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2023 (12) TMI 16 - AT - CustomsClassification of imported goods - G-24 PL 001 GSM Chipset Wavecom (modem) - to be classified under chapter Heading 8517 6230 or under Chapter Heading 8537 1000? - HELD THAT - There is no dispute that the items imported are a programmable processor mounted on a printed circuit board. The Commissioner (Appeals) s classification under Chapter Heading 8517 is misplaced in as much as this Chapter includes Telephone sets, smartphones and other telephones for cellular networks or for other wireless networks; other apparatus or 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 - It is a settled fact that the principles of classification endorses that any classification should be based on the description and function of an item as it is imported and not based on its end-use as held by the Supreme Court in number of cases. The HSN Explanatory Notes to Chapter Heading 8537 states that this heading covers programmable controllers which are digital apparatus using a programmable memory for the storage of instructions for implementing specific function such as logic sequencing, timing, counting and arithmetic to control through digital or analogue input/output modules, various types of machines . It is also a fact that the appellant are manufacturers of electric metre and their products are classifiable under chapter heading 90283010 and it is also an admitted fact that these impugned goods are used in automatic metering system. Therefore, Commissioner (Appeals) justification for classification under Chapter Heading 8517 as part of modem is inappropriate. Since programmable controllers are specifically covered under Chapter Heading 8537, they are rightly classifiable under this Heading and not under Chapter Heading 8517 as part of modem - the imported item viz., G-24 PL 001 GSM Chipset Wavecom (modem) are rightly classifiable under Chapter Heading 8537. The impugned order is set aside - the appeal filed by the Revenue is allowed.
Issues involved:
Classification of imported goods under Chapter Heading 8517 or 8537 based on their description and function. Summary: The respondent imported G-24 PL 001 GSM Chipset Wavecom (modem) classified under Chapter Heading 8517 6230, but the Original Authority classified them under Chapter Heading 8537 1000. Commissioner (Appeals) classified the items under Chapter Heading 8517 based on the end-use in manufacturing modems. The Department appealed against this classification. The Revenue argued that the goods should be classified based on their description and function as imported, not their end-use. They contended that the items were rightly classified under Chapter Heading 8537 by the Original Authority. The respondent claimed that the goods should be classified under Chapter Heading 8517 as networking equipment used in manufacturing modems. They argued that Chapter Heading 8537 does not align with the description of the imported goods. After hearing both sides, it was established that the imported items were programmable processors mounted on printed circuit boards. The principles of classification dictate that items should be classified based on their description and function as imported, not their end-use. The Supreme Court precedent was cited to support this principle. The HSN Explanatory Notes clarified that programmable controllers fall under Chapter Heading 8537. The Board's Circular also classified programmable logic controllers under Chapter Heading 8537. Based on these findings, the imported items were rightly classified under Chapter Heading 8537. Therefore, the impugned order was set aside, and the appeal by the Revenue was allowed.
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