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TMI Blog2017 (2) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... ? Held that: - u/r 2(a) of the General Interpretative Rules supra, SIM as imported, is liable to be treated as a finished 'SIM card'. Denial of benefit of exemption notification on the ground that it is not card but a mere precursor to card would create an anomalous situation. SIM embedded in a card with a personalization, imported from abroad would be eligible for the exemption notification. On the other hand, the bulk of the 'SIM cards’ sold in the market, also imported and subject to personalization in India for different mobile service providers, would render the goods liable to additional duty. The coverage of sl.no.22(1) of N/N. 06/2006-CE supra would be available only to mobile service operators, who either import the embedded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of personalization software such as, integrated certificate card identifier number, integrated mobile subscriber identity, authentication key, local area identify and passwords. These embedded cards are then supplied to their customers viz. Mobile service providers. 2. Of the 107 bills of entry for the SIM on reels, the extended period was invoked for recovery of short-paid duty against bill of entry no.630725 dated 9 th June 2008. Twenty nine bills of entry had been assessed finally during the period from 20 th August 2007 to 5 th February 2008 and, on these, the differential duty was demanded under section 28 of the Customs Act, 1962. A further 77 bills of entry for the period from 4 th march 2008 to 14 th September 2009 had be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mounted on plastic of the prescribed size at the time of import. It was also argued that the said item is not usable as a card without embedding and personalization; till such is executed, the imported items are 'integrated circuits' which are non-functional. Consequently, the goods cannot claim entitled to be classified under heading 8523 and, therefore, the benefit of exemption of additional duty of customs is not available. On behalf of the appellant, it is contended that heading 8523 comprises both 'solid-state non-volatile devices' and smart cards. It is also contended that note 8 in chapter 85, dealing with the heads 8541 and heading 8542 directs that, in classifying articles covered by descriptions therein, these hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the physical appearance of the 'integrated circuit' loaded with the operational software. This would be its nomenclature with or without embedding in a card and personalization thereon. 8. From the explanation given in note 8 of chapter 85, it would appear that diodes, transistor and similar semi-conductor devices, as well as electronic integrated circuits, would invariably be classified under 8541 and 8542 respectively except where they can be classified under 8523 owing to functionality. A perusal of heading 8523 indicates that the tapes, disks, smart cards and other storage media are intended to be covered. Therefore, an electronic integrated circuit that is a smart card is classifiable under heading 8523. 9. Reliance has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alization are necessary for making the sample as a smart card is relied on. According to Revenue all these aspects render the SIM to be other than smart cards' and the declaration that they are 'smart cards' were motivated by exemptions available since 2007. 10. We are not in a position to give due credence to the opinion rendered by the Indian Institute of Technology, Madras because of the various qualifying phrases employed in the clarification dated 7 th February 2008 rendering it to be unacceptable as specific and unqualified. Hence the credibility that is usually accorded to scientific conclusions is not merited here. Like-wise, the opinion of M/s Indian Telephone Industries Ltd, a rival importer, cannot be said to l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the appropriate slots in a mobile device and using the radio frequency of the device enables the device to communicate with the operating mechanism of the mobile service provider. Consequently, these are 'smart cards'. The imported goods would be useful as such save that, owing to multiplicity of mobile service provider. it is necessary to provide the distinction among them. Personalization, therefore, provides a finishing touch to the 'SIM card' in the context of the telecom licencing policy of the government. Under Rule 2(a) of the General Interpretative Rules supra, SIM as imported, is liable to be treated as a finished 'SIM card'. Denial of benefit of exemption notification on the ground that it is not card ..... X X X X Extracts X X X X X X X X Extracts X X X X
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