9911796707
TMI Blog2025 (3) TMI 393X X X X Extracts X X X X X X X X Extracts X X X X ..... or wide area network)'. In the Explanatory Notes, Electro-optical converter is termed as an apparatus and not as a part. Since, the item has found mention at the second single dash (-) level under CTH 8517, there exists no necessity to go beyond this single dash and the item should be classified under the subheading/tariff items covered under this single dash entry. If the item were to be treated as parts, the item would have covered under the third single dash (-) entry, which covered the parts. Therefore, the product cannot be classified as parts and would not be covered under CTI 85177990 which cover parts. The entry at the tariff item 8517 6100 is Base station, which is a central communication hub that manages signal communication between mobile devices and the network. A base station is much larger and serves as a communication hub that manages many transceivers and devices within its coverage area. Hence, the subject item is not classifiable here. The subject item, Transceiver is thus not specifically covered under any of the tariff items from 8517 6210 to 8517 6270. Therefore, the same has to be classified under the residual entry 'other' under the tariff item ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by the Applicant: 2.1 M/s Cisco Commerce India Private Limited ('the Applicant'), is a company is engaged in developing, importing and selling of networking hardware, software, telecommunications equipment and other high-technology services and products. 2.2 The company is engaged in regular import of goods into India since the year 2012. Amongst other products, the Company is importing transceivers (hereinafter referred to as 'Product under consideration'/'Product') from Cisco System Inc, USA. 2.3 The product under consideration is a Transceiver, which are of two categories, i.e., Optical transceivers and electrical transceivers. They are of different type modules, mentioned as follows: * Small Form-Factor Pluggable (SFP) transceivers modules (including SFP+ modules, XFP modules). * CPAK transceivers modules. * Quad Small Form-Factor Pluggable (QSFP) transceivers modules (including QSFP+, QSFP28 modules. * C Form-Factor Pluggable (CFP) transceivers module (including CFP2 modules). 2.4 It is pertinent to highlight that irrespective of the technical distinction between the two types of transceivers, their customs classification remains the same. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dently and execute their tasks of transmitting, receiving and converting without external assistance and the fact they need to be inserted into a device, does not change their functional independence. Newton's Telecom Dictionary, 31st Expanded and Updated Edition, Harry Newton, 2018, defines transceiver as: "1. Any device that transmits and receives. In sending and receiving information, it often provides data packet collision detection as well. 2. In IEEE 802.3 networks, the attachment hardware connecting the controller interface to the transmission cable. The transceiver contains the carrier-sense logic, the transmit/receive logic, and the collision-detect logic. 3. A device to connect workstations to standard thick Ethernet-style (IEEE 802.3)." 2.7 There are two types of transceivers, optical and electrical, which perform essentially the same function, except that optical transceivers convert optical signals to electrical signals and vice versa, while electrical transceivers convert one format of electrical signal to another format of electrical signal (usually Ethernet electrical signal to a signal recognized by the host). 2.8 However, the applicant has come across the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opper wire cables into optical digital signals. These converters are used, for example, when an optical fiber cable is used in a token-ring LAN in order to extend it into a campus environment, or where the replacement of copper cable with optical fiber cable is important to reduce interference." 3.5 Based on a bare reading of the Tariff Heading and its relevant WCO Explanatory Notes, it appears that for a product to be classified under Tariff Heading 8517, it must meet the following criteria: 1. It must be an apparatus for the transmission or reception of voice, images, or other data. 2. Additionally, it could be an apparatus for communication in a wired or wireless network (such as a local or wide area network). 3.6 In the instant case, the product under consideration, combines the functions of a transmitter and a receiver, handling the reception, conversion, and transmission of signals. Their primary function is to convert optical signals from the network to electrical signals and vice versa. Similarly, the primary function of electrical transceivers is to convert electrical type signals. They are pluggable modules that can be inserted into various networking devices such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is exactly meant by ability to function on stand-alone basis. Additionally, it is essential to determine whether the capability of functioning on a standalone basis merit more importance than the WCO explanatory notes and GRIS for classification of a product under the Customs Tariff. 3.10 The Company submits that transceivers can undertake the functions relating to reception, conversion, and transmission of electrical or optical signals on stand-alone basis, albeit requiring electrical supply and devices to be plugged in to receive and transmit signals. The product under consideration is performing its designated function with the assistance of electricity and signal generating device. Usage of an external power supply or any other device for signal generation should not be a criterion for disqualification from the definition of machine. 3.11 In the instant case, the product under consideration operates by being plugged into network devices like routers and switches to transmit and receive data to and from the network, effectively linking these devices to the network. It is fulfilling its designated function. It is further submitted that it is a settled proposition of law that cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le communication between the networking devices, such as switches, routers and servers, over long distances using fibre optic technology. An SFP transceivers can work on different type of media network such as fibre optic cable or copper cable. The copper SFP module is mainly used for short distance data transmission. On other hand, an optical interface module, also known as an optical transceiver or optical module is a device that converts electrical signals into optical signals and vice versa. As the Nature and function remains the same, both the SPF Transceiver and Optical Transceivers should be treated as independent machine/ apparatus classifiable under CTI 85176290. The applicant has also submitted that the product under consideration performs the function of reception, transmission and conversion of data that it receives through switches, routers and servers and has the capability of performing specific functions independently and execute their tasks of transmitting, receiving and converting without external assistance. As such, the product operates as complete machine in themselves. Further, it is relevant to mention that the HSN Explanatory Notes to the Heading 8517 holds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opper cable would be treated as "non OTE/OTN". c). In view of above, the SFP Transceivers working with a copper cable may be treated as Non OTE/OTN products and eligible for duty exemption under serial number 20 of the Notfn. No. 57/2017-Cus. dt. 30.06.2017, as amended. Whereas the SFP Transceivers working with a fiber optic cable, may be treated as OTE /OTN product and would not be eligible for duty exemption under serial number 20 of the Notfn. No. 57/2017- Cus. dt. 30.06.2017, as amended. 5. Details of Hearing: 5.1 A hearing was held on 13.11.2024 at 11.30 AM. Sh. Vijay S. Chauhan, Sh. Amit Ghadage, Sh. Rajesh Kumar, Sh. Dhanshekharan and Ms. Parul Vivek, representatives on behalf of the applicant appeared for the hearing through video conferencing. They contended that subject import goods are different models of Transceivers i.e. the receivers and transmitters. They reiterated the contention filed with application. They contended that the device work as a larger system and merit classification under CTI 85176290. In support of their claim, they relied upon description, HSN and Explanatory Note, CAAR Delhi Ruling in case of M/s. Nokia wherein the same kind of product was und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I observe that Transceivers are devices that transmit and receive signals, commonly used in communication systems. The Transceivers can undertake the functions relating to reception, conversion, and transmission of electrical or optical signals on stand-alone basis. They come in two main types: optical transceivers and electrical transceivers. Optical transceivers use light signals for data transmission, employing fiber optic cables to achieve high-speed communication over long distances with minimal signal degradation. They are widely used in applications like data centers, telecommunications, and high-bandwidth networking due to their immunity to electromagnetic interference. On the other hand, electrical transceivers use electrical signals to transmit and receive data through traditional copper cables, such as Ethernet cables. These are cost-effective, easy to implement, and suitable for shorter distances, although they are more susceptible to interference compared to their optical counterparts. Both types are critical in modern communication technologies, supporting a variety of networking and connectivity needs. 6.6 Transceivers are available in different module types, each t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or other data. including apparatus for communication in a wired or wireless network (such as a local or wide area network); III. Parts 6.9.2 As per HSN, the aforesaid category II has further been divided into the following groups: (A) Base station; (B) Entry-phone systems; (C) Videophones; (D) Apparatus for telegraphic communication other than facsimile machines of Heading 84.43; (E) Telephonic or Telegraphic Switching Apparatus; (F) Transmitting and receiving apparatus for radio-telephony and radio-telegraphy; and (G) Other communication apparatus. 6.9.3 As per Explanatory Notes, the aforesaid Group G relates to "other communication apparatus" and is reproduced below: "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 Networks (LAN), Metropolitan Area Networks (MAN) and Wide Area Networks (WAN), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obile devices and the network. A base station is much larger and serves as a communication hub that manages many transceivers and devices within its coverage area. Hence, the subject item is not classifiable here. The next double dash (--) entry is "Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus". It has been concluded in the preceding paragraphs that SFP Transceiver is an apparatus for converting data (conversion data from öptical to electrical and vice versa). Since, conversion is specifically covered under the second double dash entry, this item would be undisputedly classifiable under the subheading 8517 62. Further, the items covered under the subheading 8517 62 are given below: Subheading/ 'Tariff Item Dash Description 8517 62 -- Machines for the reception, conversion and transmission on regeneration of voice, images or other data, including switching and routing apparatus 8517 6210 --- PLCC equipment 8517 6220 --- Voice frequency telegraphy 8517 6230 --- Modems (modulators-demodulators) for xDSL based Wireline Telephony 8517 6250 --- Digital loop ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the side that connects to the outside world through a fiber optic cable. Thus, based on the functioning of Optical SFP Transceivers, they are required to convert the electrical signals to optical signals and vice versa for interconnecting two networking equipment functioning with electrical signals optical signals, as the case may be. Therefore, it is evident that the Optical SFP Transceivers, being capable of converting electrical signal to optical signal and vice versa are equipped to handle and be a part of Optical Transport Network, and therefore would be termed as Optical Transport Equipment / Optical Transport Network products. Hence, the Optical SFP Transceiver falls under the exclusion category specified in Serial No. 20 of Notification No. 57/2017-Cus., dated 30.06.2017. Consequently, it is not eligible for the benefit of concessional basic customs duty under this notification. On the other hand, the Electrical SFP Transceiver, which operates with copper cables, is treated as a non-Optical Transport Network (OTN) product and non-Optical Transport Equipment (OTE). It does not fall under the exclusion category specified in Serial No. 20 of Notification No. 57/2017-Cus., ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
