Custom, Excise & Service Tax Tribunal
M/S. Analogic Technomatics (P) Ltd vs Cc&Ce, Hyderabad-Ii on 26 August, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
REGIONAL BENCH AT HYDERABAD
Bench Division Bench
Court I
Appeal No.C/399/2006
(Arising out of Order-in-original No.12/2006 dt. 25/05/2006
passed by CC&CE, Hyderabad-II)
For approval and signature:
Honble Ms. Sulekha Beevi, Member(Judicial)
Honble Mr. Madhu Mohan Damodhar, Member(Technical)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3.
Whether their Lordship wish to see the fair copy of the Order?
4.
Whether Order is to be circulated to the Departmental authorities?
M/s. Analogic Technomatics (P) Ltd.
..Appellant(s)
Vs.
CC&CE, Hyderabad-II
..Respondent(s)
Appearance
Shri G. Natarajan, Advocate for the appellant.
Shri Nagaraj Naik, Deputy Commissioner(AR) for the respondent.
Coram:
Honble Ms. Sulekha Beevi, Member(Judicial)
Honble Mr. Madhu Mohan Damodhar, Member(Technical)
Date of Hearing:26/08/2016
Date of decision:26/08/2016
FINAL ORDER No._______________________
[Order per: Madhu Mohan Damodhar]
1.1. Appellant is a manufacturer of hand held terminals like Spot billing machines, Ticket issuing machines, Common meter reading instruments, Automatic Meter reading systems and Micro controller units, etc. For the purpose of manufacture of the above, the appellant imports various electrical / electronic items, inter alia, WISMO modules and connectors (hereinafter referred to as WISMO), which is a part used in the manufacture of the above said finished products. Originally, the appellant imported WISMO, describing the same as, parts of electronic calculating machines and classifying the same under Custom Tariff Heading (CTH) 8473 21 00 and availed the benefit of Notification No. 5/2004-Cus dated 08.01.2004 under Sl.No.355.
1.2. A Show Cause Notice dated 22-02-2005 was issued to the appellant disputing the classification of the WISMO under CTH 8473 21 00 and proposing that the same shall be classifiable under CTH 8517 90 attracting a concessional rate of 10% Basic Customs Duty (BCD) as available at Sl.No.359 of the Notification 5/2004-Cus.dated 08.01.2004, as amended. Based on proposed re-classification, a duty of Rs.39,27,578/- was proposed to be demanded against the appellant and the amount of Rs.31,09,643/- already paid by them proposed to be adjusted against the above said duty demand. There were also proposals to demand interest under Section 28 AB of the Customs Act, and imposition of penalty under Section 114A of the Customs Act, 1962, for the alleged mis-classification.
1.3. After due process of law, the Commissioner of Customs, Hyderabad adjudicated the above said show Cause Notice vide Order in Original dated 25.05.2006. wherein, he has rejected the classification of WISMO under CTH 8473 21 00 and CTH 8529 90 90 but reclassified the product under CTH 8517 90, with applicable rate of duty @ 10% BCD as per Sl.No.359 of Notification No.5/2004-Cus dated 08.01.2004, confirmed the demand of duty of Rs. 39,27,578/- and adjusted the amount of Rs.31,09,643/- already paid by the appellant, further confiscated 1000 Nos. of WISCMO valued on Rs. 22,84,474/- imposed a redemption fine of Rs.2,28,447/- of the demanded appropriate interest of the and further imposed a penalty of Rs.39,27,578/- . Hence this appeal.
2.1. Today when the matter came up for hearing, learned counsel for the appellant Shri G. Natarajan submitted that classification of impugned products under CTH 8517 90 is without basis. He further submitted that the said items have no application to any instrument under line telephony / telegraphy, whatsoever, and hence cannot be considered as part / equipment / apparatus classifiable under CTH 8517,but are rightly classifiable under CTH 8529 90 90 as parts suitable for use solely / principally with the apparatus of heading 8525 to 8528.
2.2. He further submitted that the matter stands covered by the decision of Tribunal in the case of Linkwell Telesystems (P) Ltd. Vs. CC&CE, Hyderabad-II [2010(249) ELT 419 (Tri. Bang.)].
3. On behalf of the Department, learned AR Shri Nagraj Naik reiterated the findings in the impugned order.
4. Heard both the sides and have gone through the facts of the case. We find that the matter is indeed settled and covered by the Linkwell Teleshystems case cited supra, wherein the Tribunal, inter alia, observed as under:-
7.?We have gone through the records of the case carefully. The equipment WISMO has been imported by the appellant. WISMO itself stands for Wireless Standard Module. Information about this product is available in the Internet. It is seen that WISMO is a ready to use solution for wireless communication. It contains all the digital, base band and radio frequency hardware and software for a complete wireless solution. The Commissioner, in the impugned order, has classified the item under 85.17 which reads as follows :-
Electrical apparatus for line telephone or line telegraphy, including line telephone sets with cordless handsets and telecommunication apparatus for carrier current line systems or for digital line systems : Videophones
Tariff entry 8517.90 read as under :
8517.90
- -
Parts
8517 90 10
- -
Populated, loaded or stuffed printed circuit boards
8517 90 90
-
Other 7.1?The Commissioner has come to the conclusion that the impugned item is used in line telephone or line telegraphy. There is no proper reasoning given in the impugned order. The contention of the appellant is that the impugned item is classifiable under 85299090. The said entry is reproduced below :
8529
- - -
Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528 8525 90
- - -
Other 8529 90 10
- - -
For communication jamming equipment 8529 90 20
- - -
For amateur radio communication equipment 8529 90 90
- - -
Other In our view, the classification above appears to be more appropriate as the WISMO Modules are used in wireless applications and also with the apparatus of heading 8525 which reads as follows :-
8525 : Transmission apparatus for radio-telephony, radio-telegraphy, radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras and other video camera recorders; digital cameras.
There are two ways of sending the signals. One is through wires. The other way of sending the signal is using the wireless mode. Since WISMO is a Wireless Standard Modules, we cannot accept the contention of the Revenue that the same is used in line telegraphy. It is stated that WISMO operates in a GSM/CDMA environment. This has also applications in cellular phones, which are coming under Chapter 8525. There is no indication anywhere that the said product has applications in line telephony. Even in the cross examination Shri D. Madhusudanan, Director of ECIL, has stated that the product is a GSM trans-receiver with transmission and receiving capability. In these circumstances, we are of the view that the classification of the impugned product would be under CTH 85299090.
7.2?The Commissioner has invoked the longer period and tried to justify the same. The Department itself was not sure of the classification of this product. Initially, the goods were classified under 8473 on the advice of the Department. It was stated that first the importers classified the item under 8529 and on insistence of the department, it was changed to 8473 and later; the department has taken a stand to classify the item under 8517. In order to justify the classification under 8517, the Department has relied on Note 2(b) of Section XVI of the Customs Tariff Act. The appellant has shown that the impugned item has no application in line telephony. Only parts which are suitable equally for both line telephony (8517) and wireless/radio telephony (8525) are classifiable under 8517 under Note 2(b) of Section XVI. When the product has no application in line telephony, this note cannot be pressed into service to classify the item under 8517. Therefore, the appellants prayer for classifying the item under 85299090 is accepted. Consequently, the impugned order is set aside. There is no justification in confiscation of the impugned item. However, the duty payable would be under 85299090 under concessional rate of 5% under Notification No. 21/2002 [Sl. No. 321(ii)]. Thus we allow the appeal.
5. Relying on the aforesaid decision, we are of the considered opinion that the impugned items would be correctly classifiable under CTH 8529 90 90. Appeal is therefore allowed with consequential reliefs, as per law.
(Operative part of this order was pronounced in court on conclusion of the hearing) (MADHU MOHAN DAMODHAR) MEMBER(TECHNICAL) ( SULEKHA BEEVI, C.S.) MEMBER(JUDICIAL) Raja..
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