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TMI Blog2023 (6) TMI 904X X X X Extracts X X X X X X X X Extracts X X X X ..... d scalability. The goods principally work as routers along with carrier ethernet switches. These products are Layer-3 routers running IP protocols, segment routing, BGP, etc. These devices provide Layer-3 IP-VPN, EVPN, Internet Enhanced Services (IES) and Layer-2 services like VPLS and VLL. They also provide sophisticated Quality-of-Service (QoS), rich operation management and security features, typically required for routed carrier grade networks. Subheading 851762 covers machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus. Nokia 7210 SAS products are capable of performing functions such as reception, conversion and transmission of data. Therefore, the impugned products performing various functions including switching and routing are clearly classifiable under subheading 851762 - it is evident that the manufacturer is listing these products under the product portfolio of service routers. Accordingly, in trade parlance, these products are known as routers. In respect of notification benefit under Sr. No. 13N of Notification Noe 24/2005, as amended, the entry exempts routers from 100% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers 7210 SAS-T, 7210 SAS-MXP, 7210 SASS 1/ IOGE, 7210 SAS-Sx 1/ IOGE, 7210 SAS-Sx 10/100GE, 7210 SAS-K30 ETR, 7210 SAS-K12 ETR, 7210 SAS-1-K12 2.2 As per the applicant, the impugned products are IP routers and are used in a telecom network. These devices provide service providers with IP routing and carrier Ithernet demarcation, access, and aggregation for mobile backhaul, business, and residential service delivery. Further, for enterprise and mission-critical network operators, the 7210 SAS addresses stringent requirements for high network resiliency, deterministic network performance, and scalability. These products employ Nokia Router Operating System (SR OS) and the Nokia Network Services Platform (NSP) for service and operational consistency. The products are stated to perform switching functions also. The applicant enlisted the following features of the product: Particulars Features Services IP VPN services, Internet Enhanced Service, Routed VPLS with IES and virtual private routed network (VPRN) IPv4 and IPv6 interfaces, IPv4 multicast, IPv4 VPN multicast, Layer-2 virtual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 24/2005- Customs, as amended, exempts router under subheading 85176290 from 100% BCD. The applicant has stated that the goods under consideration are eligible to avail of this exemption as the goods are complete routers. The switching function performed by these devices is a subset of router functions. Therefore, the subject goods remain complete routers capable of performing switching functions. Referring to note 3 to Section XVI, they have stated that the classification of a machine designed for performing two or more complementary or alternative functions ought to be made with respect to its principal function. In the present case, the principal function is routing and the switching function is ancillary. Accordingly, the subject goods are routers and they are eligible for the exemption under the said notification. 2.5 In support of the above assertions, the applicant has submitted the following case laws: Commissioner of Customs (Import), Mumbai Vs. Dilip Kumar and Company arid Ors [MANU/SC/0789/2018] Xerox India Ltd. Vs. Commissioner of Customs, Mumbai Twenty-First Century Printers vs. CC [2003(162) ELT 1045 (Tri-Dei.)] 2.6 In relation to the above-m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... switches. They explained the difference in technical language, however, representative Shri Vishal Gupta agreed to submit the write-up. The technical opinion of the TEC was shared with the applicant for their comments on the same. 4.1 Vide email dated 07.10.2022, the applicant made additional submissions. They reiterated their original submissions made in the CAAR-I application. An ethernet switch is a layer-2 device of the Open System Interconnection (OSI) model and uses a MAC address to forward the data. The main function of the switch is to connect various devices together at a location. A router on the other hand connects multiple switches and their respective networks to form a large network. A router works as an intelligent and aware dispatcher, directing traffic by choosing the most efficient route from multiple routes for data transfer. It also protects information from security threats and decides the priority of devices/ services. Accordingly, the layer-2 switching function is a subset of the layer-3 routing function. In respect of the TEC's opinion, the applicant stated that the view taken by the TEC is in alignment with that of the applicant. These devices are ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a local or wide area network). 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 within, inter alia, carrier-current line systems, digital-line systems and combinations thereof. They may be configured, for example, as the public switched telephone networks, Local Area Networks (LAN), Metropolitan Area Networks (MAN) and Wide Area Networks (WAN), whether proprietary or open architecture. This group includes ( 1 ) Network interface cards (e.g., Ethernet interface cards) (2) Modems (combined modulators; demodulators) (3) Routers, bridges, hubs, repeaters and channel-to-channel adaptors (4) Multiplexers and related line equipment (e.g., transmitters, receivers or electro-optical converters) (5) Codecs (data compressors/decompressors) which have the capability of transmission and reception of digital information (6) Pulse to tone converters which convert pulse dialled signals to tone signals. 5.2 Subheading 851762 covers machines for the reception, conversion and transmission or regeneration of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous paras, based on the datasheet, trade parlance and technical opinion of TEC, the subject goods are routers capable of performing some additional functions. In the case of Commissioner of Customs (Import), Mumbai Vs. Dilip Kumar and Company and Ors [MANU/SC/0789/20181, the Hon'ble Supreme Court observed that 52. To sum up, we answer the reference holding as under - (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. Further, while holding the said principle, the Hon'ble Court, in the above-mentioned case, also relied upon the 'Principles of Statutory Interpretation' by Justice G.P. Singh where in a plethora of cases were examined and it was clarified that no words must be added or deleted while construing any legal provision and there is no room for any intendme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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