TMI Blog2018 (12) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... ooked this aspect while passing the impugned order. Further, the same goods have been imported into India by others classifying the same under CTH 8517. The goods classified under CTH 8517 have functions, whereas the goods falling under Chapter 8528 are only of reception apparatus with no functions of transmission. It is only on this basis that the impugned goods would merit classification under CTH 8517. As the impugned goods are having the function of transmission of data and other functions and hence the same would merit classification under CTH 8517 - appeal allowed - decided in favor of appellant. - Appeal No. C/11809/2018-DB - A/12699/2018 - Dated:- 3-12-2018 - MR. RAMESH NAIR, MEMBER (JUDICIAL) And MR. RAJU, MEMBER (TECHNICAL) For Appellant: Shri H. D. Dave (Advocate) For Respondent: Shri J. Nagori (A.R.) ORDER Per: Ramesh Nair The present appeal has been filed against Order-in-Original No.AHM-CUSTM-000-COM-005-18-19 dated 25.04.2018 passed by the Principal Commissioner of Customs, Ahmedabad. The facts of the case are that the Appellant had imported Encoder / Multiplexer / Modulator under various Bills of Entry classifying the same un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of signals (televisions sets) and (2) Apparatus for reception of television signals, without display capabilities (e.g. receivers for satellite television broadcasts). These apparatus receive signals and convert them into a signal suitable for display. Thus the classification under CTH 85287390 is correct. 2. Shri H.D. Dave, Ld. Counsel appearing on behalf of the appellant describes the relevant entry of 8517 and 8528, which are as under:- 8517 Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the 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 networks), other than transmission or reception apparatus of heading 84.43, 85.25, 85.27 or 85.28. - Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless (such as local or wide area network) 8517.61 Base stations 8517.62 Machines for the reception, conversion and transmission of voice, images or other data, including switching and routing apparatus. 8517 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lectronic Cinema ENG: Electronic News Gathering (including SNG, Satellite news Gathering) FSS: Fixed Satellite Service (e.g. to head ends) HTT: Home Television Theatre IPC: Interpersonal Communications (video conferencing, videophone etc.) ISM: Interactive Storage Media (optical disks etc.) MMM: Multimedia Mailing NCA: News Current Affairs NDB: Networked Database Services (via ATM etc.) RYS: Remote Video Surveillance SSM: Serial Storage Media (digital VTR, etc) 3. He submits that in view of above application the adjudicating authority has wrongly averred that MPEG - 2 or MPEG 4 are only for broadcast of television application. They are involved in providing apparatus and systems, which can be used for internal protocol which is a multiple application and not limited to cable TV operation. The classification of the goods has to be decided on the basis of its condition at the time of importation and not after its use in the manufacture of some other products. They are manufacturers of goods and many a time, the imported goods are used in manufacture and process further to convert or make them into usable commodity like the digital head-end sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s appropriate. However, parts which are equally suitable for use principally with the goods of headings 85.17 and 85.25 to 85.28 are to be classified in heading 85.17. That being data conversion equipments capable of multiple outputs in combination with other machines, they merit classification under Chapter 8517 and cannot be constricted to narrowly confine to Chapter 8528 since they are not any kind of reception apparatus of television much less apparatus for reception. He draws our attention to the imports of similar goods wherein the goods have been imported from year 2011 to 2018 including that of satellite TV and cable service industry in Chapter 8517. He submits that the impugned goods being imported all over the country through different Custom Houses are classified under Chapter 8517 only. He also submits that the demands are barred by limitation of time and there has been no reason for incorrect classification of imported goods as the importers had also imported the goods under the same custom tariff heading and therefore it cannot be alleged that there has been suppression or intention to evade duty by the Appellant. He relies upon the following judgments in suppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... descramblers are used in cable television application for receiving, de-coding and re-transmitting television signals. The receiver / descrambler decodes for further transmission, reception and subsequent display. 5. In the case in hand, the head-end is a combination of individual machines, inter-connected by electric cables intended to contribute together to the clearly defined function of transmission apparatus for television, whether or not incorporating reception apparatus. The imported goods are to be used / help for transmission of cable television program providers to the cable TV operators. He submits that the application of the products in the cable TV industry and used as a format for digital television signals that are broadcast over the air, cable and direct broadcast satellite TV systems. The goods are reception apparatus for television. That Chapter Tariff Head 8517 excludes transmission or reception apparatus CTH 85.28. Explanatory notes to CTH 85.17 covers networks, which may be interconnected, include telephony, telegraphy, radio-telephony, radio-telegraphy, local and wide area networks. CTH 85.28 refers to reception apparatus for television, whether or not inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2014, 22.6.2016 and 29.12.2016. Consequent to the classification of encoders, modulators and multiplexers under CTH 85287390 of the Customs Tariff Act, 1975, these products are to be re-assessed under CTH 85287390 in cases of the SCNs dated 3.12.2004, 22.6.2016 and 29.12.2016. 6. We have heard and carefully considered the submissions made by both the sides and perused the records. We find that the dispute pertains to classification of the goods, viz. encoders, modulators and multiplexers, which are for conversion of voice, images and other data prior to its transmission for various networks. The rival entries involved in this case are 85.17 and 85.28, which reads, as under:- 8517 Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the 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 are networks), other than transmission or reception apparatus of heading 84.43, 85.25, 85.27 or 85.28. - Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Centre Application (Space Satellite related applications), Infosys (Information Technology Software industry), Hathway Cable Datacom (Cable Broadband Network service provider), Broadband (Internet service provider). We find that these products are used for conversion and compression (coding) used for conversion of signals as apparatus for transmission at transmission site for both wired and wireless networks (WAN LAN). The goods are not used at subscribers end as reception apparatus for television. The adjudicating authority has over-looked this aspect while passing the impugned order. Further, we find that the same goods have been imported into India by others classifying the same under CTH 8517. The goods classified under CTH 8517 have functions as enumerated above, whereas the goods falling under Chapter 8528 are only of reception apparatus with no functions of transmission. It is only on this basis that the impugned goods would merit classification under CTH 8517. We find that even in case of Transmission producing equipment sub-system, the Tribunal in the case of Dejero Logix Pvt Ltd Vs CCU, New Delhi, 2014 (303) ELT 565 Tri, while dealing with the same controversy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or video signals by a reporter from some place to his studio from where the signals are broadcasted for general public, the equipment, in question, cannot be classified under Heading No. 8525 50 20 and hence, the same would not be restricted for import. The impugned order, therefore, is not sustainable. The same is set aside. The appeal is allowed. The Hon ble Supreme Court in the case of Commr. of Customs Vs Multi Screen Media, 2015 (322) ELT 421 SC in the similar set of controversy has held as under :- Para 2. It is not in dispute that the business satellite receivers of the respondent has the transmitting as well as reception functions. It is for this reason that the assessee s contention is the goods fall within the description transmission apparatus incorporating reception apparatus . Mr. Adhyaru, learned senior counsel appearing for the Revenue on the other hand contends that it is the essential character or per-dominant character of the apparatus which needs to be looked into and in the present case the per-dominant character of the satellite receiver is to receive the signals and then transmit. He has taken us through the product manual of the respondent fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eway ensures comprehensive security for networks. It protects networks against threats arising from the webs, such as viruses and other malware, inappropriate content, data leaks, and related issues. This appliance is installed as a gateway that connects a network to the web. Following the web security rules, it filters the requests that users send to the web from within the network. Responses sent back from the web and embedded objects sent with requests or responses are also filtered. Malicious and inappropriate content is blocked, while useful content is allowed to pass through. Therefore impugned goods act as a security device in a network and it protects the network from external malicious threats. It is not the case of the department that the impugned goods can function on its own without being connected to any network. Therefore the impugned goods are specially designed with a special purpose for use in a network and it cannot be for general use. Further Rule 3 of the Classification Rules states that the most specific description shall be preferred to headings providing a more general description. CTH 8517 covers goods such as telephone sets, including telephones for cellul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Card, therefore, it was classifiable under CTH 8517. Para 5. On the submissions of the learned Counsel, based on various authorities, we find that the product is a Gateway Security Device. It has the function of transmitting the data through Network from one server to other and it has function of security for the data transmitted. Since the product has feature of transmission of data, it merits classification under the communication apparatus i.e. under CTH 8517. Heading 8543 proposed by the Revenue is a residuary entry. Since as per the application and function of the product, it is used for communication and transmission of the data. It finds place under the specific entry i.e. under 8517. Therefore, it cannot be classified under residuary entry, which is meant for a product not elsewhere specified. As per the finding of the learned Commissioner (Appeals) and our above discussion, we are of the view that subject goods is correctly classifiable under CTH 8517 and not under CTH 8543. Therefore, the impugned order is upheld. The appeal is dismissed. The Cross-Objection filed by the respondent also stands disposed of. 7. From the above judgments, it is clear that a ..... 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