2017 (11) TMI 952 - AT - Customs

Classification of imported goods - Parts of International Private Leased Circuit (IPLC) Lawful Interception Monitoring (LIM ) Networking System - whether classified under CTH 85176990 or under CTH 85437099? - Held that - when connected to the network of voice or data transmission, these equipments are capable of receiving, recording and storing all kinds of communications, voice, image, data between the subscribers. We note the equipments enable the network operator to virtually receive all such communication by such interception and record the same for future analysis. Without reception of these signals no useful purpose can be served by these equipments. The Commissioner (Appeals) erred in factual finding. He recorded that the machines imported have no mechanism for reception of information. This is not factually correct. The equipments now under consideration are more in the nature of telecommunications, auxiliary equipments which are part and parcel of network for voice or data transmission and distribution. Accordingly, the classification as claimed i.e. under CTH 85176990 by the appellant is more appropriate than what is held by the lower authorities - appeal allowed - decided in favor of appellant.

Summary

Issues: Classification of imported items under CTH 85176990 or CTH 85437099

In this judgment by the Appellate Tribunal CESTAT CHENNAI, the appellant imported items described as "Parts of International Private Leased Circuit (IPLC) Lawful Interception Monitoring (LIM) Networking System" and claimed classification under CTH 85176990. The Revenue contested this classification and sought to classify the items under CTH 85437099. The lower authorities confirmed the Revenue's classification, resulting in a differential customs duty being imposed.

The appellant argued that the imported telecommunication equipment was capable of intercepting voice and data transmission for further analysis. They contended that the equipment could receive voice or data signals for storage and analysis, contrary to the findings of the Commissioner (Appeals). The appellant highlighted that the equipment was specifically intended for interception and reception of voice or data communication by electronic means, making it more appropriate for classification under CTH 85176990.

The Revenue, on the other hand, argued that the equipment was not intended for receiving telecommunication data but rather used in exchanges for transmitting voice or data communication. They claimed that the equipment had specific functions not covered by Heading 85.17, which pertains to telephone sets and wireless networks. The Revenue asserted that the equipment under consideration was not used for the transmission or reception of voice or data.

After hearing both sides and examining the technical literature submitted by the appellant, the Tribunal noted that the imported items were capable of receiving, recording, and storing various types of communications between subscribers when connected to a network of voice or data transmission. The Tribunal found that the equipment enabled the network operator to intercept and record communications for future analysis, emphasizing the importance of reception in the equipment's functionality. The Tribunal concluded that the equipment fell more in line with being auxiliary telecommunications equipment, part of the network for voice or data transmission and distribution, supporting the appellant's classification under CTH 85176990. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief as per law.