Custom, Excise & Service Tax Tribunal
Prose Technologies India Private Ltd vs Commissioner Of Customsnhava Sheva-Ii on 21 July, 2022
CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, MUMBAI
REGIONAL BENCH
Customs Appeal No. 88290 of 2019
(Arising out of Order-in-Appeal No. 920 to 922-GR-VA-2019-JNCH-APPEAL-II
dated 10.06.2019 passed by the Commissioner of Customs (Appeals),
Mumbai-II)
Commissioner of Customs, Sheva-V Appellant
JNPT, Custom House, Nhava Sheva, Raigad 400 707.
Vs.
M/s. Prose Technologies India Private Limited Respondent
406/407, 4th Floor, ECO Star, Vishveshwar Nagar,
Behind Udipi Hotel, Goregaon (East),
Mumbai 400 063.
Appearance:
Shri Ramesh Kumar, Assistant Commissioner, Authorised
Representative for the Appellant
Shri T. Viswanathan with Shri Akhilesh Kangsia, Advocates, for the
Respondent
CORAM:
HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL)
HON'BLE MR. AJAY SHARMA, MEMBER (JUDICIAL)
Date of Hearing: 21.07.2022
Date of Decision: 21.07.2022
FINAL ORDER NO. A/85691/2022
PER: SANJIV SRIVASTAVA
This appeal has been filed by the revenue is directed
against order in appeal No. 920 to 922 (Gr VA)/2019
(JNCH)/Appeal - II dated 10.06.2019 of the Commissioner of
Customs (Appeals), Mumbai II, JNCH Nhava Sheva. By the
impugned order, the Commissioner (Appeals) held as follows:
"16. In view of above, the speaking order on assessment in
F.No. S/26-Misc-566/2018-19/Gr VA/JNCH and order number
247/2018-19/DC/Gr V/JNCH dated 06.07.2018 as mentioned in
table 1 are set aside. The Assst/Deputy Commissioner Group VA,
NS V, JNCH Nhava Sheva is directed to reassess the antenna
imported wide bills of entry number 5035476 dated 01.02.2018,
5035629 dated 01.02.2018, 6427856 dated 18.05.2018,
2 C/88290/2019
6460162 dated 21.05.2018, 6459522 dated 21.05.2018,
6427836 dated 18.05.2018, 6459748 dated 21.05.2018,
6480465 dated 22.05.2018 and 6480635 dated 09.02.2018
under tariff item 85177090 appeal numbers 1577/2018 and
1578/2018 filed by M/s Rosenberger Electronic Co (I) Pvt. Ltd.
and appeal number 835/2018 filed by M/s Reliance Jio Infocomm
Ltd are allowed accordingly."
1.2 Though Commissioner (Appeals) has by the impugned
order disposed of three appeals, two filed by M/s Rosenberger
Electronic Co (I) Pvt. Ltd. (now known as M/s. Prose
Technologies India Pvt. Ltd.) and one filed by M/s Reliance Jio
Infocomm Ltd, revenue has filed only one appeal against the
impugned order.
2.1 Respondents filed the Bill of entries as detailed in table 1
below, for the clearance of the goods as indicated. These Bills of
Entry were reassessed and speaking order as per Section 17 (5)
of the Custom Act, 1962 was issued modifying the classification
acclaimed by the respondents.
Respondent Bill of Entry No and date Description of Classification under CTH
Goods
Claimed Determined
1 5035476 dtd Passive Antenna/ 85177090 85176290
01.02.2018, 5035629 Base Station
dtd 1. 2.2018 Antenna
2 6427856 dtd 18. Antenna with ACC 85177090 85176290
5.2018, 6460162 dtd (Parts of
21.05.2018, 6459522 telecommunication
dtd 21.05.2018, equipments)
6427836 dtd
18.05.2018, 6459748
dtd 21.05.2018,
6480465 dtd
22.05.2018 6480635
dtd 09.02.2018
2.2 The speaking orders issued under Section 17(5) of the
Custom Act, 1962, reassessing the imported goods as stated in
table above were challenged by the respondents before the
Commissioner (Appeal) who by the impugned order, referred in
3 C/88290/2019
para 1 above allowed the appeals and upheld the classification
as claimed by the importers while filing the Bill of Entries.
2.3 Aggrieved revenue has filed this appeal.
3.1 We have heard Shri Ramesh Kumar, Assistant
Commissioner, Authorized Representative for the revenue
(Appellant) and Shri T Viswanathan and Akhilesh Kangsiya,
Advocates for the Respondent.
3.1 Arguing for the Appellant, learned Authorized
Representative reiterated the grounds taken in the appeal filed
by the revenue
From the Datasheets of the said Base Station Antennas it
is evident that the said Antennas are integrated antennas
with accessories having remote electrical tilt features,
which suggests that these are not mere wire or tube
antenna and are having in-built electro-mechanical
features to control their orientation/direction. It is
apparent that the above details have not been taken into
consideration in the opinion given by Prof. Girish Kumar,
Electrical Engineering Department, IIT Bombay as well as
the proceedings before the Commissioner (Appeals). The
said features make the said antenna as a composite
machine/ device appropriately classifiable under tariff item
85176290. The said Antennas are Antennas for Base
Stations of Cellular Networks,
During the Appellate Proceedings, before the
Commissioner of Customs (Appeals), Mumbai II, it has
been submitted that in a Wireless Telecommunication Site
or Base Station,
o The Base Band Unit (BBU), pre-processes the signal from
the core, in an electrical domain.
o The Radio Unit (RU)/RRH(Remote RF Head), transposes
the electrical signal into an electromagnetic domain, which
is then fed to the RF path,
o The BTS (Base Transceiver Station - for GSM/EDGE and
CDMA 2000) or the NodeB (for WCDMA/HSPA) or the
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eNodeB (for LTE) converts the signal in electrical domain
to the electromagnetic domain.
o The antenna, radiates, or transfers the electromagnetic
energy from the BTS/NodeB/eNodeB to the Handset over
free space.
From the above it is apparent that the Antenna is primarily
a device for transmitting and receiving radio waves, It
radiates or transfers the electromagnetic energy from the
BTS/NodeB/eNodeB to the Handset over free space and
that the presence of the antenna is essential for the
handset to connect to the BTS/NodeB/eNodeB and thereby
the core network.
It is reiterated that in terms of the HSN - the most
common types of Base Stations are those for cellular
networks, which receive and transmit radio waves to and
from cellular telephones or to other wired or wireless
networks and each base station covers a geographical area
(a cell). The technical opinion of Prof. Girish Kumar,
Electrical Engineering Department IIT Bombay, produced
by the original appellants before the Commissioner
(Appeals) has also mentioned that Base Station Antennas
are integral part of 'wireless telecommunication sites'
containing the BTS and that at the cell site, RF Cable/
Jumper is used to transfer the electromagnetic energy
from the BTS/ NodeB / eNodeB to the antenna.
Note 2 to section XVI of the First Schedule to the Customs
Tariff Act reads as under: "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, 8546 or 8547) are to be classified
according to the following rules as:
(a) Parts which are goods included in any of the headings of
Chapter 84 or Chapter 85 (other than headings 8409,
8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538
and 8548) are in all cases to be classified in their
respective headings:
5 C/88290/2019
(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, 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.
(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 8487 or 8548".
In terms of the said Explanatory Notes - Communication
networks include, inter alia, carrier-current line systems,
digital-line systems, digital-line systems and combination
thereof. They may be configured, for example, as public
switched telephone networks, Local Area Networks (LAN),
Metropolitan Area Networks (MAN) and Wide Area
Networks (WAN), whether proprietary or open
architecture. It is also specified that the communication
apparatus of such networks includes -
o Network Interface Cards (e.g. Ethernet interface
cards).
o Modems (combined modulators-demodulators).
o Routers, bridges, hubs, repeaters and channel to
channel adapters
o Multiplexes and related line equipment (e.g.
transmitters, receivers or electro-optical converters).
o Codecs (data compressors/decompressors) which
have the capability of transmission and reception of
digital information,
o Pulse to tone converters which convert pulse dialed
signals to tone signals.
It is accordingly apparent that other communication
apparatus which allows for the connection to a wired or
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wireless communication network' is classifiable as an
apparatus for communication in a wired or wireless
network (such as a local or wide area network) and would
fall under the single dash entry of heading 8517 pertaining
to '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)'
During the Appellate Proceedings it had been submitted on
behalf of the importers that the imported antennae have
universal application, are not specific to a technology or
generation. It has also been submitted that the said
antenna can be used for various cellular networks adopting
standards such as 2G/GSM, 3G, and 4G/ LTE. Further at
the Wireless Telecommunication Site or Base Station, RF
Cable/Jumper is used to transfer the electromagnetic
energy from the BTS/ NodeB/ eNodeB to these antennas.
From the above it is apparent that the imported antennas
are an individual entity/ apparatus which would be
connected to BTS of various standards such as 2G / GSM,
3G, and 4G / LTE. Since the presence of the antenna is
essential for the handset to connect to the BTS/ NodeB/
eNodeB and thereby the core network, it is apparent that
the antenna is clearly classifiable as an 'apparatus which
allows for the connection to a wired or wireless
communication network (such as a LAN or WAN' and is
therefore appropriately covered under the single dash
entry of heading 8517 pertaining to 'Other apparatus.......
including apparatus for communication in a wired or
wireless network (such as a local or wide area network'.
It has been held in the Order-in-Appeal that the imported
antennas are passive and not a machine. It has also been
held that the said antennas are not an apparatus and
cannot function on its own unless connected to equipment/
apparatus/ device.
In this regard it is reiterated that as far as classification of
the imported goods is concerned it is pertinent to mention
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that the terms of the headings and any relative Section or
Chapter Notes are paramount, i.e., they are the first
consideration in determining classification. It is apparent
that the single dash entry under heading 8517 pertaining
to apparatus for communication in a wired or wireless
network (such as a local or wide area network does not
specify the passive or active nature of the apparatus which
allows for the connection to a wired or wireless
communication network and the Notes to the HSN include
articles such optical electrical communication apparatus.
Further, Note 5 of Section XVI of the Tariff specifies that
the expression "machine" means any machine, machinery,
plant, equipment, apparatus or appliance cited in the
headings of Chapter 84 or 85. Apparatus for
communication in a wired or wireless network (such as a
local or wide area network) being specified in the heading
8517, all communication apparatus classifiable under the
said heading fall under the category of machines in terms
of the HSN and the Customs Tariff,
In the submissions made to the Commissioner (Appeals), it
has been submitted that Antenna was part of eNodeB. This
submission is entirely incorrect. The eNodeB is a complete
equipment/ device/ apparatus in itself. It has been stated
that the imported antennas could be used for various
cellular networks adopting standards such as 2G/GSM, 3G,
and 4G/LTE. It is also apparent that the imported antennas
are finished products which are traded on an individual
basis.
The Order-in-Appeal observes that the exemption
notifications have been treating antenna as parts of
apparatus for radiotelephony and radiotelegraphy and that
Notification No. 11/2018-Customs dated 02.02.2018 has
classified the said antenna under tariff item 8517 70 90. In
this regard it is submitted that the various Notifications
cited during the proceedings before the Commissioner
(Appeals) relate to antennas/ aerials of radiotelephony and
radiotelegraphy. Whereas, the imported antennas are
Antenna's for Base stations of cellular communication
8 C/88290/2019
networks and not the antennas/ aerials of radiotelephony
and radiotelegraphy. The imported antenna's, unlike the
antennas/ aerials of radiotelephony and radiotelegraphy,
are clearly apparatus which allows for the connection to a
wired or wireless communication network and are
appropriately classifiable under the single dash entry
pertaining to apparatus for communication in a wired or
wireless network (such as a local or wide area network).
The antennas / aerials of radiotelephony and
radiotelegraphy not being associated with communication
networks such as LAN/WAN are not classifiable as
apparatus for communication in a wired or wireless
network (such as a local or wide area network). As such
the Notifications cited before the Commissioner (Appeals)
are of no consequence to the imported antennas,
It has also been held by Commissioner (Appeals) that the
decision of HS Committee of WCO, classifying the antenna
for Base Station under HS Code 8517.70, cannot be
brushed aside lightly. In this regard it is reiterated that the
terms of the headings and any relative Section or Chapter
Notes are paramount, i.e., they are the first consideration
in determining classification of the goods. It remains a fact
that apparatus for communication in a wired or wireless
network (such as a local or wide area network) and
thereby apparatus which allows for the connection to a
wired or wireless communication network are covered
under the single dash entry of heading 8517. In the given
circumstances it is apparent that the terms of the headings
and any relative Section or Chapter Notes would prevail
over any other decision.
The decision of the Hon'ble Tribunal in case of M/s Reliance
Jio Infocom Ltd [2019 (369) ELT 1713 (Tri-Mum)] relied
upon by the respondent's counsels has been appealed
against by Revenue and the appeal has been admitted.
3.3 Arguing for the respondent learned counsels submitted
that:
9 C/88290/2019
The imported 'Passive Antenna' have universal application in
all cellular technology including 2G/3G/LTE. This is evident
from Opinion of Prof. Girish Kumar, Electrical Engineering
Department, IIT Bombay.
Classification of passive antenna for base station stands
concluded under Tariff Item 8517 70 90 in favour of the
Respondents, by the Hon'ble CESTAT, Mumbai in CC Vs.
Reliance Jio Infocomm - 2019 (369) ELT 1713. This view is
also taken by the Hon'ble CESTAT Chennai in Reliance Jio
Infocomm Vs. CC - 2022 (2) TMI 967 (Annexure 3).
The WCO's Classification Opinion issued on the basis of its
meeting in 62nd Session, September 2018 also supports the
classification of passive antenna for base station, under sub
Heading 8517.70 as · Parts"
Parliament has always treated 'aerial and antenna of all kinds'
as parts only, as is evident from Heading 85.29. Heading
85.29 covers Parts of Headings 85.25 to 85.28. Sub-Heading
8529.10 by name and description covers 'aerials and aerial
reflectors of all kinds'.
By amendment made vide the Finance Act 2021 whereby a
new Tariff Item 8517 71 00 was introduced within Sub-
Heading 8517.70 to cover Aerials and aerial reflectors of all
kinds; parts suitable for use therewith', w.e.f., 01.01.22,
without any change in the Heading 85.17 or sub-Heading
8517.70
The term "aerial' is an old usage for the relatively new term
'antenna'. Reference is made to IEEE Standard Definitions of
Terms for Antennas, published on June 2,983 and book titled
'Antennae Theory Analysis and Design, 3rd Edition,
Publication by John Wiley & Sons, INC' which refers to aerials
and antennae interchangeably and are part.
Even otherwise, Notification No.25/05-Cus., dated 1.3.2005
(SI. No.15) existing as on date grants exemption to 'aerials
or antennae for radio telephony and radio telegraphy' from
payment of basic custom duty falling under sub-Heading
8529.10. Applying principle laid down in Jain Engineering
10 C/88290/2019
reported at 1987 (32) ELT 3 (SC) at para 10, and Johnson &
Johnson reported at 1997 (92) ELT 23 (SC) at para 7,
exemption to aerials and antennae of sub-Heading 8517.70
is available.
4.1 We have considered the impugned order along with the
submissions made in appeal and during the course of arguments
and in written submissions made by the both the sides.
4.2 Commissioner (Appeals) has in the impugned order
considered the issue of classification of impugned goods in detail
and have arrived at the classification of the said goods. The
observations made by the Commissioner (Appeals) find support
from the decision of coordinate bench in the case of Reliance Jio
Infocomm referred earlier. Commissioner (Appeals) determined
the classification of impugned goods contrary to instructions
issued by the Board as per instruction No 01/2018-Cus dated
15.01.2018. In paragraph 13, recording his reasons for differing,
he observes as follows:
"13. The original authority (OA) in the impugned order has
simply quoted the CBIC circular number 01/2018 (Instruction)
dated 15.01.2018 and just mentioned one sentence regarding
his findings on the issue as "I find the explanation provided by
the aforementioned CBI instructions circular number 1/2018 -
Cus dated 15.01.2018 is self explanatory in nature." So saying
the adjudicating authority has rejected the declared classification
under the tariff item 85177090 and re-determined under tariff
item 85176290. The OA has not given any specific finding on the
submissions made by the appellants to canvass their standpoint.
the quasi-judicial authorities are expected to independently
apply their mind to the case, consider the submissions of the
affected parties and then pass a reasoned order in adjudication
as held in UOI v/s Madras Steel Re-rollers Association [2012
(278) ELT 864(SC) and CCE v/s Minwool Rock Fibres Ltd [2012
(278) ELT 584 (SC). The OA has not independently applied his
mind while adjudging these matters. Considering the evidence
furnished by the appellants, the provisions of the statute (Tariff),
the relevant case law etc. and in the light of Clause (b) of the
proviso to section 151A of the Customs Act, following the
11 C/88290/2019
principles of fairness and natural justice, I am constrained to
differ with the conclusion of the CBIC Circular relied upon by the
original authority on the classification issue involved here."
4.3 Undisputedly both the sides agree that the same issue has
been considered by the coordinate bench of CESTAT, in case of
Reliance Jio Infocom [2019 (369) ELT 1713 (T-Mum)} and bench
have decided the issue in favour of respondents.
4.4 Learned Authorized representative submitted that revenue
has filed the Civil Appeal Diary No 14797/2020 against the order
of CESTAT before the Hon'ble Apex Court. The said Civil Appeal
has been listed before the Hon'ble Apex Court on 18.12.2020,
05.08.2021, 17.09.2021, 11.11.2021 and 28.03.2022. The order
passed by the bench on the last day is reproduced below:
"CIVIL APPEAL Diary No(s). 14979/2020
(Arising out of impugned final judgment and order dated 06-11-
2019 in CA No. 85882/2018 06-11-2019 in CA No. 85883/2018
passed by the Custom Excise Service Tax Appellate Tribunal,
West Zonal Bench At Mumbai)
COMMISSIONER OF CUSTOMS (IMPORT) Petitioner(s)
VERSUS
M/S RELIANCE JIO INFOCOM LTD. Respondent(s)
(IA No.82614/2020-EXEMPTION FROM FILING C/C OF THE
IMPUGNED JUDGMENT and IA No.82613/2020-STAY
APPLICATION and IA No.82612/2020-CONDONATION OF DELAY
IN FILING APPEAL )
Date : 28-03-2022 This petition was called on for hearing today.
CORAM : HON'BLE MR. JUSTICE A.M. KHANWILKAR HON'BLE
MR. JUSTICE ABHAY S. OKA
For Petitioner(s) Mr. Balbir Singh LD ASG Mr. Mukesh Kumar
Maroria, AOR Mr. Rupesh Kumar, Adv. Mr. Bhuvan Mishra, Adv.
Mr. Udai Khanna, Adv.
For Respondent(s) Mr. K. R. Sasiprabhu, AOR (NP) Mr. Vishnu
Sharma, Adv. Mr. Tushar Bhardwaj, Adv.
12 C/88290/2019
UPON hearing the counsel the Court made the following O R D E
R In view of the letter circulated by the learned counsel for the
respondent seeking adjournment on the ground of personal
difficulty, list the matter after two weeks. Rejoinder filed by the
petitioner is taken on record."
From the above it is observed that neither the appeal has been
admitted by the Hon'ble Apex Court nor any stay granted by the
court. In view of the above we are not inclined to agree with the
submissions made by the authorized representative to adjourn
the matter till the decision of Hon'ble Apex Court in the Civil
Appeal Diary No 14979/2020.
4.5 The issue was again considered by the tribunal in case of
Reliance Jio Infocomm vide the order reported at [2022- TIOL-
604-CESTAT-Mum] and the bench dismissed the appeals filed by
revenue sating as follows:
"17. We also find that Revenue submits that on the basis of
Explanatory notes to the HSN the items are complete machines
or equipments classifiable under CTH 85176270. The
Department submits alluding to the HSN that as per explanation
(G) the equipment referred to therein allowed for connection to a
wired or wireless communication network or the transmission or
reception of speech or other sound, images or other data within
such networks. A look at this explanatory notes shows us the
following.
"85.17 - Telephone sets, including telephones for cellular
networks or for other wireless networks; 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), other than transmission
or reception apparatus of heading 84.43,85.25,85.27 or 85.28
(+).
- Telephone sets, including telephones for cellular networks or
for other wireless networks:
8517.11 - - Line telephone sets with cordless handsets
13 C/88290/2019
8517.12 - - Telephones for cellular networks or for other wireless
networks
8517.18
--Other
- 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):
8517.61 - - Base stations
8517.62 - - Machines for the reception, conversion and
transmission or regeneration of voice, images or other data,
including switching and routing apparatus
8517.69 - - Other
8517.70 - Parts
This heading covers apparatus for the transmission or reception
of speech or other sounds, images or other data between two
points by variation of an electric current or optical wave flowing
in a wired network or by electro-magnetic waves in a wireless
network. The signal may be analogue or digital. The networks,
which may be interconnected, include telephony, telegraphy,
radio-telephony, radiotelegraphy, local and wide area networks.
.....
(E) Telephonic or Telegraphic Switching Apparatus.
(1) Automatic switchboards and exchanges.
These are of many types. The key feature of a switching system is the ability to provide, in response to coded signals, an automatic connection between users. Automatic switchboards and exchanges may operate by means of circuit switching, message switching or packet switching which utilize microprocessors to connect users by electronic means.
Many automatic switchboards and exchanges incorporate analogue to digital converters, digital to analogue converters, data compression/decompression devices (codecs), modems, multiplexors, automatic data processing machines and other 14 C/88290/2019 devices that permit the simultaneous transmission of both analogue and digital signals over the network, which enables the integrated transmission of speech, other sounds, characters, graphics, images or other data.
.....
(F) Transmitting and receiving apparatus for radio-telephony and radiotelegraphy.
This group includes:
(1) Fixed apparatus for radio-telephony and radio-telegraphy (transmitters, receivers and transmitter-receivers). Certain types, used mainly in large installations, include special devices such as secrecy devices (e.g., spectrum inverters), multiplex devices (used for sending more than two messages simultaneously) and certain receivers, termed "diversity receivers", using multiple receiver technique to overcome Fading.
(2) Radio transmitters and radio receivers for simultaneous interpretation at multilingual Conferences.
(3) Automatic transmitters and special receivers for distress signals from ships, aircraft, etc. (4) Transmitters, receivers or transmitter/receivers of telemetric signals.
(5) Radio-telephony apparatus, including radio-telephony receivers, for motor vehicles, ships aircraft, trains, etc. (6) Portable receivers, usually battery operated, for example, portable receivers for calling, alerting or paging.
(G) Other communication apparatus.
This group includes apparatus which allows for the connection to a wired or wireless communication network or the transmission or reception of speech or other sounds, images or other data within such a network. Communication networks include, inter alia, carrier-current line systems, digital-line systems and combinations thereof. They may be configured, for example, as public switched telephone networks, Local Area Networks (LAN), 15 C/88290/2019 Metropolitan Area Networks (MAN) and Wide Area Networks (WAN), whether proprietary or open architecture.
This group includes :-
(1) Network interface cards (e.g., Ethernet interface cards).
(2) Modems (combined modulators-demodulators).
(3) Routers, bridges, hubs, repeaters and channel to channel adaptors.
(4) Multiplexers and related line equipment (e.g., transmitters, receivers or electro-optical converters).
(5) Codecs (data compressors/decompressors) which have the capability of transmission and reception of digital information.
(6) Pulse to tone converters which convert pulse dialed signals to tone signals.
PARTS Subject to the general provisions regarding the classification of parts (see the General Explanatory Note to Section XVI), parts of the apparatus, of this heading are also classified here."
12. Corresponding Customs Tariff entries for 8517 are read as under " - 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):
8517 61 00 -- Base stations 8517 62 -- Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus:
8517 62 10 --- PLCC equipment 8517 62 20 --- Voice frequency telegraphy 8517 62 30 --- Modems (modulators-demodulators) 16 C/88290/2019 8517 62 40 --- High bit rate digital subscriber line system (HDSL) 8517 62 50 --- Digital loop carrier system(DLC) 8517 62 60 --- Synchronous digital hierarchy system(SDH) 8517 62 70 --- Multiplexers, statistical multiplexers 8517 62 90 --- Other .... ...."
18. On going through the relevant HSN notes, we find that the apparatus or equipments referred in the notes are complete apparatus and not Populated Printed Circuit Boards of such apparatus. As submitted by the respondent the Network Interface Cards referred to in the notes are not PCB of any transmission or reception apparatus of heading 8517. Network Interface Cards connect the computers to the internet and therefore can be considered to have independent function. Going by the product literature and our discussions as above, we find that the impugned cards are incorporated in and or parts of DWDM equipments.
19. We find that this Bench has gone into the issue of classification of parts or equipment while dealing with the classification of antennas imported by the very same respondent case. This Bench observed that "Now, a simple analysis of Heading 8517 effective from 1-1- 2007, it is clear that the instruments/telephone sets for cellular networks/wireless net works, apparatus both for transmission and reception of voice, images or other data in a wired or wireless network, and "parts" classified under the said heading broadly placed under three categories of single dash (-). First single dash (-) for telephone sets, including telephones for cellular network or for other wireless network; second single dash (-) for 'other apparatus for transmission or reception of voice, images, or other data including apparatus for communication in wired or wireless network (such as local or wide area network); and the third single dash (-), for "parts".
17 C/88290/2019 The 'base station' is classified under the second category under CSH 8517 61 00, to which neither side disputes.
42. Revenue, referring to the definition of 'machine' prescribed under Note 5 of Section XVI classified the 'antenna' for base station under second category, as 'machines' for reception, conversion and transmission or regeneration of voice, images or other data including switching and routing apparatus. The Revenue's argument is based on the clarification issued by the Board on 1-1-2018 that antenna is an essential device of a wireless communication system; the information can travel only in the electromagnetic wave form. The antenna radiates the information in the form of electromagnetic wave in an efficient and desired manner to the base station, where the information is picked up by the receiving antenna and passed on to the receiver via transmission line. The signal is demodulated and the original message is then recovered at the receiver. Thus, the wireless communication gets established. It is the contention of the department that since the antenna can generate electromagnetic wave from current and voltages and which can convert electromagnetic wave to current and voltages with these waves impinge on it, therefore, it can be considered as a machine, which independently receives and transmits electromagnetic waves.
43. The respondent's contention, on the other hand, is that the antenna is a passive element. It cannot function on its own unless connected to the base station, Therefore, the same does not fall within the scope and meaning of 'machine' prescribed at Note 5 under Section XVI.
44. In support of their contention that the antenna imported for base station is a passive element, the respondent placed on record the opinion of Vinod Gandhi & Associates, Government registered Chartered Engineer. Also, they have placed a letter dated 12-11-2018 issued by the manufacturer of antenna i.e. M/s Ace Technology, Korea i.e. antenna supplied by them are passive part of base station i.e. e Node B (Sic). It is clarified that the antenna on its own is not capable of performing any function and when connected, it only transmits and receives only the 18 C/88290/2019 signals. It is further stated that the antenna is not performing in any other functions like conversion or regeneration of voice, images or other data signals or switching and/or routing of signals. No technical literature has been placed by the Revenue in support of their contention that the imported antenna for base stations are designed to function independently as a machine, contrary to the claim of the Respondent that these are passive elements and can function only when attached to the base station for receiving and sending signals. The Revenue has placed the general information available on net about the multi fold use of e node antenna in 4G & 5G network in the developed wireless cellular technology. Comparing the data placed on the imported goods, we find merit in the contention of the Learned Advocate for the appellant that to be antenna as machine, it needs to be something more than a passive element of receiving and sending electromagnetic waves when attached to a base station. The meaning of 'machine' provided under Note 5 to Section XVI reads as :
"5. For the purposes of these Notes, the expression "machine"
means any machine, machinery, plant, equipment, apparatus or appliance in the headings of Chapter 84 or 85."
The meaning of 'machine' has to be understood in the context of Heading 8517. This is clear when we read the scope of Heading 8517 as explained under HSN which reads as follows :-
"This heading covers apparatus for the transmission or reception of speech or other sounds, images or other data between two points by variation of an electric current or optical wave flowing in a wired network or by electro-magnetic waves in a wireless network. The signal may be analogue or digital. The networks, which may be interconnected, include telephony, telegraphy, radio-telephony, radio-telegraphy, local and wide area networks."
45. In the present case, the manufacturer of antenna as well as the chartered engineer's certificate, in clear terms clarified that the antenna in question transmits and receives only signals and not performing any other function like conversion or regeneration of voice, images or other data signals and 19 C/88290/2019 switching/routing of signals. Therefore, the antenna stand alone cannot be considered as a 'machine', attracting classification under Heading 8517.62. Consequently, the observation of the department in the circular dated 15-1-2018 that the Antenna itself is a complete device and has capability of functioning on its own of conversion of electrical signals into electromagnetic waves and vice versa in a wireless communication system cannot be applied to the present goods as it would be complete only when connected to a base station. In the event if the antenna so designed, instead of working as a passive element, besides the above function, it also performs some more functions as in the case of other entries under the same category, its classification under sub-heading 8517 62 may be attracted considering the same as an independent of 'machine'.
46. The Revenue's contention to classify the 'antenna' for base station under sub-heading 8517 62 rests on the ground that as per Note 2(a) of Section XVI, parts which in themselves constitute an article covered by a heading of this section, in all cases are to be classified in their own appropriate heading even if specially designed to work as part of a specific machine. Further it is contended that Antenna is a part of a machine classifiable under Heading 8517, only in the situation when it is not covered by any other headings of the section. As per department, since it is classifiable under 8517 62, hence, not to be considered under sub-heading8517 70 as 'parts'. The said Chapter note reads as follows :
"2. Subject to Note 1 to this Section, Note 1 to Chapter 84 and to 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 classified according to the following rules :
(a) parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 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) 20 C/88290/2019 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;
(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 8487 or 8548."
47. A simple analysis of Clause (a) of the above Note reveals that parts which are 'goods' required to be classified in the respective headings; in the present case, 'Antenna' being a part of the BTS, hence applying the said Rule, classifiable under Chapter Heading 8517. Revenue's interpretation of the said clause (a) in the present case is that in the event if the goods are not falling under any of the sub-heading of Heading 8517, then only it will be classifiable as 'parts', is incorrect. Clause (b) of the said Note 2 indicates that "other parts", by implication which are not goods, if suitable for use solely or principally with a particular kind of machine of the same heading are to be classified with the machines of that kind or the headings mentioned under the said clause (b) as appropriate. Further, it is mentioned that parts which are equally suitable for use principally with the goods of Heading 85.17 and Headings of 8517 and 8525 to 8528 are to be classified as Headings of 8517. Therefore, antenna since parts of BTS, as held by Hon'ble Supreme Court in Hutchison Essar South Ltd.'s case (supra), therefore, be classified as "parts" under Tariff Item 8517.7090.
20. We also find that Hon'ble Apex Courts has dealt the issue of classification of parts in the case of N.I. Systems India P. Ltd. - 2010 (256) ELT 173 (SC) = 2010-TIOL-52-SC-CUS and held as under:-
"28. For the reason given hereinafter, we hold on the basis of technical material (including the importer's own catalogue and webcast) that Controllers (including embedded controllers) are not merely PCs/ADPMs, but have a specialized structure and specific functions to perform and are therefore classifiable under Chapter 90.
21 C/88290/2019
29. Similarly, I.O. Modules and Chassis, which are the subject matter of import in this civil appeal are meant to operate as parts of industrial Process Control equipments like sensors. These I.O. Modules come with software tailored to their specific pre-defined functions. Therefore, one has to see the package in the holistic manner. The package as a whole both hardware and software- constitutes one single functional unit. Accordingly, we hold that I.O. Modules and Chassis are classified as parts and accessories of Automatic Regulating or Controlling Instrument/Apparatus under CTH 9032.90.00."
20. In view of the above, we find that the Department could not support their contention. No technical literature was submitted; in spite of the fact that the imports have been taking place over a period of time. Learned Commissioner (Appeals) has been upholding the contention of the appellants. In one instance Revenue has accepted the order of Commissioner (Appeals). We find that the Department has not drawn any samples and did not obtain technical opinion to support their claim that the impugned goods are complete machines or equipment capable of independent function themselves so as to merit classification under CTH 85176270. On the contrary, the respondents could demonstrate by technical literature; samples and the ratio of judgments cited above that the goods imported by them are Populated Circuit Boards (PCBs) used in PSS 1830 and therefore, the impugned goods are parts of PSS and as such merit classification CTH 85177010. We also find that the appellants have submitted US Customs Rulings on the classification of the impugned goods, though they are not binding on us, they would certainly have a persuasive effect more so in the absence of any evidence to the contrary. In view of the discussion as above, and considering the fact that Commissioner (Appeals) has been consistent in rejecting the department's claim, we are of the considered opinion that there is no merit in the appeals filed by the Department.
21. In the result, we uphold the impugned orders and reject the appeals filed by the Department."
22 C/88290/2019 4.6 Since the same issue has been considered by the coordinate bench and the appeals filed by the revenue have been dismissed, in our view this appeal also needs to be dismissed.
5.1 The appeal filed by the revenue is dismissed.
(Order pronounced in the open court) (Sanjiv Srivastava) Member (Technical) (Ajay Sharma) Member (Judicial) tvu