2007 (8) TMI 139 - AT - Customs

Exemption The impugned goods imported by the appellant by availing exemption under Notification No. 21/2002-Cus. but department denied the exemption on the ground that the impugned goods didn t qualify for said notification Held that benefit of said notification available to appellant

Summary

Issues: Classification of imported goods under Customs Tariff Heading (CTH) 852520.19 vs. CTH 852520.92 for exemption eligibility under Notification No. 21/2002-Cus.

In this case, the appellants imported a Thuraya Satellite Phone and sought the benefit of exemption under Notification No. 21/2002-Cus. The dispute revolved around the correct classification of the item under CTH 852520.19 as claimed by the appellant or under CTH 852520.92 as argued by the department. The department contended that the item fell under "Other Satellite Communication Equipment," making it ineligible for the exemption. The lower authorities upheld this classification, leading to the denial of the exemption. The appellant challenged this decision.

During the proceedings, the appellant's advocate argued that the imported equipment, besides being a satellite communication device, also functioned as a GSM telephone, incorporating cellular phone features. The Tribunal reviewed technical literature supporting this claim and confirmed that the imported item indeed had dual functionality as both a satellite phone and a GSM phone. Therefore, even if classified under CTH 852520.92, which covers other satellite communication equipment, the item still fell under the broader category of cellular phones under CTH 852520. The Tribunal emphasized that the exemption notification covered "Cellular Phones and Radio trunking terminals," and since the imported item could function as a cellular phone, it was entitled to the exemption. The Tribunal concluded that the impugned goods qualified for the benefit of the notification, overturning the lower authorities' decision and allowing the appeal with consequential relief.

In summary, the key issue in this judgment was the classification of the imported Thuraya Satellite Phone under Customs Tariff Headings 852520.19 and 852520.92 for determining its eligibility for exemption under Notification No. 21/2002-Cus. The Tribunal ruled in favor of the appellant, recognizing the dual functionality of the imported item as both a satellite phone and a GSM phone, which made it eligible for the exemption as a cellular phone under the notification, regardless of the specific classification under the Customs Tariff.