9911796707
TMI Blog2024 (7) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... e for the pre-determined purpose i.e., usage with the main equipment. Thus, the subject goods also have no separable function of their own. It is also seen that the main equipment has modular chassis i.e., chassis has dedicated slots for the subject goods. Unless the subject goods are slotted in the chassis in their designated slots, the cards do not source power and intelligence and hence cannot operate independently of the main equipment. The subject cards are also not NIC cards as was held in Vodafone. The Principal Commissioner committed an error in holding that the subject cards are nothing but NIC cards as like NIC cards connect computer over a network in telecommunication, these cards connect optical transport network equipment over an optical network - It has been clearly established in Vodafone that NIC cards are distinct and separable from the overall equipment and thus satisfy the twin tests laid down by this Tribunal. Using the analogy laid down in Vodafone, the subject cards which are tailor-made for the main equipment are in contrast to the NIC cards and are very much essential for the main equipment to operate. The subject cards are not similar in nature to NIC Cards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the show cause notice dated 09.09.2019. 5. The Principal Commissioner classified the subject cards under CTI 8517 62 90 and confirmed the proposed duty demand with interest by order dated 08.07.2020. The findings recorded by the Principal Commissioner are as follows: (a) Like NIC cards connect computer over a network, in telecommunication, these cards connect OTN equipment over an optical network. Thus, the subject cards are nothing but NIC cards; (b) Group G of HSN Explanatory Notes to Sub-Heading 8517 62 covers NIC cards, multiplexers, and electro-optical converters. Thus, by application of General Rules of Interpretation Rule 1, the subject cards are covered under CTI 8517 62 90; (c) Even though the subject cards are incomplete populated PCBs, they have essential character of the finished good as they perform the function of network interfacing, multiplexing, electro-optical conversion and hence should be classifiable as complete apparatus under CTI 8517 62 90 by application of General Rules of Interpretation Rule 2(a); and (d) From the conjoint reading of Section Note 3 to Section XVI and HSN Explanatory Notes to Heading 8517, these cards mounted in series/ groups on OTN main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on apparatus of heading 8443, 8525,8527 or 8528 - Telephone sets, including telephones for cellular networks or for other wireless networks: 8517 11 -- Line telephone sets with cordless handsets: 8517 11 10 --- Push button type u Free - 8517 11 90 --- Other u Free - 8517 12 -- Telephones for cellular networks or for other wireless networks: 8517 12 10 --- Push button type u 10% - 8517 12 90 --- Other u 10% - 8517 18 -- Other: 8517 18 10 --- Push button type u Free - 8517 18 90 --- Other u Free - - 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): 8517 61 00 -- Base stations u 10% - 8517 62 -- Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus: 8517 62 10 --- PLCC equipment u Free - 8517 62 20 --- Voice frequency telegraphy u Free - 8517 62 30 --- Modems (modulators-demodulators) u Free - 8517 62 40 --- High bit rate digital subscriber line system (HDSL) u Free - 8517 62 50 --- Digital loop carrier system (DLC) u Free - 8517 62 60 --- Synchronous digital h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommunications industry standard protocol that provides an efficient way to transport, switch, and multiplex different services onto high-capacity wavelengths across the optical network. It has commonly been termed as a digital wrapper considering the equipment packs each client transparently to be efficiently transported across the network. Within this technological arrangement, the chassis of the main equipment has dedicated slots marked for these cards. These cards become functional when plugged into these slots from where it derives the source power and intelligence. 13. The technical details of the subject goods in dispute have been described in the following manner: (a) Transponder card: This card sends and receives client-side optical service signals and supports optical-electrical and electro-optical conversion for service signals on the client side and also supports optical-electrical, electro-optical and wavelength conversion for optical signals on the line side. Thus, this card is a passive component which simply does conversion between the electrical and optical mediums. There is no conversion done by this card of the voice/ images/ other data being carried on the signal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se Title Goods Remarks 1 Reliance Jio. Order of the Tribunal dated 29.07.2022 in Customs Appeal No. 88483 of 2018 Small-Form Factor Pluggable (SFP) Classifiable under 8517 70 as Parts 2 Cienna Communications. Order of the Tribunal dated 18.12.2023 in Customs Appeal No. 86992 of 2021 Transponder, Muxponder and Splitter Card for OTN equipment Classifiable under 8517 70 as Parts 3 Reliance Jio. Order of the Tribunal dated 22.06.2022 in Customs Appeal No. 88479 of 2018 Transponder and Muxponder Card for DWDM equipment Classifiable under 8517 70 as Parts 4 Huawei Telecommunications. Order of the Tribunal dated 05.10.2023 in Customs Appeal No. 86186 of 2022 Interface Cards for OTN equipment Classifiable under 8517 70 as Parts 5 Vodafone Idea. Order of the Tribunal dated 20.09.2022 in Customs Appeal No. 52287 of 2019 Line Cards for Routers Classifiable under 8517 70 as Parts 18. In terms of applicability of the aforesaid decisions, a summary of similarity between the Cards used for DWDM equipment in these appeals and the main equipment in the instant appeal, i.e. optical transport network equipment is as follows: (i) Modular Architecture In terms of design, the DWDM equipment and main equ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 as other communication apparatus . The Tribunal, while deciding classification, also discussed HSN Explanatory Notes to CTH 8479 which deals with machines having individual function and laid down the following twin test for determining whether an item is classifiable as part: Test 1 - No separate identifiable function of its own The Tribunal held that the line cards are proprietary of the original equipment manufacturer and are not cross compatible with devices of other manufacturers but are usable for the purpose for which they are designed. Thus, the cards possess no functionality other than when used in the dedicated slot designed for them in the primary chassis equipment; and Test 2 - Incapable of operating independently of the main machine- The Tribunal concluded that until the said cards are slotted in the dedicated slots into the chassis of the equipment, these cards cannot function. Thus, the cards in question could not perform independently of the router. 21. In the present case, the subject goods under dispute are not cross compatible with devices of other manufacturers and hence are solely usable for the pre-determined purpose i.e., usage with the main equipment. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llectively but through separate Bills of Entry, Rule 2(a) of the General Rules of Interpretation cannot be applied to determine classification. 27. The Principal Commissioner also relied on Note 3 to Section XVI to infer that the main equipment is a composite machine consisting of two or more machines fitted together to form a whole. Note 3 will not be applicable as the main equipment does not consist of two or more machines, nor does it consist of machines designed to perform two or more complementary or alternative functions. Thus, reliance placed in the impugned order on Section Note 3 is misconceived. 28. The subject cards are also not NIC cards as was held in Vodafone. The Principal Commissioner committed an error in holding that the subject cards are nothing but NIC cards as like NIC cards connect computer over a network in telecommunication, these cards connect optical transport network equipment over an optical network. 29. Definition of Network Interface Card , as given in the Thomas Concise Telecom Networking Dictionary, is as under: Network interface card (NIC): A network interface device in the form of a circuit card that is installed in an expansion slot of a computer ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
