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TMI Blog2019 (11) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... apparatus for radio telephony under heading 8525 8527 was specifically covered as parts under 8527 of CTA,1975. After 01.01.2007 the instruments for radio telephony/mobile network, Apparatus for reception transmission, and parts have been placed under one heading i.e 8517 of CTA, 1975. Revenue continued classification of Antenna for mobile network as parts accepting its classification under 85177090 post 01.01.2007. A simple analysis of heading 8517 effective from 01.01.2007, it is clear that the instruments/telephone sets for cellular networks/wireless net works, apparatus both for transmission and reception of voice, images or other data in a wired or wireless network, and parts classified under the said heading broadly placed under three categories of single dash(-). First single dash(-) for telephone sets, including telephones for cellular network or for other wireless network; second single dash (-) for other apparatus for transmission or reception of voice, images, or other data including apparatus for communication in wired or wireless network (such as local or wide area network); and the third single dash(-), for parts . The base station is classified und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The correct classification of the Antenna for base station is under Sub-heading 85177090 as parts - Since, the main issue of classification has been addressed, the other ancillary/alternative submission/issues on the eligibility of various exemption notifications issued in support of the classification of the said goods, becomes more of academic, hence not analysed. Appeal dismissed - decided against Revenue. - Customs Appeal No.85882 of 2018, 85883 of 2018 - A/87015-87016/2019 - Dated:- 6-11-2019 - HON BLE DR. D.M. MISRA, MEMBER (JUDICIAL) AND HON BLE MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) For Appellant: Shri K.M. Mondal, Special Counsel, Shri R. Kapoor, Pr.Commr. (AR) For Respondent: Shri J.C. Patel, Shri Vipin Jain - Advocates ORDER PER: DR.D.M. MISRA These two appeals filed by the Revenue against respective Orders-in-Appeals passed by the Commissioner of Customs (Appeals), Mumbai, since involved common issues, are taken up together for disposal. 2. Briefly stated the facts of the case are that the Respondents during the period May 2017 to August 2017 imported Antenna for Base Transmission Station(BTS) declared the same as parts cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of the base station. 5. It is the Revenue s contention that in view of the Board s Circular No.01/2018 dt.15.1.2018 that the antenna is a completer device with specified function i.e. conversion of electrical signal into electro-magnetic waves and vice versa in a wireless communication system, hence appropriately classifiable under CSH 85176290 by virtue of Section Note 2(a) of Section XVI of CTA,1975. Sub-Heading 85176290 covers others under broad description of the goods Machine for the reception, conversion and transmission or re-generation of voice, images for the data, including switching and routing apparatus against the six digit heading 851762. In the Board s instructions, reference has been made to Rules 1 and 6 of the General Rules for Interpretation of the Import Tariff. As per Rule 1, for legal purposes classification shall be determined according to the terms of the headings and any relative section or chapter note and provided such heading or note, do not otherwise required. As per Rule 6, the classification of goods under sub-heading of a heading shall be determined according to the term of those sub headings and any related sub heading note and mutatis-mut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be determined by application of general interpretative rules. It is submitted that antenna under heading 8529 and that 8517 are not one and the same. Notification does not prescribe that all kinds of antenna irrespective of their classification will be exempted from the whole of duty of Customs and/or education cess. 9. On the issue of maintainability of the appeal, the learned Special Counsel submitted that there has been Note Sheet Order where under the review committee arrived at the conclusion for review and authorised for filing of the appeal, which is sufficient compliance with the relevant provision for filing Appeal under the Customs Act as held by Hon'ble Supreme Court in the case of Collector of C.E. Vs. Berger Paints India Ltd 1990 (47) ELT 210 (S.C.). 10. The learned A.R.(Commissioner) for the Revenue Shri Roopam Kapoor, reiterating the grounds of appeal raised a preliminary issues. He has submitted that there has been gross violation of the principles of natural justice as the learned Commissioner (Appeals) afforded only one opportunity of hearing and there is no representation from the Department. 11. The ld. A.R has submitted that the findings of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nes in Chapter 851762. Further, referring to the literature of antenna placed during the course of hearing, the learned A.R. for the Revenue has submitted that the antennas are capable of being used across the spectrum of new and evolving technologies of 4G, LTE and 5G wireless generation and thus have evolved to be sophisticated machine rather than just magnetised bars of metal. 13. Assailing the impugned order, the learned A.R. has submitted that the compatibility of Antenna with the base station cannot be the basis for its classification. It is submitted that a base trans-receiver as well as antenna work independently which are compatible to each other and it cannot be said that the antenna is a part of base station as per the provisions of CTA. Even the learned Commissioner (Appeals) admits that these are fitted together and not in BTS. The certificate of Assistant Wireless Advisor produced reveals that GSM, Micro-wave, antennas are passive element and work in conjunction with the trans-receiver. It was further submitted that the antenna only works in conjunction with BTS but cannot be treated as a part of BTS. It is further submitted that BTS also only transmits air waves, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... graphy and similar equipments only are classifiable under CH 8529. Therefore, the observation of the learned Commissioner (Appeals) that it is the intention of the Government of India, is incorrect, particularly when viewed in the context of the Judgment of Hon ble Supreme Court in the case of CC Vs. M/s Dilip Kumar Company Ors.- 2018-TIOL-302-SC-CUS-CB. 17. Per contra, the learned Advocate for the Respondent, answering to the preliminary objection raised by the learned A.R. for the Revenue, in Appeal No.C/85883/2018 submitted that there has been no violation of principles of natural justice nor the said grounds have been taken by the Revenue in their grounds of appeal based on the review of the Committee of Chief Commissioners. The learned Advocate has submitted that the personal hearing notice was granted by the Commissioner to both the parties. In support, he has referred to the intimation of personal hearing enclosed with the appeal filed by the Respondent dt.07.05.2019. Also, he has submitted that as a prevalent practice, the learned Commissioner (Appeals) despatched a copy of the appeal to the Department soliciting their response. The Department has not filed against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, he has submitted that in view of the decision of Hon'ble Supreme Court in the case of Priya Blue Industries 2004 (171) ELT 145 (SC), even though the duty was paid under protest, unless appeal has been filed against the order of assessment, refund claim held to be inadmissible. Further, he has submitted that Hon ble Bombay High Court in the case of Karan Associates - 2009 (236) ELT 23 (Bom.) has held that the assessment on the bill of entry is an appealable order even in absence of a speaking order of an assessment. It is his contention that when the Deputy Commissioner chose not to pass a speaking order of assessment, the Respondent had no choice but to approach the learned Commissioner (Appeals), challenging the said assessment. 19. Advancing their argument on merit, the learned Advocate has submitted that antenna is a part BTS and the Customs tariff itself has recognized antenna as part and not a complete apparatus for reception, conversion and transmission of data. He has submitted that prior to 2007, the heading 85.17 covers only apparatus for line telephony and did not cover any radio telephony. The transmission apparatus of radio telephony was covered under Chap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section XVI overlooks the fact that --' entry of machine itself appears under the -' entry viz. other apparatus for transmission or reception of voice, images or other data including apparatus for communication in wired or wireless network such as local or wide area network . It is their contention that for any goods to fall under any of the sub heading of Chapter 8517.62, it must be first apparatus for transmission or reception of voice etc. He has argued that the very fact that prior to 2007, the tariff did not treat the Antenna as apparatus for transmission or reception of data but considered it as parts of apparatus, would itself show that the antennas are not apparatus for transmission or reception of data but merely parts of such apparatus. Further, he has submitted that the expression machine means any machine, machinery, plant, equipment, apparatus or appliance, and nowhere any of the heading of Chapter 84 or 85, antenna is cited as machine/machinery, equipment, apparatus or appliance. 23. The learned Advocate has further submitted that the Notification No.69/2004-Cus, dt.09.07.2004 as amended by Notification No.18/2007-Cus, dt.22.02.2007 conclusively estab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y notification and circular which is contrary to a statutory notification can have no effect in law. In support, the learned Advocate refers to the judgment of Hon'ble Supreme Court in the case of Sandur Micro Circuits Ltd Vs CCE 2008 (229) ELT 641 (SC), Microland Ltd Vs CC 2017 (357) ELT 988, and Hindustan Unilever Ltd Vs CCE 2010 (250) ELT 92. Further, the learned Advocate referring to the judgment of Hon'ble Supreme Court in the case of CCE Vs Minwool Rock Fibres Ltd 2012 (278) ELT 581 (SC), argued that the circulars/instructions issued by the Board are not binding on Assessee/Quasi-judicial authority/Court. The learned Advocate has further submitted that the HS Committee in its 62ndsession held that Antenna for base stations are classifiable as parts under Heading 8517.70 and not complete machine or apparatus. The Hon'ble Delhi High Court in the case of Manisha Pharma Plasto Pvt. Ltd. 1999 (112) ELT 22 held that the opinion of the HS Committee carries a lot of weight and should ordinarily be taken as binding since the very name of the Committee suggests that it is meant to harmonize the conflicting interpretation of products and formulae in the member coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Notification No.25/2005-Cus, dt.01.03.2005, which has been upheld by the learned Commissioner (Appeals) in the impugned order but not challenged by the Revenue in the present appeal. It is his contention that even though Sr.No.15 mentions tariff heading 8529.10, the antenna in question satisfied the description of the goods given in the said notification. Even though since 2007, Antenna of a kind used with apparatus for radio telephony, taken out of Heading 8529.10 and placed under Heading 8517, the exemption continue to mention 8529.10 under a mistake. Such mistake cannot be ground to deny them the benefit of notification in view of the judgment of Hon ble Supreme Court in the case of Jain Engineering Co. Vs CC 1987 (32) ELT 2 (SC), Johnson Johnson Ltd Vs CCE 1997 (92) ELT 23 (SC), Silvassa Machines Vs CC 2017 (349) ELT 176. Further rebutting the argument of the learned A.R. for the Revenue that the Commissioner (Appeals) erred in extending the benefit of exemption notification which was not claimed in the Bills of Entry, the learned Advocate has submitted that it is a settled law that benefit of exemption notification can be claimed at any stage of proceedings, as hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther, a double dash level, it is squarely covered by the heading 8517 62 Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus . 4. The classification of parts of the Goods of Chapter 85 is governed by rules enumerated in Section Note 2 of Section XVI read with General Explanatory Notes to this Section Note. According to Rule (a), parts which are goods included in any of the heading of Chapter 84 or 85, are in all cases to be classified in their respective headings. 5. In other words, the parts which in themselves constitute an article covered by a heading of this section, in all cases are to be classified in their own appropriate heading even if specially designed to work as part of a specific machine. 6. Goods under consideration would fall under CTH 85177090 as a part of the machine/apparatus classifiable under 8517, only in the situation when it is not covered by any other heading of the section. 7. By applying General Rules for Interpretation 1 6, Antenna used at Base Trans-receiver Station/NodeB/eNodeB in a Wireless Telecommunication Network, merits classification und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that a copy of the appeal has been endorsed to the Department by the learned Commissioner (Appeals); no written submission was filed by the department in response to the said Appeal, nor any request for a personal hearing or adjournment of the hearing scheduled had been advanced. Besides, it is also argued that the relevant provision under the Customs Act the Rules made there under mandates to extend personal hearing to the appellants and not to the respondents, and the argument of at least three adjournments of the personal hearing prescribed under the Act is only the upper cap and depends on the circumstances of each case, and not adjourning the matter invariably for three times in all cases will not result into violation of the principles of natural justice. 35. We find merit in the contention of the Ld. Advocate for the Respondent. It is a normal practice before the Commissioner (Appeals) that the personal hearing is extended to the Appellantassessee when an appeal is filed by the Assessee, the department is served with copy of the Appeal to submit their reply to the Appeal and in the event they intend to be heard, such request is made accordingly in filing their written ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pse on the development (changes) brought into the said tariff heading 8517 and related tariff entry 8525, 8527 8529 of CTA 1975. Before 01.01.2007: 8517 Electrical apparatus for line telephony or line telegraphy, including line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems; videophones - Telephone sets; videophones: 8517 11 -- 8517 11 10 --- Push button type u Free - 8517 11 90 --- Other u Free - 851719 -- Other u Free - --- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plexer, statistical multiplexer u Free - --- Other: u Free - 8517 50 91 ---- ISDN terminals u Free - 8517 50 92 ---- ISDN terminal adapters u Free - 8517 50 93 ---- Routers u Free - 8517 50 94 ---- X25 pads u Free - 8517 50 99 ---- Other u Free - 8517 80 - Other apparatus: u Free - 8517 80 10 --- Attachments for telephones. u Free - 8517 80 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : u 12.5% - --- Two way radio communication equipment: u Free - 8525 20 11 ---- Walkie Talkie set u Free - 8525 20 12 ---- Cordless handset u Free - 8525 20 13 ---- Car telephone u Free - 8525 20 14 ---- Transportable telephone u Free - 8525 20 15 ---- Marine radio communication equipment u Free - 8525 20 16 ---- Amateur radio equipment u Free - 8525 20 17 ---- Cellular telephone u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12.5% - 8527 21 00 -- Combined with sound recording or reproducing apparatus u 12.5% - 8527 29 00 -- Other u 12.5% - - Other radio-broadcast receivers, including apparatus capable of receiving also radio-telephony or radio-telegraphy: u 12.5% - 8527 31 00 -- Combined with sound recording or reproducing apparatus u 12.5% - 8527 32 00 -- Not combined with sound recording or reproducing apparatus but combined with a clock u 12.5% - 8527 39 00 -- Other u 12.5% - 8527 90 - Other apparatus: u 12.5% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on jamming equipment Kg 12.5% - 8529 10 92 ---- For amateur radio communication equipment Kg 12.5% - 8529 10 99 ---- Other Kg 12.5% - 8529 90 - Other: Kg 12.5% - 8529 90 10 --- For communication jamming equipment Kg 12.5% - 8529 90 20 --- For amateur radio communication equipment Kg 12.5% - 8529 90 90 --- Other Kg 12.5% - After 01.01.2007: 8517 Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Other apparatus for 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): u Free - 8517 61 00 -- Base stations u Free - 8517 62 -- Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus: u Free - 8517 62 10 --- PLCC equipment u Free - 8517 62 20 --- Voice frequency telegraphy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 8517 69 50 --- Subscriber end equipment u Free - 8517 69 60 --- Set top boxes for gaining access to internet u Free - 8517 69 70 --- Attachments for telephones u Free - 8517 69 90 --- Other u Free - 8517 70 - Parts: u Free - 8517 70 10 -- Populated, loaded or stuffed printed circuit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a wireless communication system; the information can travel only in the electro-magnetic wave form. The antenna radiates the information in the form of electro-magnetic wave in an efficient and desired manner to the base station, where the information is picked up by the receiving antenna and passed on to the receiver via transmission line. The signal is de-modulated and the original message is then recovered at the receiver. Thus, the wireless communication gets established. It is the contention of the department that since the antenna can generate electro-magnetic wave from current and voltages and which can convert electromagnetic wave to current and voltages with these waves impinge on it, therefore, it can be considered as a machine, which independently receives and transmits electro-magnetic waves. 43. The Respondent s contention, on the other hand, is that the antenna is a passive element. It cannot function on its own unless connected to the base station, Therefore, the same does not fall within the scope and meaning of machine prescribed at Note 5 under Section XVI. 44. In support of their contention that the Antenna imported for base station is a passive element, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the chartered engineer s certificate, in clear terms clarified that the Antenna in question transmits and receives only signals and not performing any other function like conversion or regeneration of voice, images or other data signals and switching/routing of signals. Therefore, the Antenna stand alone cannot be considered as a machine , attracting classification under Heading 8517.62. Consequently, the observation of the Department in the circular dt.15.01.2018 that the Antenna itself is a complete device and has capability of functioning on its own of conversion of electrical signals into electro-magnetic waves and vice versa in a wireless communication system cannot be applied to the present goods as it would be complete only when connected to a base station. In the event if the Antenna so designed, instead of working as a passive element, besides the above function, it also performs some more functions as in the case of other entries under the same category, its classification under sub heading 851762 may be attracted, considering the same as an independent of machine . 46. The Revenue s contention to classify the Antenna for base station under sub heading 851762 rests ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same heading are to be classified with the machines of that kind or the headings mentioned under the said clause b as appropriate. Further, it is mentioned that parts which are equally suitable for use principally with the goods of heading 85.17 and headings of 8517 and 8525 to 8528 are to be classified as headings of 8517. Therefore, Antennas since parts of BTS, as held by Hon'ble Supreme Court in Hutchison Essar South Ltd. s case (supra), therefore, be classified as parts under 8517.7090. 48. To resolve the issue about classification of Antenna for base station between the competing entries of 851762 and 851770 arose before the member countries, the HS Committee in 62nd session, after deliberation, recorded as follows:- No Product description Classification HS codes considered Classification rationale 22 Antenna for Base Station It is a directional dual-polarized plate antenna with a width of 0.3 m and a length of 1.4 m. The antenna works at 1.7-2. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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