Custom, Excise & Service Tax Tribunal
Inflow Technologies Pvt Ltd vs Cc Air Cargo Ch - Vii on 10 June, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
CHENNAI
REGIONAL BENCH - COURT No. III
Customs Appeal No. 41537 of 2019
(Arising out of Order-in-Original No.278/2019-AIR dated 17.05.2019
passed by Commissioner of Customs (Chennai-VII), New Custom House,
Meenambakkam, Chennai 600 027)
M/s.Inflow Technologies Private Ltd. .... Appellant
#33 & 34, Inflow House,
Off 100 Feet Road,
Indira Nagar 1st Stage,
Bangalore 560 038.
VERSUS
The Commissioner of Customs ... Respondent
Chennai-VII, New Custom House,
Meenambakkam,
Chennai 600 027.
WITH
Customs Appeal No. 41538 of 2019
(Arising out of Order-in-Original No.278/2019-AIR dated 17.05.2019
passed by Commissioner of Customs (Chennai-VII), New Custom House,
Meenambakkam, Chennai 600 027)
Shri Byju Pillai .... Appellant
Director & CEO,
M/s.Inflow Technologies Private Ltd.
#33 & 34, Inflow House,
Off 100 Feet Road,
Indira Nagar 1st Stage,
Bangalore 560 038.
VERSUS
The Commissioner of Customs ... Respondent
Chennai-VII, New Custom House,
Meenambakkam,
Chennai 600 027.
2
APPEARANCE :
Shri Rohan Muralidharan, Advocate for the Appellant
Shri Anoop Singh, Authorized Representative for the Respondent
CORAM :
HON'BLE MR. P. DINESHA, MEMBER (JUDICIAL)
HON'BLE MR. M. AJIT KUMAR, MEMBER (TECHNICAL)
FINAL ORDER Nos.40599-40600/2025
DATE OF HEARING : 24.01.2025
DATE OF DECISION :10.06.2025
Per: Shri P. Dinesha
The Appellant imported Wireless Access Points (WAPs)
between July 2014 to June 2017 and classified them under
Customs Tariff Item (CTI) 8517 6990 as "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)". It claimed
the benefit of 'nil' rate of duty as provided for under
Sl. No. 13 of Notification No. 24/2005-Cus. dated
01.03.2005.
2. We find from Sl. No. 13 of the Notification that this
benefit of 'nil' rate was available to "All goods except the
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following: - ... (iv) Multiple Input/ Multiple Output (MIMO)
and Long Term Evolution (LTE) Products.)"
3. By the impugned Order-in-Original 278/2019-AIR
dated 17.05.2019, the Commissioner took it to be
undisputed that the WAPs employed Multiple Input Multiple
Output (MIMO, for short) technology but did not accord with
Long Term Evolution (LTE, for short) standards. He thus
rejected the Appellant's contention that the exclusion in
clause (iv) in Sl. No. 13 of the Notification would only apply
to products which both employed MIMO technology and
accorded with LTE standards. He essentially held that the
requirements in clause (iv) as to MIMO and LTE were
disjunctive and not conjunctive. He therefore held that since
the WAPs employed the MIMO technology, they satisfied one
of the two disjunctive criteria and fell within the scope of the
exclusion to the exemption and were not entitled to the
benefit of the 'nil' rate of duty.
4. Sri Mohan Muralidharan, Ld. Advocate argued for the
Appellant and Sri Anoop Singh, Ld. Joint Commissioner
Argued for the Respondent; we have heard, at length, the
submissions of the parties and we have very carefully
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considered the documents and judicial pronouncements
referred to and relied upon during the course of arguments.
5. Having heard submissions and considered the material
on the record, we find that the only issue to be addressed to
by us is, "whether the denial of benefit of Notification No.
24/2005 supra, by the Commissioner is in order"?
6. On behalf of the Appellant, Sri Rohan Muralidharan,
Ld. Advocate would contend that the question at hand is
squarely covered by the following decisions :
1. Commissioner of Customs (Air) Chennai
VII Vs M/s.Ingram Micro India Pvt. Ltd. -
2022 (9) TMI CESTAT NEW DELHI = 2023
(383) ELT 455 (Tri.-Del.) affirmed by the
Hon'ble Delhi High Court reported in 2025
(1) TMI 797-DELHI HIGH COURT.
2. CC (Air) Chennai VII Vs M/s.Redington
(India) Ltd. 2023 (12) TMI 754 - CESTAT
NEW DELHI = 2024 (387) ELT 79 (Tri.-Del.)
affirmed by the Hon'ble Delhi High Court
reported in 2025 (1) TMI 859-DELHI HIGH
COURT.
3. CC (Import), Mumbai Vs Beetal Teletech
Ltd.- 2023 (11) TMI 69 - CESTAT NEW
DELHI affirmed by the Hon'ble Delhi High
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Court reported in 2025 (1) TMI 858 DELHI
HIGH COURT.
4. CC (Air) Chennai VII Vs Compuage
Infocom Ltd. - Final Order No.58106/2024
dated 22.08.2024 CESTAT NEW DELHI.
7. In response, on behalf of the Respondent, it was
submitted that in the OIO leading to the aforesaid
judgement of the Hon'ble Delhi High Court in Ingram
Micro's case did not discuss the issue of mis-
classification. It was therefore sought to rely on the
submissions made on behalf of the Revenue in Ingram
Micro's case, including before this Tribunal. Reliance was
placed on the order of a Chennai Bench of this Tribunal in
Ingram Micro India Private Ltd. v. CC Chennai - 2020
(11) TMI 9 CESTAT CHENNAI. We were invited to follow
the order of the Co-ordinate Bench of this Tribunal which,
in the Revenue's submission, had answered the question
of classification correctly.
8. Elaborate submissions were also advanced on the
description and features of the WAPs. It was sought to be
contended, inter alia, that a product cannot have a
standard but can only conform to one in an attempt to
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contend that the construction placed upon the aforesaid
clause (iv) in Sl. No. 13 of the exemption notification is
not appropriate. Besides this, the findings in the OIO in
the present appeal were thus reiterated and supported
before us.
9. Elaborate submissions were also advanced by the
Appellant-importer in rejoinder.
10. After going through the decision of Hon'ble Delhi
High Court supra, we find that the Appellant is right in
submitting that the issue is covered by the judgement of
the Hon'ble Delhi High Court in Ingram Micro's case.
The relevant findings of the Hon'ble High Court are
reproduced below:
"46. However, in our opinion, the aforesaid contention is
unmerited. If the intention of the Central Government
was to include products utilizing either MIMO technology
or LTE standard or both, the phrase 'MIMO or LTE
Products' could have been used. The use of the
conjunction 'or' would have naturally encompassed all
products with either of the two technologies/standards,
and also those products which combine both. There
would have been no need to use 'and' in place of 'or', as
the latter would inherently fulfill the purpose of including
all such categories. To explain in simpler terms, the
phrase "MIMO or LTE Products" would mean - products
having MIMO technology or products having LTE
standard. A product having MIMO technology can have
many other technologies, standards, etc., which may
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also include LTE standard. Similarly, a product having
LTE standard can have many other technologies,
standards, etc., which may also include MIMO
technology. Thus, the phrase 'MIMO or LTE Products'
would have included the categories of products, which
the Revenue is projecting before this Court.
47. Moreover, in earlier entries of the same notification,
such as Serial No. 13 (ii) and (iii), the word 'or' has been
used wherever appropriate to denote alternatives.
Similarly, commas have also been employed to
demarcate distinct categories of products. Had the
intention been to use 'and' in a disjunctive manner in
entry (iv) of Serial No. 13, the phraseology could also
have been easily drafted as follows: 'MIMO Products and
LTE Products', or 'MIMO Products and/or LTE Products',
or 'MIMO Products or LTE Products'. These products
could also have been separated by use of commas, such
as by drafting the same as 'MIMO Products, LTE
Products' or 'MIMO Products, and LTE Products'.
However, the same has not been done in the exclusion
entry in question.
48. As noted in the preceding discussion, MIMO is a
technology and LTE is a standard. Concededly,
the case of Revenue is that "MIMO and LTE Products",
inter alia, includes "products which work on LTE standard
and have MIMO technology". Thus, it is not disputed that
there exist products which embody both MIMO
technology and LTE standard.
... ....
51. Further, the term "and" is a conjunction, commonly
understood to connect and join words, clauses, or
phrases. Dictionaries and linguistic principles affirm that
"and" denotes addition or combination, unless there is
ambiguity or absurdity arising from its literal
interpretation.
......
53. In the present case, there is no such ambiguity or absurdity. In our view, when all the four entries of Serial No. 13 are analysed, it would lead to only one conclusion that the word "and" is to be read in conjunctive manner only, and the phrase "MIMO and LTE Products" would 8 refer to only those products which have both MIMO technology and LTE standard.
54. As far as the argument of the Revenue that in the year 2021, the Notification No. 25/2005, and one Notification No. 57/2017-Customs were amended and the phrase "MIMO and LTE Products" were substituted with '(i) MIMO products; (ii) LTE products', and that these amendments were clarificatory in nature, is concerned, notably, an amendment in the Notification No. 57/2017- Customs was brought vide Finance Act, 2021 which is clarificatory in nature, and, clarifies Serial No. 20 of the said notification. It states that the subject entry will now be read as '(i) MIMO products; (ii) LTE products'. Similar change was brought in Notification No. 25/2005 by virtue of Notification No. 05/2021-Customs.
55. Thus it is clear that the aforesaid amended entries in the concerned Notifications, in their clarificatory form, will be applicable only from the date of coming into force of these amendments i.e. 02.02.2021. As a natural consequence, the cases, which are in dispute qua the exclusion entry in question, which are pending adjudication or were adjudicated prior to the amendment brought about by clarifications, will be amenable to interpretation and adjudication as it stood prior to the aforesaid clarification and amendment.
56. It would, therefore, mean that in cases involving disputes over interpretation of the subject entry, the amendment brought about through later clarification cannot put fetters on the powers of the Courts or adjudicating authorities, dealing with disputes prior to the amendment so as to have a binding effect on such authorities or on the Courts to hold as correct the clarification as the guiding principle to decide the entry which stood prior to such amendment in its original form.
57. We are of the view that the clarification is brought about in the Statute when there is ambiguity and disputes arise due to such ambiguities. The fact that a clarification is needed to be brought about in the subject entry by the Finance Act, 2021 would point out towards the inherent ambiguity experienced in its interpretation and application which prompted and necessitated the subject amendment and clarification. In the light of this observation and the facts of the present case as well as the judicial precedents in similarly situated cases, we are 9 of the opinion that exclusion clause (iv) of Serial No. 13 of the amended Notification No. 24/2005, which reads as 'MIMO and LTE products', would have to be read in its original form applying the law and rules of interpretation of statutes, especially as applicable in cases of taxation.
58. While adjudicating cases of disputes over an entry attracting or not attracting customs duty, the first and foremost rule to be followed is reading it as it stands by giving it the meaning that can be understood by reading the plain language of the entry in question.
59. Coming back to the facts of the case and applying the above principle, we note that the word 'and' is suffixed with the word 'MIMO' and prefixed with the word 'LTE' and there is no punctuation mark or comma after the word 'MIMO' and before the word 'and'. Further, 'MIMO and LTE' are followed by the word 'products'. Therefore, as a common rule of English language, the word 'and' would clearly, and in unambiguous terms, be read conjunctively.
60. To reiterate, the amendments as discussed above were introduced in the year 2021, whereby "MIMO and LTE products" were changed to "(i) MIMO products; (ii) LTE products". The word 'and' has been totally taken out from the new entry and the same is absent from the entry altogether. The absence of word 'and' between the word 'MIMO' and 'LTE', as it existed prior to the amendment brought as clarification, rather speaks and explains by its absence, about the presence of intention to read 'MIMO' and 'LTE' as conjunctive and not disjunctive.
61. In light of the above, we hold that the phrase "MIMO and LTE Products" in Serial No. 13 (iv) of the amended Notification No. 24/2005 applies solely to products combining MIMO technology and LTE standards. The exclusion clause cannot be stretched to encompass products featuring either one of the two technologies. Accordingly, the WAPs imported by the respondent, which employ MIMO technology but not the LTE standards, are entitled to the exemption from Basic Customs Duty.
62. In view thereof, we are of the opinion that the order of the learned CESTAT does not suffer from any infirmity or error and, is, therefore upheld."
1011. Considering that the Revenue's contentions in response to the points which have already been decided by the Hon'ble Delhi High Court, it is not open to us to consider these submissions on their merits. The Revenue's reliance on the order of the Co-Ordinate Bench in Ingram Micro is also misplaced, in as much as it is not open to us to rely on a decision of a Bench of this Tribunal in preference to a judgement of a Hon'ble High Court, particularly when, in our opinion, the judgement of the Hon'ble High Court directly covers the question.
12. In view of the above, we are of the opinion that the Commissioner was not justified in denying the benefit of Notification No. 24/2005 supra and hence, we set aside the impugned order and allow the appeals with consequential benefits if any, as per law.
(Order pronounced in open court on 10.06.2025 ) (M. AJIT KUMAR) (P. DINESHA) Member (Technical) Member (Judicial) gs