is engaged in an investigation that may result in formulation of a question that would be posed before another competent officer would not qualify as "pending before an officer 13.7 In view of the above, I reject the contention of the Principal Commissioner of Customs (Preventive), New Delhi and allow the application for advance ruling in terms of Section 28-1 (2) of the Customs Act" 1.30 Hence, in the present context, it is the Applicant's submission that the questions raised by it in the present application are not pending before any officer of Customs, Appellate Tribunal or any Court of Law. 1.31 In light of the facts, relevant legal provisions and submissions made in the above paragraphs, the applicant prayed that : * Confirm that the Product under....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ies to pass. * Ferrite beads act 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 the high frequency noise. * Ferrite Beads are essential components in many electronic devices, contributing to efficient operation and enhanced performance by mitigating noise and improving inductive characteristics. * The benefits of using ferrite beads in automobile electronics are improved electromagnetic compatibility, enhance signal integrity, reduced power supply noise and increased system reliability. * The ferrite beads under consideration are going to be used in electronics items for automobiles such as ECUs, powertrains, body control modules, car multimedia systems, etc. 2.3. As available in the website of the supplier: * Based on the models provided, it is understood from the websites of murata and tdk that the ferrite beads under reference are categorised under EMC products and further categorised as chip ferrite beads. These beads are ferrite bead inductors fabricated in the shape of chips which support surface mounting (SMD....
X X X X Extracts X X X X
X X X X Extracts X X X X
....C current, they can be considered as other inductors falling under CTI 8504 5090. 2.5 Comments on classification: 2.5.1 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. From the HSN Explanatory Notes to CTH 8504, it is noticed that Inductors consist essentially of a single coil of wire, and the Inductors obtained in the form of individual components by a printing process are classified under the heading 8504. The relevant portion of HSN Explanatory Notes to CTH 8504, is extracted below: (III) INDUCTORS These consist essentially of a single coil of wire which, inserted in an AC circuit, limits or prevents by its self-induction the flow of the AC. They vary from small chokes used in w....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 4. After finding that the application is valid in terms of the provisions of the Customs Act, 1962 and the CAAR Regulations, 2021, having gone through CAAR-1 application, reply from jurisdictional Commissionerate, oral submissions made during the hearing and the legal framework governing the classification of proposed imports in the form of relevant Chapter notes, Section notes and HSN Explanatory Notes to the respective Chapter headings. I proceed to deliberate upon the issue on the basis of information available on record. 4.1 The issue involved is whether the impugned goods, namely, Ferrite Beads can merit classification under tariff item 8504 50 90 or 8541 29 00 of the Customs Tariff Act, 1975. In order to decide the same, it is imperative to examine both competing tariff items which covers following :- HS Code Level Item Description 8504 ELECTRICAL TRANSFORMERS, STATIC CONVERTERS (FOR EXAMPLE, RECTIFIERS) AND INDUCTORS 8504 10 - Ballasts for discharge lamps or tubes: 8504 10 10 --- Conventional type 8504 10 20 --- For compact fluorescent lamps 8504 10 90 --- Other - Liquid dielectric transformers....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels; light-emitting diodes (LED) : 8541 41 00 -- Light-emitting diodes (LED) 8541 42 00 -- Photovoltaic cells not assembled in modules or made up into panels 8541 43 00 -- Photovoltaic cells assembled in modules or made up into panels 8541 49 00 -- Other - Other semiconductor devices: 8541 51 00 -- Semiconductor-based transducers 8541 59 00 -- Other 8541 60 00 Mounted piezo-electric crystals 8541 90 00 Parts 4.2 The relevant explanatory note to tariff heading 8504 are reproduced below :- "(I) ELECTRICAL TRANSFORMERS ................................. (II) ELECTRICAL STATIC CONVERTERS ................................. (III) INDUCTORS These consist essentially of a single coil of wire which, inserted in an AC circuit, limits or prevents by its self-induction the flow of the AC. They vary from small chokes used in wireless circuits, instruments, etc., to large coils often mounted in concrete, used in power ci....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f, containing one or more monolithic, hybrid, multi-chip or multi-component integrated circuits as defined in Note 12 (b) (iv) (3) to this Chapter (heading 85.42). The heading also excludes: (a) Chemical elements (for example, silicon and selenium) doped for use in electronics, in forms unworked as drawn, or in the form of cylinders or rods (Chapter 28), when cut in the form of discs, wafers or similar forms (heading 38.18). (b) Chemical compounds such as cadmium selenide and sulphide, indium arsenide, etc., containing certain additives (e.g., germanium, iodine) generally in a proportion of a few per cent, with a view to their use in electronics, whether in the form of cylinders, rods, etc., or cut into discs, wafers or similar forms (heading 38.18). (c) Crystals doped for use in electronics, in the form of discs, wafers, or similar forms, polished or not, whether or not coated with a uniform epitaxial layer, provided they have not been selectively doped or diffused to create discrete regions (heading 38.18). (d) Electronic integrated circuits (heading 85.42). (e) Micro-assemblies of the moulded module, micromodule or similar ty....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ating electromagnetic interference (EMI) and radio frequency interference (RFI) in electronic circuitry. The technical characteristics of the subject goods are noted as follows: (i) The components feature a two-terminal, surface-mountable design incorporating a coiled conductor wound around a ferrite core; (ii) Their operational principle relies on self-induction, generating impedance to attenuate high-frequency noise while permitting the passage of lower frequency signals; (iii) They demonstrate high magnetic permeability characteristics, enabling energy storage within the induced magnetic field during current flow. 4.7 I also note that the application of these goods is primarily observed in automotive electronic systems, including but not limited to: (i) Electronic Control Units (ECUs), where they serve to stabilize power and signal transmission for engine management and safety systems; (ii) Powertrain systems, contributing to noise reduction in fuel injection mechanisms, ignition systems, and electric motor drives; (iii) Body control modules, enhancing operational reliability in lighting, window regulation, and locking mec....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 4.9.2 In the Commissioner of C.Ex. vs Dhananjay Industrial Engineers [2007(208) E.L.T.(504)] case, the court further ruled that the power supply equipments - 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. 4.10 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.)]. 4.11 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: ....