2021 (11) TMI 1105 - AAR - Customs

Classification of imported goods - Networking Device Model No. D5N83A - to be classified under sub-heading 8517 62 90 of the first schedule to the Customs Tariff Act, 1975 or not - HELD THAT - The product under consideration, therefore, appears to perform the function of reception, conversion and transmission in all three different scenarios. The first rule of interpretation of customs tariff is that goods under consideration should be classified in accordance with the terms of the heading or relevant section or chapter notes. Since, the applicant, as well as the Principal Commissioner/Commissioner of Customs of ACC (Import), Delhi; ACC (Import), Mumbai, ACC, Chennai; and Sea Port, Chennai all suggest that the Heading 8517 62 is an appropriate classification entry for the device under consideration. Tariff Item 8517 includes Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the 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), other than transmission or reception apparatus of Heading 8443, 8525, 8527 or 8528. . Considering the fact that the utility of the devices under consideration ultimately lies in their ability to provide content for view on a television set, the alternate tariff entry for these goods can be 8525 (TRANSMISSION APPARATUS FOR RADIO-BROADCASTING OR TELEVISION, WHETHER OR NOT INCORPORATION RECEPTION APPARATUS OR SOUND RECORDING OR REPRODUCING APPARATUS; TELEVISION CAMERAS, DIGITAL CAMERAS AND VIDEO CAMERA RECORDERS), was also examined, but rejected in view of the fact that the network devices under consideration do not transmit radio/video broadcast signals. Networking Device Model No. D5N83A is correctly classifiable under sub-heading 8517 62 90 of the first schedule to the Customs Tariff Act, 1975.

Summary

Issues: Classification of Networking Device Model No. D5N83A under the Customs Tariff Act, 1975.

Issue 1: Background and Application Process
The case involves an application for advance ruling regarding the classification of a networking device submitted to the Customs Authority for Advance Rulings, Mumbai. The applicant, M/s. Amazon Seller Services Private Limited, sought clarification on the classification of the device, which was initially received by the erstwhile Authority for Advance Rulings in New Delhi and later transferred to Mumbai due to pending issuance of ruling.

Issue 2: Description and Technical Specifications of the Device
The networking device in question integrates wireless networking capabilities and operates on specific frequency ranges. It contains various components such as a central processor unit, memory modules, and connectivity ports. The device functions independently, providing its own network for data access without relying on an existing Wi-Fi connection. It can retrieve data from its internal memory or other connected devices and is capable of connecting to an external network through a gateway node.

Issue 3: Classification Recommendations and Comments
The applicant requested the classification under a specific sub-heading and sought comments from Customs authorities at various locations. The Principal Commissioners/Commissioners of Customs from different regions provided their views, concurring with the applicant's classification suggestion under sub-heading 8517 62 90. The Commissioner of Customs, ACC, Chennai, though not providing written comments, agreed during the personal hearing.

Issue 4: Functional Analysis and Legal Interpretation
The device's functionality involves reception, conversion, and transmission of data through electromagnetic waves within a wireless network. The ruling authority analyzed the relevant tariff entry (8517) which covers apparatus for voice, image, or data transmission/reception. The explanatory notes to the Harmonized System Nomenclature (HSN) further clarified the scope of the tariff entry and the nature of covered apparatus. The ruling authority also considered international rulings and previous advance rulings to support the classification decision.

Issue 5: Ruling and Disposal of Application
After detailed examination and considering all aspects, the ruling authority concluded that the Networking Device Model No. D5N83A is correctly classifiable under sub-heading 8517 62 90 of the Customs Tariff Act, 1975. The advance ruling application of M/s. Amazon Seller Services Private Limited was disposed of based on this classification.

This comprehensive analysis of the judgment highlights the procedural history, technical details, classification recommendations, legal interpretation, and the final ruling outcome regarding the classification of the networking device under consideration.