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2022 (6) TMI 1051 - AT - CustomsClassification of imported goods - Cards (Populated Printed Circuit Boards) OSLM-5-100G-WL3N for DWDM Equipment-Photonic Service Switch (PSS) 1830 - classified under Customs Tariff Sub-heading 8517 7010 or under CTH 8517 62 90? - HELD THAT - On going through the relevant HSN notes, it is found that the apparatus or equipments referred in the notes are complete apparatus and not Populated Printed Circuit Boards of such apparatus. As submitted by the respondent the Network Interface Cards referred to in the notes are not PCB of any transmission or reception apparatus of heading 8517. Network Interface Cards connect the computers to the internet and therefore can be considered to have independent function. Going by the product literature and our discussions as above, it is found that the impugned cards are incorporated in and or parts of DWDM equipments. The Department could not support their contention. No technical literature was submitted; in spite of the fact that the imports have been taking place over a period of time. Learned Commissioner (Appeals) has been upholding the contention of the appellants. In one instance Revenue has accepted the order of Commissioner (Appeals). The Department has not drawn any samples and did not obtain technical opinion to support their claim that the impugned goods are complete machines or equipment capable of independent function themselves so as to merit classification under CTH 85176270. On the contrary, the respondents could demonstrate by technical literature; samples that the goods imported by them are Populated Circuit Boards (PCBs) used in PSS 1830 and therefore, the impugned goods are parts of PSS and as such merit classification CTH 85177010. Appeal dismissed - decided against Revenue.
Issues Involved:
1. Classification of imported goods under Customs Tariff Sub-heading. 2. Eligibility for exemption under Notification 57/2017. 3. Determination of whether the imported goods are parts or complete machines. Detailed Analysis: 1. Classification of Imported Goods: The primary issue revolves around the classification of "Cards" (Populated Printed Circuit Boards) imported by the respondent for DWDM Equipment-Photonic Service Switch (PSS) 1830. The respondent classified these under Customs Tariff Sub-heading 8517 7010. The Department reclassified them under CTH 8517 62 90. The Commissioner (Appeals) upheld the respondent's classification, stating that the goods are parts of Ciena's 5430 Packet Optical Switch and should be classified under CTH 8517 7010 as PCBs. The Department argued that the imported goods are various telecommunication devices used in optical communication, which should be classified under CTH 8517 62 90 as machines for the reception, conversion, transmission, or regeneration of voice, images, or other data, including switching and routing apparatus. The respondent countered that the imported goods are "Populated Printed Circuit Boards" and not complete machines. They argued that these boards are integral parts of the DWDM equipment and cannot function independently. The Tribunal agreed with the respondent, citing technical literature and previous judgments, concluding that the goods are parts of the Photonic Service Switch (PSS) 1830 and should be classified under CTH 8517 7010. 2. Eligibility for Exemption under Notification 57/2017: The Commissioner (Appeals) noted that all goods falling under CTH 8517 are exempt from Basic Customs Duty (BCD) unconditionally as per Notification 57/2017. The respondent argued that their classification under CTH 8517 7010 makes them eligible for this exemption. The Tribunal upheld this view, confirming that the goods are indeed parts of the DWDM equipment and thus qualify for the exemption. 3. Determination of Whether the Imported Goods are Parts or Complete Machines: The Department contended that the imported goods have independent functions and should be classified as complete machines under CTH 8517 62 90. However, the respondent provided evidence that the goods are parts of the DWDM equipment and cannot function independently. The Tribunal reviewed the technical literature and product descriptions, concluding that the goods are populated circuit boards and not independent machines. The Tribunal referenced several judgments, including the case of Modicom Network Pvt. Ltd. and N.I. Systems India P. Ltd., to support their decision that the goods should be classified as parts under CTH 8517 7010. The Tribunal also noted that the Department did not provide sufficient evidence to prove that the goods are complete machines. Conclusion: The Tribunal upheld the orders of the Commissioner (Appeals), rejecting the Department's appeals. The imported goods were classified under CTH 8517 7010 as parts of the DWDM equipment, making them eligible for exemption under Notification 57/2017. The Tribunal concluded that the goods are not complete machines but integral parts of the Photonic Service Switch (PSS) 1830.
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