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TMI Blog2024 (7) TMI 1409X X X X Extracts X X X X X X X X Extracts X X X X ..... ther device. The ICs are only capable of functioning as compressor/decompressor upon connection with external peripherals like power supply and interface. The goods imported only interact with components which are mounted on the PCB. No network like LAN/WAN is established between the impugned goods and other components of PCB. The imported goods are not in the nature of machines or apparatus which are deployed in a network like LAN/WAN. CTH 8542 deals with electronic integrated circuits i.e. ICs. They would, therefore, be specifically covered under CTH 8542 - HSN Explanatory Notes to CTH 8542 provides that monolithic ICs may be in the form of un-diced wafers. The IC-Codecs, as imported by the appellant, are in form of rolls i.e., un-diced wafers - the goods imported by the appellant are IC-Codecs and are classifiable under Customs Heading 8542 and more specifically under CTI 8542 39 90. Benefit of exemption Notification dated 01.03.2005 - HELD THAT:- The appellant is entitled to the benefit of exemption Notification dated 01.03.2005, which exempts whole of the customs duty leviable on the goods imported into India falling under CTH 8542. As the order on merits cannot sustain, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ta. The GPIO pins are digital control pins of the goods which enable connection with the master such as CPU or FPGA through the PCB. These masters, in turn, control the operation of the goods and the flow of the data within the DSPs using GPIO pins and 12C interface, respectively. 12C interface is the communication protocol which allows to and fro of data from the communication input. 4. During the relevant period from 05.03.2018 to 07.03.2019, the appellant imported the goods; classified them under CTI 8542 39 00; availed the benefit of concessional rate of duty under Serial No. 24 of Notification dated 01.03.2005 [the Exemption Notification]; and paid IGST @12% on the import of the goods. 5. The department conducted an audit scrutiny of the imports of the goods. It was understood by the audit team that the goods are a kind of Codec that have the capability of transmission and reception of digital information and would, therefore, be classifiable under CTI 8517 62 90 as 'other communication apparatus' and, accordingly, would be subject to levy of basic customs duty @ 10% and IGST @ 18%. 6. An investigation was, therefore, initiated by the Custom Authorities. The Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the goods cannot be classified on the basis of the said submissions of the appellant, they would merit classification under a heading which occurs last in numerical order; (v) Even if the goods merit classification under CTH 8517, the demand of duty is revenue neutral; (vi) IGST and interest on IGST cannot be demanded under section 28 of Customs Act; and (vii) No interest can be demanded when duty demand is not sustainable. 11. Shri Nagendra Yadav, learned authorised representative appearing for the department, however, supported the impugned order except to the extent it refrained from confiscating the goods and imposing penalty under section 112 (a)(ii) of the Customs Act. The following submissions have been made by the learned authorised representative for the department: (i) Onus was on the appellant to elaborate as to whether the goods falling under CTH 8542 can also acquire the nature of Codecs during the course of post importation operations. However, they have not mentioned or proved that the goods imported by them are not the kind of Codecs and, hence, the same go beyond the purview of CTH 8542; (ii) Since the appellant has neither suggested which are the tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 hierarchy system(SDH) u Free - 8517 62 70 Multiplexers, statistical multiplexers u Free - 8517 62 90 Other u 10% - 15. It would also be necessary to reproduce the relevant tariff items under CTH 8542 and the same are reproduce below: Tariff Description of goods Unit Rate of Duty (1) (2) (3) (2) (4) 8542 Electronic Integrated circuits 8542 31 00 Electronic integrated circuits Processors and controllers, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for a specific purpose." 21. The Modern Dictionary of Electronics defines "equipment" and "instrument" as: "Equipment An item having a complete function apart from being a substructure of a system. Sometimes called a set." "Instrument- A device capable of measuring, recording, and/or controlling." 22. The goods imported are electronic integrated circuits used in the process of manufacture of mobile phones and tablets. The items covered under CTH 8517 constitute a complete machinery or apparatus in itself. The goods imported would not satisfy any of the description of goods covered under CTH 8517 as the ICs-Codecs cannot be described either as a machine or as an apparatus. The goods in the present case i.e. ICs are merely electronic integrated circuits. 23. The Principal Commissioner held that the goods can be classified under 8517 as "other communication apparatus". It needs to be noted that CTH 8517 covers "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). The goods imported are not in the nature of stand-alone device ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure or material in the impugned order to show that the imported ICs, at the time of import, have any capability of transmission or reception of digital information. The allegations made in the show cause notice and confirmed in the impugned order are only based on presumptions. 31. Reliance placed by the learned authorised representative of the department on the decision of the Tribunal in CC (Import), Air Cargo Complex, Mumbai vs. Indelox Services Private Limited [2017 (357) E.L.T. 946 (Tri-Mumbai)] is misplaced. The goods imported were routers which had the capability of transmission of data at the time of import itself. In the present case, the imported goods do not have the capability of transmission of data at the time of import. 32. The Principal Commissioner also committed an error in referring to rule 2(b) of the General Rules of Interpretation. This governs the classification of mixtures and combinations of materials or substances; and of goods consisting of two or more materials or substances. In the present case, rule 2(b) would have no relevance as the product is not a mixture or combination of materials or substances. The product would be classifiable under CTH 8542 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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