TMI Blog2010 (9) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... also mis-declared the impugned batteries as parts of IFW telephones with a view to avail the claimed exemption instead of declaring the same as lead-acid batteries as indicated in the country of origin certificate - Decided against the assessee - C/298-300/2008 - 989-991/2010 - Dated:- 21-9-2010 - Ms. Jyoti Balasundaram, Dr. Chittaranjan Satapathy, JJ REPRESENTED BY : Shri K.S. Venkatagiri, Advocate, for the Appellant. Shri C. Dhanasekaran, SDR, for the Respondent. [Order per : Chittaranjan Satapathy, Member (T)]. - Initially on 7-7-2009 and subsequently on 20-5-10, both sides have been heard in respect of the following three appeals involving a common issue :- Appeal No. Duty demanded (Rs. in lakhs) R.F. (Rs. in lakhs) Penalty (Rs. in lakhs) C/298/2008 66.83 20.00 10.00 C/299/2008 47.45 15.00 8.00 C/300/2008 39.92 16.30 11.00 Shri K.S. Venkatagiri, ld. Advocate, appearing for the appellants states that the appellants are manufacturers of Integrated Fixed Wireless Telephones (IFWT), which the appellants supplied along with patch panel antenn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ules, 2001. The ld. Advocate also cites the following decisions in favour of the arguments advanced by him. (a) Vanasthali Textiles Industries Ltd. v. CCE, Jaipur - 2007 (218) E.L.T. 3 (S.C.) (b) Mak Controls v. CCE, Coimbatore - 2001 (138) E.L.T. 1152 (Tri.-Chenn.) (c) CCE v. Mak Controls - 2005 (183) E.L.T. A73 (S.C.) (d) Union Carbide (I) Ltd. v. State of Andhra Pradesh - 1995 (76) E.L.T. 489 (S.C.) (e) Teracom Pvt. Ltd. v. CC, Goa - 2008 (222) E.L.T. 58 (Tri.-Mumbai) (f) Jayshree Industries v. CCE - 1993 (63) E.L.T. 492 (Tri.) (g) Eveready Industries India Ltd. v. CCE, Lucknow - 2005 (184) E.L.T. 90. 7. We have heard Shri C. Dhanasekaran, ld. SDR, appearing for the department. He cites the decision of the Tribunal in the case of Twenty First Century Builders v. CC, New Delhi - 2004 (172) E.L.T. 459 (Tri.-Del.) and argues that parts of batteries were not considered as parts of cellular phones in that case. He also states that this decision of the Tribunal has been upheld by the Hon ble Supreme Court vide Twenty First Century Builders v. CC, New Delhi - 2005 (183) E.L.T. A118 (S.C.) and the civil appeal against the Tribunal s order has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogen ready to evolve on the negative plates, creating water - thus preventing water loss. The valve is strictly a safety feature in case the rate of hydrogen evolution becomes dangerously high. One result of this design is a much higher ratio of power to floor space than large, flooded type battery systems; another is a high-rate power capacity, though of relatively short duration. As a result, VRLA batteries are frequently employed in UPS (uninterruptible power supply) or other high-rate applications. 10. It is an admitted position that the impugned VRLA batteries cannot be used inside the telephones because of its size as also the fact that it is not a dry cell battery but a lead-acid battery containing electrolyte. It is also admitted that the VRLA batteries are actually placed in the Switch Mode Power Supply (SMPS) which supplies power to the telephone. During the argument of the case, the ld. Advocate has indicated that the IFW telephones are typically used in rural areas and since electrical power from the transmission lines are often interrupted, the SMPS is useful since automatically it switches from the main power supply to VRLA battery used in the SMPS, thereby ensuri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent situation if the Notification contained a provision that the expressions used in the Notification should be interpreted in a specified manner notwithstanding the provisions contained in the principal Acts. However, that is not the situation in this case. 13. We find that the customs authorities have classified the impugned batteries under CTH 8507 20 00 which is a separate entry for the lead-acid batteries ruling out the claimed classification under CTH 8529 90 90 as parts of telephones. The appellants have also accepted the classification proposed by the customs authorities. This implies that under the Customs Tariff Act provisions, it is not in dispute that the impugned batteries cannot be held to be and classified as parts of IFW telephones. Applying the same interpretation to the notification at hand, we have to hold that the impugned VRLA batteries cannot be considered as parts of IFW telephones and extended the exemption under the aforecited notification as parts of cellular phones. These cannot also be considered to be components as the expression part includes both component part and spare part. 14. The Tribunal s decision in the case of Twenty First Century ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon ble Supreme Court has made a distinction between dry batteries or primary cells on the one hand and storage batteries/accumulators or secondary cells on the other. It has, thereafter, proceeded to hold dry cell batteries marked for transistors as accessories of wireless reception instruments. It is significant that in the said case, the Hon ble Supreme Court made a distinction between dry batteries and storage batteries/accumulators and in the present case we are concerned not with dry batteries but with lead-acid batteries. Secondly, the said decision was rendered in the context of Andhra Pradesh General Sales Tax Act 57. 17. The expression accessory is defined in the EXIM Policy to mean a part, sub-assembly, or assembly that contributes to the efficiency or effectiveness of a piece of equipment without changing its basic functions. The lead-acid batteries in question cannot be considered as an accessory in terms of the said definition and also for the reasons stated in paragraph 18 below. These batteries do not contribute to the efficiency or effectiveness of the telephone but merely provide power in the absence of electric supply from the mains. 18. The ld. Advoca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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