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2019 (11) TMI 451 - AT - CustomsClassification of goods - Antenna for base station imported by the Respondent used in mobile telecommunication network - Respondents during the period May 2017 to August 2017 imported “Antenna” for Base Transmission Station(BTS) declared the same as “parts” classifying it under CTSH 85177090 of Customs Tariff Act, 1975; alleging that the said imported goods are classifiable under CSH 85176290 - Board’s Circular No.01/2018 dt.15.1.2018 - Refund of Customs Duty - duty paid under protest. Whether the antenna for base station would be considered as a ‘machine’ and accordingly classifiable under CSH 85176290 as claimed by the Revenue or as “parts” classifiable under CSH 85177090, claimed by the Respondent? HELD THAT:- Prior to 2007, the heading 8517 was consisting of Apparatus i.e. telephone instruments only for line telephony and not for radio telephony; the transmission apparatus for radio telephony was covered under heading 8525 and reception apparatus for radio telephony was covered under heading 85.27; the antenna for the apparatus for radio telephony under heading 8525 & 8527 was specifically covered as “parts” under 8527 of CTA,1975. After 01.01.2007 the instruments for radio telephony/mobile network, Apparatus for reception & transmission, and “parts” have been placed under one heading i.e 8517 of CTA, 1975. Revenue continued classification of Antenna for mobile network as “parts” accepting its classification under 85177090 post 01.01.2007. A simple analysis of heading 8517 effective from 01.01.2007, 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 85176100, to which neither side disputes. The Revenue’s argument is based on the clarification issued by the Board on 01.01.2018 that Antenna is an essential device of a wireless communication system; the information can travel only in the electro-magnetic wave form. The antenna radiates the information in the form of electro-magnetic wave in an efficient and desired manner to the base station, where the information is picked up by the receiving antenna and passed on to the receiver via transmission line. The signal is de-modulated and the original message is then recovered at the receiver. Thus, the wireless communication gets established. It is the contention of the department that since the antenna can generate electro-magnetic wave from current and voltages and which can convert electromagnetic wave to current and voltages with these waves impinge on it, therefore, it can be considered as a machine, which independently receives and transmits electro-magnetic waves. In the present case, the manufacturer of Antenna as well as the chartered engineer’s certificate, in clear terms clarified that the Antenna in question transmits and receives only signals and not performing any other function like conversion or regeneration of voice, images or other data signals and switching/routing of signals. Therefore, the Antenna stand alone cannot be considered as a ‘machine’, attracting classification under Heading 8517.62. Consequently, the observation of the Department in the circular dt.15.01.2018 that the Antenna itself is a complete device and has capability of functioning on its own of conversion of electrical signals into electro-magnetic waves and vice versa in a wireless communication system cannot be applied to the present goods as it would be complete only when connected to a base station. Revenue’s interpretation of the said clause(a) in the present case is that in the event if the goods are not falling under any of the sub heading of heading 8517, then only it will be classifiable as ‘parts’, is incorrect. Clause ‘b’ of the said Note 2 indicates that “other parts”, by implication which are not goods, if suitable for use solely or principally with a particular kind of machine of the same heading are to be classified with the machines of that kind or the headings mentioned under the said clause ‘b’ as appropriate. The correct classification of the Antenna for base station is under Sub-heading 85177090 as “parts” - Since, the main issue of classification has been addressed, the other ancillary/alternative submission/issues on the eligibility of various exemption notifications issued in support of the classification of the said goods, becomes more of academic, hence not analysed. Appeal dismissed - decided against Revenue.
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