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2018 (12) TMI 172

t the items in question, i.e. Encoders, Multiplexers, Modulators, are having individual functions. It is found that each of these products is having independent functions and are used for various purposes for transmission of data. - The Appellants are selling these goods not only to TV Cable operators but also to other users such as Space Centre Application (Space & Satellite related applications), Infosys (Information Technology & Software industry), Hathway Cable Datacom (Cable & Broadband Network service provider), Broadband (Internet service provider). 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, 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 transmi .....

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interconnected by electric cables, intended to contribute together to the clearly defined function of transmission apparatus for …… television, whether or not incorporation reception apparatus. The impugned goods are used in cable industry for transmission of cable television programme to cable TV Operators. The encoders are made using circuits from with MPEG-2 and MPEG - 4 whose applicability lies for broadcast television applications. That Chapter 85.17 excludes transmission or reception apparatus of heading 85.28. Explanatory notes to CTH 85.17 covers networks which may be interconnected include telephony, telegraphy, radio - telegraphy, local and wide area networks. CTH 85.28 refers to reception apparatus for television, whether or not incorporating radio - broadcast receivers or sound or video recording apparatus, for the display 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 .....

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at CTH 8528 does not include apparatus for transmission, instead it includes only reception apparatus. The contention of the Adjudicating authority that MPEG-4 and MPEG-2 are used by encoders only for broadcast of television application is totally erroneous as it can be used for multiple applications and services. He relies upon excerpts from ITU-T MPEG-2 and MPEG - 4 A as below: Intro.2: Application The applications of this specification cover, but are not limited to, such areas as listed below: BSS: Broadcasting Satellite Service (to the home) CATV Cable TV Distribution on optical networks, copper etc. CDAD: Cable Digital Audio Distribution DSB: Digital Sound Broadcasting (terrestrial and satellite broadcasting) DTTB: Digital Terrestrial Television Broadcasting EC: Electronic 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 Surveil .....

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r 85, parts of machines (not being parts of the articles of heading 84.84, 85.44,85.45, 85.46 or 85.47) are to be classified according to the following rules: (a) Parts which are goods included in any of the heading of Chapter 84 or 85 (other than headings 84.09, 84.31, 84.48, 84.66, 84.73, 84.87,85.03, 85.22, 85.29, 85.38 and 85.48) are in all cases to be classified in their respective headings; (b) Other parts, if suitable for use solely or principally with a particular kind of machine or with a number of machine of the same heading (including a machine of heading 84.79 or 85.43) are to be classified with the machines of that kind or in heading 84.09, 84.31, 84.48, 84.66, 84.73, 85.03, 85.22, 85.29 or 85.38 as 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 .....

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hed housing electronic equipment used to receive and re-transmit video over the local cable infrastructure. A head-end is a cable television industry term for a combination of television signal transmission apparatus. Each system is individually configured as per the set specifications for particular customer. It receives satellite television signals, modifies the signal and then transmits the signal into a cable television. Thus, the head-end serves as integral function in the cable TV television chain. Head-end contains combinations, converters, signal processors / generators, combiners, scramblers, amplifiers, modulators / demodulators and receivers. The receiver / 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 .....

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ed in the Board and the said ruling has not been accepted by the Board. Therefore, it is considerably clear that the classification recommendations made by the WCO‟s Committee have not been accepted by the Central Board of Excise & Customs for the products namely encoders, modulators and multiplexers imported by the importer and, therefore, the recommendations made by the Committee cannot be implemented in India. Accordingly, the contention made by the importer on this count is not justified. Hence, there is clear justification to classify the disputed products imported by the importer under CTH 85287390 of the Customs Tariff Act, 1975 as proposed in the SCNs dated 3.12.2014, 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 con .....

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are having individual functions. We find that each of these products is having independent functions and are used for various purposes for transmission of data. The adjudicating authority has classified the above items by terming the same as part of head-end facility used in cable television as master facility for receiving television signals for processing and distribution over a cable television system. The adjudicating authority thus held that the goods would be classifiable under Chapter 8528. The Appellants are selling these goods not only to TV Cable operators but also to other users such as Space 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 .....

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n. The equipment which can merely transmit some audio or video signals from one place to another place and is not capable of transmitting the signals which can be received by general public cannot be called broadcast equipment. What is covered under Heading No. 8525 50 10 and 8525 50 20 are the transmitter which can transmit radio or TV programme intended for reception by public and it is such equipment which are restricted for import. Since the equipment imported cannot transmit the signals for reception by general public but is meant only for transmitting the audio 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 .....

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ld fall under CTH 8517. The relevant para of the said order held, as under:- Para 4. - We have carefully considered the submissions made by both sides. We find that the learned Commissioner (Appeals) has classified the impugned goods under CTH 8517 on the following findings:- 5. Considered the submissions. The appellant is aggrieved by the classification of the impugned goods under CTH 8543 instead of CTH 8517 as claimed by them. As per the installation manual (page 9) the goods McAfee Web Gateway 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 maliciou .....

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ity device stands decided by the Hon ble Tribunal under CTH 8517. In the impugned goods being of similar nature are classifiable under CTH 8517. As far as past clearance of similar goods is concerned no demand notice seems to have issued by the department, till date. From the above finding, it is observed that the learned Commissioner (Appeals) has contended that the product in question is covered under the Network Interface 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 mea .....

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