Authority Tribunal
In Re: Alcatel India Ltd. vs Unknown on 6 October, 2005
Equivalent citations: 2005(189)ELT25(AAR)
RULINGS NEW DELHI CUSTOMS, CENTRAL EXCISE AND SERVICE TAX Ruling No. AAR/11(Cus)/2005 in Application No. AAR/44(Cus)/10/2005 Decided On: 06.10.2005 Appellants: In Re: Alcatel India Ltd. Vs. Respondent: Hon'ble Judges: Syed Shah Mohammed Quadri, J. (Chairman), Somnath Pal and B.A. Agrawal, Members Counsels: For Appellant/Petitioner/Plaintiff: None For Respondents/Defendant: A.K. Roy, JCDR Subject: Customs Acts/Rules/Orders: Customs Act, 1962 - Section 28H; Customs Tariff Act, 1975; General Rules - Rules 1 and 2 to 6 ORDER
Syed Shah Mohammed Quadri, J. (Chairman)
1. In this application under Section 28H of the Customs Act, 1962 (for short "the Act"), the applicant is a wholly owned subsidiary Indian company of M/s. Alcatel, France. The applicant is manufacturing and supplying telecom equipments to the Indian customers. The applicant proposes to import into India Branching Unit R-3 described in Annexure-II of the application in connection with its business. On these facts, the applicant seeks advance ruling of the Authority on the following question :-
"Whether Branching Unit R3, proposed to be imported into India, is classifiable under Heading No. 8517 50 99 of the First Schedule of the Customs Tariff Act, 1975"?
2. It is mentioned in Annexure-II of the application that ASN R3 Branching Unit (for short the "BU") is designed for telecommunications systems utilising submerged equipment; it is hybrid of optical, electronic and mechanical systems which forms part of submarine telecommunications system for use in transmission of aggregate data. The BU is of an ASN generic design and includes features that allow the configuration of the branching unit to suit a given system. It provides a power switching capability to allow various telecommunications system powering configurations and has provision for latching of the sea earth connection so that the configuration can survive partial power-down of the system. Power switching facilities are achieved by including Repeater-type amplifier electronics in one trunk fibre pair and/or spur fibre pair. These amplifiers facilitate the execution of supervisory commands. Additional non-amplified fibre pairs can pass through the branching unit which is designed to terminate three line telecommunications cables and provide the following functions : line current switching', sea earth connection; latching of the sea earth connection; and diversion of one or more fibre pairs to the spur terminal. These features allow the BU to be utilised in complex branched telecommunication systems.
In accordance with Rule 1 of the General Rules for the Interpretation of the First Schedule to the Customs Tariff Act, 1975 (for short "the Rules") the BU is classified under Heading 8517 and in view of Rule 6 thereof the same is classified under sub-heading 8517 50 and it falls under Tariff Item 8517 50 99. It is also submitted that the United Kingdom, the United States of America and the Australia have classified the product under Tariff Heading 8517 50.
3. The Commissioner, in his comments, states that on the basis of the description of goods given in Annexure-II and General characteristics given in Technical documents the contention of the applicant that in accordance with the Rule 1 of the General Rule of interpretation, the classification of the BU under Tariff Heading 8517 is acceptable. He has further stated that the BU is designed for complex branched Telecommunication Systems and appear classifiable under Tariff Heading 8517 50 99 of the Schedule.
4. Rule 1 of the General Rules for the interpretation of the First Schedule provides that titles of Sections, Chapters and Sub-Chapters are provided for ease of reference only; for legal purposes, classification of goods shall be determined according to the terms of the headings and any relative Section or Chapter Notes and provided such heading or Notes do not otherwise require, the classification shall be according to the provisions of the said Rules 2 to 6. Rule 6 says that for legal purposes, the classification of goods in sub-headings of a heading shall be determined according to the terms of those sub-headings and any related sub-heading Notes and, mutatis mutandis, to the above rules, on the understanding that only sub-headings at the same level are comparable. It further provides that for the purpose of Rule 6 the relative Section and Chapter Notes also apply, unless the context otherwise requires. The heading under which classification of the BU is proposed is 8517 which reads as follows :-
Chapter 85 Electrical Machinery and equipment and parts thereof etc.
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Tariff Description of Goods Unit Rate of duty
item Standard Preferential
Areas
--------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
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8517 Electrical apparatus
for line telephony or
line telegraphy, in-
cluding line telephone
sets with cordless
handsets and tele-
communication
apparatus for carrier-
current line systems or
for digital line sys-
tems; video-phone
-Telephone sets; video-
phones :
851711 -- Line telephone sets with
cordless handsets:
85171110 -- Push button type u Free
85171190 -- Other u Free
851719 -- Other:
Telephone sets:
85171911 -- Push button type u Free
8517 19 12 -- Rotary dial type u Free
85171919 -- Other u Free
85171920 -- Videophones u Free
Facsimile machines and
teleprinters:
8517 2100 -- Facsimile machines u Free
8517 2200 -- Teleprinters u Free
8517 30 00 -- Telephonic or tele- u Free
graphic switching ap-
paratus
8517 50 -- Other apparatus, for
carrier-current line sys-
tems or for digital line
systems:
85175010 -- PLCC equipment u Free
8517 50 20 -- Voice frequency tele- u Free
graphy
8517 50 30 -- Modems (modulators u Free
-demodulators)
8517 50 40 -- High bit rate digital u Free
subscriber line system
(HDSL)
8517 50 50 -- Digital loop carrier u Free
system (DLC)
8517 50 60 -- Synchronous digital u Free
hierarchy system
(SDH)
8517 50 70 -- Multiplexer, statistical u Free
multiplexer
-- Other:
8517 50 91 -- ISDN terminals u Free
8517 50 92 -- ISDN terminal adapt- u Free
ers
8517 50 93 -- Routers u Free
8517 50 94 -- X 25 pads u Free
85175099 Other u Free
...
...
The Heading 8517 is in two parts: The first part deals with electrical apparatus for line telephony or line telegraphy, including line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems; the second part is in respect of videophones.
It may be seen that sub-heading 8517 50 which is said to cover the BU, is of the following description :-
"Other apparatus, for carrier-current line systems or for digital line systems".
Having regard to the description of the Branching Unit, referred to above, as could be seen from the technical write-up submitted by the applicant, the BU in question appears to have two individual main components namely line current switching and diversion of one or more fibre pairs to the spur terminal, intended to contribute together to the function of transmission of images/data etc. as a telecommunication apparatus for carrier current line systems or for digital line systems falling under Heading 8517. Neither the technical write-up submitted by the applicant nor the comments of the Commissioner bring out any other facts or parameters to go beyond 8517 for a more specific heading. Since, the goods in question are not covered by any of the sub-heading/Tariff Item from 8517 11 up to and including 8517 30 00, it will fall under sub-heading 8517 50 and more specifically under Tariff Item 8517 50 99, after excluding rest of the named items 8517 50 10 to 8517 50 94.
5. For the reasons mentioned above, we rule on the aforementioned question that Branching Unit R3 proposed to be imported into India, is classifiable under Tariff Item 8517 50 99 of the First Schedule of the Customs Tariff Act, 1975.