2016 (11) TMI 223 - AT - Customs

Classification of imported goods - WISMO modules and connectors - classifed under CTH 8473 21 00 and avail the benefit of Notification No. 5/2004-Cus dated 08.01.2004 under Sl.No.355 or classified under CTH 8517 90 attracting a concessional rate of 10% Basic Customs Duty (BCD) as available at SI.No.359 of the Notification 5/2004 Cus.dated 08.01.2004, as amended - Held that - the issue is similar as decided in the case Linkwell Telesystems (P) Ltd. vs. CC&CE, Hyderabad-II 2009 (5) TMI 446 - CESTAT, BANGALORE and the decision apply where it was held that classifiable under Tariff item 8529 90 90 ibid and not under heading 85.17 ibid which relates to line telegraphy. The impugned items would be correctly classifiable under CTH 8529 90 90 - Benefit of concessional rate of duty under Notification No. 21.2002-Cus. is available. - appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of WISMO under Custom Tariff Headings (CTH) 8473 21 00, 8517 90, or 8529 90 90.

Analysis:
The appellant, a manufacturer of hand-held terminals, imported WISMO modules for manufacturing finished products. A Show Cause Notice disputed the classification under CTH 8473 21 00, proposing CTH 8517 90 with a concessional rate of 10% Basic Customs Duty. The Commissioner reclassified the product under CTH 8517 90, demanded duty, adjusted the paid amount, confiscated items, imposed a redemption fine, interest, and penalty. The appellant contested the classification under CTH 8517 90, arguing for classification under CTH 8529 90 90, citing a Tribunal decision in a similar case.

The Tribunal analyzed the classification issue, referring to the Linkwell Telesystems case, where WISMO was considered a Wireless Standard Module for wireless communication, not for line telephony. The Commissioner's classification under CTH 8517 90 was deemed incorrect. The Tribunal agreed with the appellant's argument for classification under CTH 8529 90 90, suitable for use with apparatus under headings 8525 to 8528, involving wireless applications. The Tribunal noted the Department's uncertainty in classification, reliance on Note 2(b) of Section XVI, and the appellant's demonstration of WISMO's inapplicability to line telephony. The Tribunal set aside the impugned order, allowing the appeal for classification under CTH 8529 90 90 at a concessional rate of 5%.

In conclusion, the Tribunal allowed the appeal, classifying the WISMO under CTH 8529 90 90, emphasizing its wireless applications and overturning the Commissioner's classification under CTH 8517 90. The decision was based on the Tribunal's interpretation of the product's functionality and suitability for wireless communication, in line with the appellant's arguments and the Linkwell Telesystems case.