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2024 (4) TMI 42 - AT - CustomsClassification of imported goods - different categories of "IP Phones" such as (i) IP Audio Phones (ii) IP Audio Conference Phones (iii) Wireless IP Phones (iv) IP Video Phones - IP Audio phones and IP Audio Conference phones under CTI 8517 1810 or not - Wireless IP Phones to be classified under CTI 8517 1210 or not - HELD THAT:- The dispute with regard to classification of IP Phones under consideration has a clear functionality of telephony inasmuch as it is used for communication of speech or audio signals to other person. Its added features that enable the IP phone to communicate through internet, Ethernet cable or WiFi connection in the form of data does not change the essential nature of communication device. As seen from the data-sheet as above, the IP phones consist of transmission and reception hardware such as telephone handset, speaker, dialing push buttons, transmission and reception of audio signals either by converting it as data packets or otherwise, power module etc. From the above discussion, the IP phones is classifiable under 8517 18 10, as the principal function of these equipment remain as ‘telephony’. It is obvious that since IP Phones are complete products by themselves, the classification is feasible either under the ‘first single dash’ or the ‘second single dash’ entries and classification under ‘third single dash’ entry is ruled out, as these are not ‘parts’. From perusal of the detailed coverage of the goods under the scope of the above entries in the second single dash entry, it would become clear that IP Phones does not match the specific description of any of the apparatus mentioned in the ‘--' entry of the second group at (II) above, namely ‘Base stations’ and various ‘---' entries, such as ‘PLCC equipment, voice frequency telegraphy, Modems, High bit rate digital subscriber line system, Digital loop carrier system, Synchronous digital hierarchy system and Multiplexers’ which are also explained in detail under paragraphs(A) to (G) of HS Explanatory Notes. Even if, one would like to attempt to bring IP phones under second group of ‘-‘ items, treating it as an apparatus which allows for 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, then the only entry that could be feasible is ‘others’. The products under consideration i.e., (i) ‘IP Audio Phones’ (ii) ‘IP Audio Conference Phones’ of various models of ‘CISCO’ brand would appropriately be classifiable under Customs Tariff Item (CTH) 8517 18 10 and not under CTH 8517 69 90, as claimed by Revenue. Further, it is also concluded that the appropriate classification for (iii) ‘Wireless IP Phones’ of ‘CISCO’ brand would be under CTH 8517 12 90 and not under CTH 8517 69 90, as claimed by Revenue. The impugned order passed by the learned Commissioner (Appeals) cannot be sustained on merits. Accordingly, the impugned order is set aside - Appeal allowed.
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