2015 (10) TMI 1287 - SC - Customs

Payment of Differential Duty Assessee imported imported Base Transreceiver Station (BTS) along with Antenna and Installation Cable Revenue contends that Serial No. 239 of Notification No. 21 of 2002 does not cover Antenna and installation cable so imported thus Appellant is liable to pay differential duty. Held That - Definition of BTS in Wiley Encyclopedia of Electrical and Electronics Engineering specifically mentions that the same is inclusive of Antenna - Antenna becomes an integral and inseparable part of the BTS without which it cannot even function Differential duty not to be paid - Appeal lacks merit Disposed in favour of the assessee.

Summary

Issues:
- Interpretation of Notification No. 21/2002 regarding duty rates for imported goods.
- Whether Antenna and installation cable are integral parts of Base Transreceiver Station (BTS) equipment.
- Applicability of duty rates for Antenna and installation cable when imported along with BTS equipment.

Interpretation of Notification No. 21/2002:
The case involved the interpretation of Notification No. 21/2002 regarding the duty rates applicable to imported goods. The respondent, engaged in the business of telecommunication systems, imported BTS equipment and claimed a concessional duty rate of 5% under Serial No. 239 of the notification. However, the Revenue contended that Antenna and installation cable imported along with the BTS were not covered under Serial No. 239, attracting a higher duty rate of 10%. The Adjudicating Authority upheld this view, leading to an appeal by the assessee.

Integral Parts of BTS Equipment:
The main contention revolved around whether Antenna and installation cable were integral parts of the BTS equipment. The Adjudicating Authority held that these components were not covered under Serial No. 239 of the notification. In contrast, the CESTAT ruled in favor of the assessee, stating that Antenna and installation materials were integral parts of the BTS and could not be segregated for duty assessment purposes. The Tribunal defined BTS equipment from technical dictionaries to support its conclusion.

Applicability of Duty Rates:
The Supreme Court analyzed the definitions and functions of BTS equipment, emphasizing that Antenna was an inseparable part of the BTS without which it could not function. While Entry No. 317 of the notification listed Antenna separately with a 10% duty rate, the Court noted that when Antenna was imported along with the entire BTS equipment as one unit, it fell under a different duty category. The Court dismissed the Revenue's appeal, affirming that Antenna and installation cable, when imported as integral parts of the BTS equipment, should be assessed under the concessional duty rate applicable to the BTS.

In conclusion, the Supreme Court upheld the CESTAT's decision, ruling that Antenna and installation cable were integral parts of the BTS equipment and should be assessed under the same duty category as the BTS. The judgment clarified the interpretation of Notification No. 21/2002 and highlighted the technical definitions supporting the inseparability of Antenna from the BTS.