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TMI Blog2022 (6) TMI 1051X X X X Extracts X X X X X X X X Extracts X X X X ..... 8517 62 90; the appellants preferred an appeal before the Commissioner (Appeals); Commissioner (Appeals) vide impugned orders has upheld the contention of the appellants and allowed their appeals. Learned Commissioner (Appeals) has held as follows:- (a) Information available from the product catalogue published by the manufacturer supplier suggests that the impugned goods are parts of Ciena's 5430 Packet Optical Switch (Platform) and therefore shall be classifiable as parts under CTH 85177010 being PCB. (b) In terms of Notification 57/2017 all goods falling under CTH 8517 are exempt from BCD unconditionally. Revenue preferred these appeals against the impugned orders. 3. Shri Ramesh Kumar, Authorized Representative appearing for Revenue reiterates the grounds of appeals and submits that the impugned goods are various telecommunication devices used in optical communication by transmitting digital signal/ messages in one or both directions over a single transmission path on optical fibers; firstly, wavelengths of various signals are changed and various such signals having different wavelengths are mixed and loaded on a single optical fiber and transmitted for op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elength but with different data content (from the add fiber) in the same direction. 5. Explaining on the basis of explanatory notes for HSN and relevant tariff headings, learned Authorized Representative submits that part "E" of the HSN heading 8517 explains that many automatic switch boards and exchanges incorporate analogue to digital convertors, digital to analogue convertors, data compression/ de-compression devices (CODECS), modems, multiplexors, automatic data processing machines and other devices that permit the simultaneous transmission of both analogue and digital signals over the network, which enables the integrated transmission of speech, other sounds, characters, graphics, images or other data; as per the above modems, multiplexors being parts of switch boards are having a specific function to perform in such switch boards (which is basically a platform) even though they are categorically classified under sub-heading 8517 62 30 and 8517 62 70; he submits that the imported apparatus being parts of Photonic Service Switch are to be classified under CTH 8517 62 90. Relying on path (G) of the HSN, he submits that all apparatus which allow the connection to the commu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are exempted under serial no. 13S of the notification no. 24/2005-Cus dated 1.3.2005; Customs Tariff as well as the notification issued clearly recognize "Populated, Loaded Printed Circuit Boards" as "Parts" under sub-heading 8517 70 10; the respondent have been claiming the same classification which was upheld by Commissioner (Appeals); the order was accepted by the Revenue; however, since September-October 2018, Revenue has been again challenging the classification contending that the said cards are " Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus" under Sub-heading 8517 62 90--- "others". 8. Learned Advocate for the respondents submits that the Department did not dispute that the cards are "Populated Printed Circuit Boards" and the fact that Photonic Service Switch is DWDM equipment and the Cards imported are further equipment; the Department has not disputed the fact that the catalogue of Photonic Service Switch (PSS) 1830 assigns specific Parts Numbers to the Cards under "Parts List". He submits that populated printed circuit boards are not by themselves complete "Machines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance but has to be classified as part of the said other machine/appliances/entity; in the instant case, the Cards in question cannot perform any function unless incorporated in the DWDM equipment viz. Photonic Service Switch and their function is not independent or distinct from that of the said DWDM equipment but is integral and inseparable part of the said DWDM equipment. The Cards in question, therefore, cannot be classified as a Machine or apparatus and have to be classified as Parts of the said DWDM equipment. He submits that the issue is decided in the favour of the respondents by the following judgments:- (i) CC v Modicom Network P. Ltd.-2005 (185) ELT 333 upheld by the Supreme Court in CC v Modicom Network P. Ltd.-2015 (320) ELT 21; (ii) CC v N. I. System (India) P. Ltd.-2010 (256) ELT 173 (SC); (iii) US Customs Ruling No. NY N027030 dated 29th May 2008 and No. NY N027023 dated 28th May 2008; (iv) Order-in-Appeal No. MUM-CUSTM-AMP-APP/003/17-18 dated 31.01.2018 10. Learned Advocate further submits that Department relies on HSN notes under (G) other communication operator is misplaced; the other communication operators ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be classified under a specific sub-heading for multiplexors. 12. Heard both sides and perused the records of the case. Brief issue for consideration before us is as to whether the goods imported by the appellants merit classification under CTH 8517 62 70 as contended by the Department or under CTH 8517 70 10 as claimed by the importer respondent. Learned Counsel for the respondent submits that they have been classifying the impugned goods under CTH 8517 70 10 and Learned Commissioner (Appeal) vide order dated 31.01.2018 has accepted their classification and the said order has been accepted by the Department. Though there is no res-judicator in matters of taxation, the assessment of the impugned goods over the years would certainly have a reckoning. The respondent claims that the impugned goods are parts of 1830 Photonic Service Switch (PSS), the Department contends that the same are having independent function and hence need to be classified along with the main machine under CTH 8517 62 70. For a proper appreciation it will be useful to have a look at the relevant headings of the Customs Tariff. Relevant headings are as follows:- After 1-1-2007 : 8517 Telephon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .e. OSLM-5-100G-WL3N: CARD, I find that the technical information provided in the leaflet of the supplier M/s Ciena Communications, USA, suggest that it is a part of Ciena's 5430 Packet- Optical Platform and is a five port Wavelogic-3 nano OTN services line module. It provides a physical platform and electrical interconnection for five line side. Accordingly, the impugned goods will be classified as parts of Packet Optical Switch under heading 85177010 being PCB. The function of a module has been considered by the Tribunal in the case of Modicom Network Pvt. Ltd. 2005 (185) ELT 333 (Tri-Bang) and held that Para 6 .......We find that the Main Switching Center consists of various modules in the form of PCBs. Each module will have its own function. The modules are all of standard format. There is a face plate on the front of each module with display elements, with controls and access to front connectors. The PCBs of the modules are of multi layer design and the components with which they are equipped are mainly surface mounted devices. The Main Switching Center is a machine with the provision for expansion. The modules are inserted as essential parts to attain a particular cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment has not put forth any evidence to substantiate their contention. Therefore, in our considered opinion the impugned goods cannot function as independent machine/equipment. Therefore, we have no hesitation whatsoever holding the same to be the parts of Photonic Service Switch (PSS) 1830. 17. We also find that Revenue submits that on the basis of Explanatory notes to the HSN the items are complete machines or equipments classifiable under CTH 85176270. The Department submits alluding to the HSN that as per explanation (G) the equipment referred to therein allowed for connection to a wired or wireless communication network or the transmission or reception of speech or other sound, images or other data within such networks. A look at this explanatory notes shows us the following. "85.17- Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus 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 84.43,85.25,85.27 or 85.28 (+). - Telephone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... devices (used for sending more than two messages simultaneously) and certain receivers, termed "diversity receivers", using multiple receiver technique to overcome Fading. (2) Radio transmitters and radio receivers for simultaneous interpretation at multilingual Conferences. (3) Automatic transmitters and special receivers for distress signals from ships, aircraft, etc. (4) Transmitters, receivers or transmitter/receivers of telemetric signals. (5) Radio-telephony apparatus, including radio-telephony receivers, for motor vehicles, ships^ aircraft, trains, etc. (6) Portable receivers, usually battery operated, for example, portable receivers for calling, alerting or paging. (G) Other communication apparatus. This group includes apparatus which allows for the connection to a wired or wireless communication network or the transmission or reception of speech or other sounds, images or other data within such a network. Communication networks include, inter alia, carrier-current line systems, digital-line systems and combinations thereof. They may be configured, for example, as public switched telephone networks, Local Area Network ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e incorporated in and or parts of DWDM equipments. 19. We find that this Bench has gone into the issue of classification of parts or equipment while dealing with the classification of antennas imported by the very same respondent case. This Bench observed that Now, a simple analysis of Heading 8517 effective from 1-1-2007, 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 under the second category under CSH 8517 61 00, to which neither side disputes. 42. Revenue, referring to the definition of 'machine' prescribed under N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achine, contrary to the claim of the Respondent that these are passive elements and can function only when attached to the base station for receiving and sending signals. The Revenue has placed the general information available on net about the multi fold use of e node antenna in 4G & 5G network in the developed wireless cellular technology. Comparing the data placed on the imported goods, we find merit in the contention of the Learned Advocate for the appellant that to be antenna as machine, it needs to be something more than a passive element of receiving and sending electromagnetic waves when attached to a base station. The meaning of 'machine' provided under Note 5 to Section XVI reads as : "5. For the purposes of these Notes, the expression "machine" means any machine, machinery, plant, equipment, apparatus or appliance in the headings of Chapter 84 or 85." The meaning of 'machine' has to be understood in the context of Heading 8517. This is clear when we read the scope of Heading 8517 as explained under HSN which reads as follows :- "This heading covers apparatus for the transmission or reception of speech or other sounds, images or other data between two points by vari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... according to the following rules : (a) parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538, and 8548) are in all cases to be classified in their respective headings; (b) other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517; (c) all other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8487 or 8548." 47. A simple analysis of Clause (a) of the above Note reveals that parts which are 'goods' required to be classified in the respective headings; in the present case, 'Antenna' being a part of the BTS, hence applying the said Rule, classifiable under Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner (Appeals). We find that the Department has not drawn any samples and did not obtain technical opinion to support their claim that the impugned goods are complete machines or equipment capable of independent function themselves so as to merit classification under CTH 85176270. On the contrary, the respondents could demonstrate by technical literature; samples and the ratio of judgments cited above that the goods imported by them are Populated Circuit Boards (PCBs) used in PSS 1830 and therefore, the impugned goods are parts of PSS and as such merit classification CTH 85177010. We also find that the appellants have submitted US Customs Rulings on the classification of the impugned goods, though they are not binding on us, they would certainly have a persuasive effect more so in the absence of any evidence to the contrary. In view of the discussion as above, and considering the fact that Commissioner (Appeals) has been consistent in rejecting the department's claim, we are of the considered opinion that there is no merit in the appeals filed by the Department. 22. In the result, we uphold the impugned orders and reject the appeals filed by the Department. (Pronounc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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