2005 (5) TMI 104 - AT - Customs

Summary

Issues:
Appeal against OIA No. 121/03 - Benefit of exemption under Notification 11/97-Cus. - Classification of Radio Terminals as BTS or BTS ancillary equipment.

Analysis:
The case involved an appeal against OIA No. 121/03, challenging the denial of the benefit of exemption under Notification 11/97-Cus. for imported Radio Terminals. The appellants argued that the Radio Terminals played a crucial role in connecting Base Trans-receiver Stations (BTS) with the main switching center, enabling signal transfer to mobiles. The original authority and the Commissioner (Appeals) rejected the refund claim, stating that Radio Terminals were not classified as either BTS or BTS ancillary equipment but were considered part of the cellular network. The appellants contended that the imported Radio Terminals should be treated as BTS ancillary equipment or at least as parts of BTS. The technical literature presented by the appellants supported the argument that Radio Terminals were essential for interconnectivity in the Cellular Telephony System.

The Tribunal examined the technical aspects of Cellular Network Services, emphasizing the use of microwaves for cellular communications and the specific frequency levels allocated for Global System of Mobile (GSM) Communications. It was highlighted that microwave equipment required appropriate licensing and configuration within specified frequency levels to prevent interference. The Tribunal explained the interconnectivity in cellular telephony, where Radio Terminals played a vital role in linking various components like BTS, BSC, and MSC. The technical literature demonstrated that Radio Terminals and antennas were ancillary equipment for BTS, facilitating the transport of digital speech and control information between equipment. Without Radio Terminals, interconnectivity between various components in the Cellular Telephony System would not be possible, rendering the system non-functional.

Based on the technical analysis and the role of Radio Terminals in ensuring interconnectivity within the Cellular Telephony System, the Tribunal concluded that Radio Terminals should be considered as BTS ancillary equipment and granted the benefit of the exemption notification. The Tribunal noted that the Delhi Customs House had already provided the benefit of the exemption notification on similar items, further supporting the appellants' claim. Consequently, the Tribunal set aside the orders of the original authority and the Commissioner (Appeals), allowing the appeals in favor of the appellants.