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2024 (4) TMI 972 - AT - CustomsClassification of imported goods - Small Form-factor Pluggable (SFP)-25G-SR Optical Transceiver - SFP-10G-SRL Optical Transceiver - QSFP-10G-UNIV Optical Transceiver, etc. - classifiable under Customs Tariff Item (CTI) 8517 6290 or not - exemption/ duty concession under Notification No.57/2017-Customs dated 30.06.2017 (Sl. No.20), as amended - HELD THAT - It is found that imported goods under dispute have been declared with complete description as Small Form-factor Pluggable (SFP) - Optical Transceiver of various models and notification benefit under Sl. No.20 of Notification No.57/2017-Customs dated 30.06.2017 was claimed for concessional Basic Customs Duty (BCD) of 10%. However, as the proper officer was not convinced with the justification given by the appellants, the impugned goods were re-assessed at merit rate of 20% BCD by denying the notification benefit and the same were appealed against before the Commissioner of Customs (Appeals). On careful reading of the impugned order passed by the learned Commissioner of Customs (Appeals), it transpires that he has given a specific finding that the impugned goods fall under the category of Optical transport equipment . In coming to such conclusion, he had referred to the description of the imported item Transceiver incorporates transmitter and receiver and thus it is an equipment for optical transportation. Accordingly, he has concluded that since these are optical transport equipment, the benefit of customs duty exemption in the exemption entry at Sr. No.20 of the Notification No. 57/2017-Customs dated 30.06.2017 is not applicable to the impugned goods. Since the impugned goods are neither telephone sets under (i) above, nor an apparatus/independent machine for transmission or reception of voice, images or other data, under second group of items mentioned in (ii) above, and are also not covered as specified part under CTI 8517 7010 viz., Populated, loaded or stuffed printed circuit boards , these are specifically covered under the CTI 8517 7090 as other parts . The product under consideration i.e., Small Form-factor Pluggable Optical Transceiver of various models are classifiable under Customs Tariff Item (CTI) 8517 7090, and not under CTH 8517 62 90, as claimed by Revenue. Accordingly, the impugned goods are eligible for exemption/duty concession under Serial No. 5(a) of Notification No. 57/2017-Customs dated 30.06.2017, as amended. Therefore, the impugned order passed by the learned Commissioner (Appeals) in confirmation of the adjudged demands in the original order cannot be sustained on merits. The appeal is allowed in favour of the appellants.
Issues Involved:
1. Eligibility of imported goods for exemption/duty concession under Notification No. 57/2017-Customs. 2. Classification of the imported goods under the appropriate Customs Tariff Item (CTI). 3. Confiscation of goods and imposition of penalties under relevant sections of the Customs Act, 1962. Summary: Issue 1: Eligibility for Exemption/Duty Concession The appellants, M/s IBM India Limited, contested the denial of concessional duty under Notification No. 57/2017-Customs dated 30.06.2017 (Sl. No.20) for goods described as 'Small Form-factor Pluggable (SFP)-25G-SR Optical Transceiver, SFP-10G-SRL Optical Transceiver, QSFP-10G-UNIV Optical Transceiver, etc.'. The Department argued that these goods did not qualify for the exemption, leading to a demand of differential customs duty of Rs.36,16,445/- u/s 28(1) of the Customs Act, 1962, along with applicable interest, and proposed confiscation and penalties under Sections 111(m), 112(a), and 117. Issue 2: Classification of Imported Goods The appellants classified the goods under CTI 8517 6290, claiming duty concession. However, they later argued that these goods should be classified under CTI 8517 7090, as upheld by the Tribunal in the Reliance Jio Infocomm Ltd. case and confirmed by the Supreme Court. The Tribunal found that the goods were parts of Optical Transport Equipment and should be classified under CTI 8517 7090, making them eligible for exemption under Sl. No. 5(a) of Notification No. 57/2017-Customs. Issue 3: Confiscation and Penalties The appellants contended that there was no fraud or deliberate suppression, and the goods were properly declared, thus not warranting confiscation or penalties u/s 111. The Tribunal did not find sufficient grounds for confiscation and penalties, given the proper declaration of goods and lack of fraudulent intent. Conclusion: The Tribunal concluded that the imported goods are classifiable under CTI 8517 7090 and eligible for exemption under Serial No. 5(a) of Notification No. 57/2017-Customs. The impugned order dated 27.01.2022 was set aside, and the appeal was allowed in favor of the appellants.
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