TaxTMI 
TaxTMI 
TaxTMI 
2025 (1) TMI 1762
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....ceiver Upper Antenna Subassembly" ('product'), which shall be exported by the Applicant to the various importers based in India. I. Overview of the Receiver Upper Antenna Subassembly exported by the Applicant to India 1.2 The Receiver Upper Antenna Subassembly is the radio frequency subassembly of a mobile phone which enables the communication of the mobile phone with other networks. The housing of the Receiver Upper Antenna Subassembly comprises of the following components - a. Upper Antenna module, and b. Receiver module. 1.3 Upper Antenna Module - The Upper Antenna of the mobile phone is a key component that supports a range of wireless communications, contributing to the phone's overall functionality and performance. The Upper Antenna handles the reception of radio frequency (RF) signals from cell towers and the transmission of signals back to the network. Therefore, it is responsible for maintaining connectivity with the mobile network for calls, texts, and data. This antenna is also responsible for receiving and transmitting Wi-Fi signals, thereby helping connect to wireless networks for internet access. Further, it also facilitates Bluetooth connec....
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....ith other components of the mobile phone, i.e., the Receiver Upper Antenna Subassembly becomes operational only after the complete mobile phone has been manufactured. II. The Applicant qualifies as an 'applicant' under Section 28E(c) of the Customs Act, 1962 ('Customs Act') 1.9 Section 28E(c) of the Customs Act reads as under: "(c). "applicant" means any person - i. holding a valid Importer-exporter Code Number granted under section 7 of the Foreign Trade (Development and Regulation) Act, 1992; or ii. exporting any goods to India; or iii. with a justifiable cause to the satisfaction of the Authority, who makes an application for advance ruling under section 28H;" 1.10 As discussed earlier, the Applicant will be exporting the inputs and parts of mobile phones to various importers in India. Thus, the Applicant is rightly covered under the definition of 'applicant' as provided under Section 28E(c)(ii) of the Customs Act for making this application. III. Question raised in the application for advance ruling by the Applicant squarely falls within the ambit of Section 28H(2)(a) of the Customs Act 1.11 Section 28H of the....
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....rocedure on receipt of application. - (1) (2) The Authority may, after examining the application and the records called for, by order, either allow or reject the application: Provided that the Authority shall not allow the application where the question raised in the application is - a. already pending in the applicant's case before any officer of customs, the Appellate Tribunal or any Court, b. the same as in a matter already decided by the Appellate Tribunal or any Court." 1.15 The Applicant submits that questions raised in the application are not already pending before any officer of Customs, the Appellate Tribunal or any Court, to the best of our knowledge. Further, the questions raised in the present case, have not already been decided by the Appellate Tribunal or any court in the Applicant's case. 1.16 Accordingly, the present application should not be considered as pending before any Court as neither the show cause notice has been issued to the Applicant nor the bill of entries has been provisionally assessed. Thus, relying on the above the facts of the current case, Applicant submits that in its case, the application shall ....
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....nd ambit of the respective Sections and Chapters. These Notes have been given statutory backing and have been incorporated at the beginning of each Section / Chapter. For ready reference, Rule 1 is extracted herein below: "Classification of goods in this Schedule shall be governed by the following principles: 1. The titles of Sections, Chapters and Sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions ..." 1.22 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 (....
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.... "Where in column (2) of this Schedule, the description of an article or group of articles under a heading is preceded by "-", the said article or group of articles shall be taken to be a sub-classification of the article or group of articles covered by the said heading. Where, however, the description of an article or group of articles is preceded by " -", the said article or group of articles shall be taken to be a sub-classification of the immediately preceding description of the article or group of articles which has "-". Where the description of an article or group of articles is preceded by " --- " or " ---- ", the said article or group of articles shall be taken to be a sub-classification of the immediately preceding description of the article or group of articles which has "-" or " - ". ['Where the description of an article or group of articles is preceded by "- - - - ", 'in addition to being a sub-classification of "-" or "- - ", the said article or group of articles may also be taken to be a sub-classification of the immediately preceding description of the article or group of articles which has "- - - ".';]" 1.28 Thus, classification of a product under....
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....ratus for 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) - Parts 1.32 Upon perusal of the above entries, there are two relevant single dash entries wherein the product may be classified, viz., - Other apparatus for 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) - Parts 1.33 Accordingly, we now proceed to analyze the relevant single dash entry under CTH 8517 wherein the Receiver Upper Antenna Subassembly can be classified. In this regard, the Applicant humbly submits that the Receiver Upper Antenna Subassembly cannot qualify as "other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network". Therefore, the Receiver Upper Antenna Subassembly is to merit classification as 'parts'. To support its understanding above, the Applicant makes the following submissions. A. The Receiver Upper Antenna Subassembly is not an "apparatus" ....
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....n and reception of data". B. The Receiver Upper Antenna Subassembly in its as imported condition cannot carry out reception and transmission of information. 1.40 Further, even if the Receiver Upper Antenna Subassembly is considered to be an "apparatus" since the same in its as imported condition is unable to carry out transmission and reception of data, the same cannot be covered under the single dash entry of "apparatus for transmission and reception of data". 1.41 To substantiate this stand, the Applicant submits that it is a settled principle of classification that the goods must be assessed in the form and condition in which they are imported. The subsequent operations carried out onto the goods is not relevant for the purpose of customs assessment. In this regard, reliance is placed on Vizag Shipping and Metal Processors vs. CC, [2005 (189) E.L.T. 40], wherein it was held that imported goods are to be assessed in the form in which importation takes place. The relevant extract of the judgment is as follows: "6 ... In our view the imported goods should be assessed in the form by which the importation takes place. What happens to the goods afterwards, may not be....
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.... incapable of carrying out transmission and reception of data, the same were more appropriately classifiable under CTH 8542 as monolithic IC and not under CTSH 8517 62 as "apparatus for transmission and reception of data". 1.45 Similarly, since in the present case, the Receiver Upper Antenna Subassembly, once assembled in the mobile phone is responsible for transmission and reception of information, this judgment is squarely applicable in this case, to the extent of classification of the product as an "apparatus for transmission and reception of data". Applying the ratio of the aforementioned judgment in the present case, since the Receiver Upper Antenna Subassembly also is a not functional on a stand-alone basis and is incapable of carrying out transmission and reception of data in its as imported condition, it is also excluded from the purview of single dash entry covering "apparatus for transmission and reception of data". C. The Receiver Upper Antenna Subassembly qualifies as a 'part' of mobile phone 1.46 Considering that the Receiver Upper Antenna Subassembly is a component which is solely designed for use in mobile phones, the most relevant single dash entry under CT....
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....s included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8485, 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. ^2[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." 1.52 In the instant case, since the Receiver Upper Antenna Subassembly is not being specifically covered under any heading, classification of the product shall not be done as per Section Note 2(a). ....
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....r components of the mobile phone, i.e., the Receiver Upper Antenna Subassembly becomes operational only after the complete mobile phone has been manufactured. To this extent, it does not qualify both the conditions of the twin test, and hence Receiver Upper Antenna Subassembly shall not merit classification under the separate heading and shall merit classification only as part of the mobile phone. Accordingly, the product will be covered within the single dash entry of "parts" under CTH 8517. Classification at eight-digit level 1.57 The single dash entry of "parts" under CTH 8517 is divided into the following entries at eight-digit level. 8517 71 00 -- Aerials and aerial reflectors of all kinds; parts suitable for use there with 8517 79 -- Other: 8517 79 10 --- Populated, loaded or stuffed printed circuit boards 8517 79 90 --- Other 1.58 As mentioned above, CTH 8517 71 00 covers "Aerials and aerial reflectors of all kinds". The term "aerial" is also known as "antenna" in common parlance. In the present case, the product under consideration, i.e., Receiver Upper Antenna Subassembly comprises of two components, receiver and Upper Antenna. ....
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.... (4) (5) 6J 8517 79 90 All goods for use in manufacture of cellular mobile phone 10% 1 1.62 Thus, by virtue of Sr. No. 6J, BCD at the rate of 10% is applicable for all goods for use in manufacture of cellular mobile phone" which are covered under CTH 8517 79 90. 1.63 In view of the above, considering that the Receiver Upper Antenna Subassembly which is to be exported by the Applicant is classifiable under CTH 8517 79 90 and is an essential part of mobile phone, as discussed above, the Applicant submits that the benefit of concessional rate of duty under Sr. No. 6J should be available at the time the import of Receiver Upper Antenna Subassembly, subject to compliance with IGCR Rules, 2022. 1.64 Therefore, the Applicant humbly submits that the Hon'ble Authority may kindly issue the advance ruling as prayed at an early date. 1.65 In the light of the above, a ruling is sought from the Hon'ble CAAR as follows: A. The Receiver Upper Antenna Subassembly to be exported by the Applicant to India is correctly classifiable under CTH 8517 79 90 of the First Schedule of the Customs Tariff at the time of import; and B. The Receiver Upper Antenna S....
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....in Logic Board (MLB) and connected by a flexible printed circuit board assembly. Therefore, it can be said that the Receiver Upper Antenna Subassembly carries out varied functions, such as transmission and reception of radio frequency signals to enable communication function (upper antenna module); receiving and converting radio frequency signals into electrical signals which are then processed by the phone's internal system (Receiver Module). 2.8 From the submissions given by the importer, the item "Receiver Upper Antenna Subassembly" ('product)" has varied components with different/dedicated functions. As such, based on its components and functions, the item has assumed the characteristic of a part of a Cell phone. To be classified under a specific heading or tariff item, the item as a whole does not have a singular function, but has multiple functions. Hence, the item doesn't have any specific entry under Chapter 84 or 85. Furthermore, these are specifically manufactured to work with a particular model number of cellular mobile phone and not with any other model of cellular mobile phone manufactured by the same company. These goods as imported is not capable of standalone fun....
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....nna Subassembly is not considered an "apparatus" under customs tariff classification. For an item to qualify as an apparatus, it must be capable of performing a complete function on its own, without relying on other components [refer definition of "apparatus", "equipment" and "instrument" provided under the Modern Dictionary of Electronics, 7th Edition by Rudolf F Graf]. b. The Receiver Upper Antenna Subassembly, by itself, cannot function independently and requires connection to other components (like the Main Logic Board of mobile through FPCBA) to operate. c. As it does not perform its function as a self-contained unit, it does not meet the criteria for being classified as an "apparatus for transmission and reception of voice or data". Therefore, it cannot be classified under the relevant tariff entry for such apparatus. 4.2 The Receiver Upper Antenna Subassembly in its as imported condition cannot carry out reception and transmission of information - a. Even if the Receiver Upper Antenna Subassembly (RUA) is classified as an "apparatus" it cannot be covered under the category of "apparatus for transmission and reception of data" because, in its as-....
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....ase. The test assesses whether an item can be classified under a separate heading or must be considered part of a larger machine. The twin test has two conditions to be classified as parts: * The item should not have a separate identifiable function of its own. * The item should be incapable of operating independently of the main machine. b. While the Receiver Upper Antenna Subassembly has a distinct function (enabling communication with networks), it cannot operate independently of the mobile phone. It only becomes functional when integrated with other components of the phone. Therefore, it meets both conditions of the twin test and hence it cannot be classified under a separate heading as an apparatus and must be classified as part of the mobile phone under CTH 8517. 4.5 Applicability of concessional BCD under S. No. 6J of Notification No. 57/2017 - a. S. No. 6J of Notification No. 57/2017 provides for concessional BCD at 10% for goods used in the manufacture of cellular mobile phones, classified under CTH 8517 79 90. As the Receiver Upper Antenna Subassembly is classified under CTH 8517 79 90 and is an essential part of a mobile phone, it s....
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....ation of goods in this Schedule shall be governed by the following principles: 2. The titles of Sections, Chapters and Sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions 5.3 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.). 5.4 The Customs Tariff in India is based on Harmonized Commodity Description and Coding System, generally referred to as Harmonized System of Nomenclature ('HSN') developed by the World Customs Organization ('WCO') which ....
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....escription of an article or group of articles is preceded by " --", the said article or group of articles shall be taken to be a sub-classification of the immediately preceding description of the article or group of articles which has "-". Where the description of an article or group of articles is preceded by " --- " or " ---- ", the said article or group of articles shall be taken to be a sub-classification of the immediately preceding description of the article or group of articles which has "-" or " -- ". ['Where the description of an article or group of articles is preceded by "- - - - ", 'in addition to being a sub-classification of "-" or "- - ", the said article or group of articles may also be taken to be a sub-classification of the immediately preceding description of the article or group of articles which has "- - - ".';]" Thus, classification of a product under a heading (four-digit entry) is to be done using dashes. Firstly, the entries at single dash level under the heading are to be compared, then entries at double-dash level are compared and so on. 5.7 In the light of above legal provisions, to analyze the classification of above product following nee....
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.... - Other apparatus for 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) - Parts 5.9.2 Accordingly, it can be safely submitted that the Receiver Upper Antenna Subassembly cannot qualify as "other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network". Therefore, the Receiver Upper Antenna Subassembly merits classification as 'parts'. The Receiver Upper Antenna Subassembly is not an "apparatus" 5.10 Considering that in the present case, the main function of the product under consideration, i.e., Receiver Upper Antenna Subassembly is to carry out transmission and reception of signals to enable communication function of mobile phone, one may consider it to be classifiable under the single dash entry for other apparatus for transmission or reception of voice. For the Receiver Upper Antenna Subassembly to qualify single dash level which covers "other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wir....
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....ations carried out onto the goods is not relevant for the purpose of customs assessment. In this regard, reliance is placed on Vizag Shipping and Metal Processors vs. CC, [2005 (189) E.L.T. 40], wherein it was held that imported goods are to be assessed in the form in which importation takes place. The relevant extract of the judgment is as follows: "6...In our view the imported goods should be assessed in the form by which the importation takes place. What happens to the goods afterwards, may not be a criteria to assess them, unless the tariff specifically says so. 'Ocean going vessels during the relevant period were exempted from excise duty by virtue of Notification No. 234/82. The vessels which were imported arrived at the port of importation by their own motive power. They might be very old and used. On that account we cannot say that they cease to be ocean going vessels" 5.13 In another case, Vareil Weaves vs. UOI, [1996 (83) E.L.T. 255 (S.C.)], it was held that countervailing duty is to be levied on goods in the stage in which they are imported, since Section 3 of the Customs Tariff Act so mandates. The stage reached subsequent to processing of imported goods is ....
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....g out transmission and reception of data in its as imported condition, it is also excluded from the purview of single dash entry covering "apparatus for transmission and reception of data". The Receiver Upper Antenna Subassembly qualifies as a 'part' of mobile phone 5.17 Considering that the Receiver Upper Antenna Subassembly is a component which is solely designed for use in mobile phones, the most relevant single dash entry under CTH 8517 is the entry which covers "parts of mobile phone". In view of the above, it becomes pertinent to analyze whether the Receiver Upper Antenna Subassembly can be considered as a 'part' of mobile phones. The term 'parts' has not been defined in the HSN Explanatory Notes or the Customs Tariff. Hence, reliance must be made to the Hon'ble Supreme Court's Ruling in the case of CCE, Delhi Vs. Insulation Electrical (P) Ltd., [2008 (224) E.L.T. 512 (S.C.)]. In this case, the Apex Court while relying on various other earlier rulings has defined the term "parts" as "an essential component of the whole without which the whole cannot function". 5.18 In the present case, the product under consideration is a Receiver Upper Antenna Subassembly which enab....
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.... 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. Since the Receiver Upper Antenna Subassembly is suitable for use solely with mobile phone, it must be classified with this mobile phone as its part. In this light, since the mobile phones are covered under heading 8517, more specifically under CTH 8517 1300, the Receiver Upper Antenna Subassembly shall also merit classification as part of the mobile phone under CTH 8517. Receiver Upper Antenna Subassembly satisfies the twin test of what is considered to be a "part" 5.21 To ascertain whether an item should classify under a separate heading or as part of the main machine, reference is made to the judgment of the Hon'ble CESTAT Delhi in the matter of M/s. Vodafone Idea Limited Vs. Principal Commissioner of Customs (Imports), Final Order No. 50874/2022 dated 20.09.2022 wherein the Hon'ble bench held that an item will not be considered as a 'part' if, on a standalone basis, it can be considered as an article classifiable under its own appropriate heading. To this effect, it laid down the twin test for det....
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....tion becomes something over and above a simpliciter antenna as covered under CTH 8517 71 00. Accordingly, the same is excluded from the purview of this entry owing to the presence of receiver. Further, since the product under consideration is not a printed circuit board, hence, it is excluded from CTH 8517 79 10. Therefore, the Receiver Upper Antenna Subassembly is classifiable under the residuary entry of 'Other' parts under CTH 8517 79 90 which reads as- "Telephone sets, including smartphones and other telephones for cellular networks or for other wireless networks: Other apparatus for the transmission or reception of vice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528- Parts-Other --- Other", in terms of GIR 1 read with GIR 6. 5.24 The Applicant intends to exporting the Receiver Upper Antenna Subassembly to the third- party manufacturers of mobile phones and accordingly has sought to seek clarity on eligibility of availing exemption benefit under Sr. No. 6J of Notification No. 57/2017. The Central Government in....
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....b. The term "parts" is not defined in the HSN Explanatory Notes or Customs Tariff, so reliance is placed on legal precedents, including CCE, Delhi Vs. Insulation Electrical (P) Ltd. & Electrosteel Castings Vs. CCE which defines "parts" as essential components without which the whole cannot function. c. As mentioned previously, the Receiver Upper Antenna Subassembly enables communication between the mobile phone and other networks, including wireless networks, thereby contributing significantly to the phone's overall functionality and performance. Thus, the same is critical to the phone's overall performance. Accordingly, it fulfils the definition of "parts" mentioned above. d. Further, Section Note 2 of Section XVI provides classification rules for parts, stating that parts suitable for use with a specific type of machine (e.g., mobile phones) should be classified with that machine. e. As the Receiver Upper Antenna Subassembly is suitable only for mobile phones and is not classifiable under any other heading of Chapter 84 or 85, it should be classified as part of the mobile phone under CTH 8517, in terms of Section Note 2 (b). Receiver Upper Antenna Su....