9911796707
TMI Blog2019 (11) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... id duty under protest and filed appeals before the learned Commissioner (Appeals), challenging the assessment order passed by the Adjudicating authority. The learned Commissioner (Appeals) allowed the appeals filed by the Respondents and remanded the matter to the Adjudicating authority for re-assessing the goods under CTH 85177090 of CTA,1975 and to consider the refund of duty paid under protest by the respondent. Hence, the present appeals are filed by the Revenue. 3. The learned Special Counsel Shri K.M. Mondal for the Revenue has submitted that in the impugned order, the learned Commissioner (Appeals) has wrongly held that since the antena imported by the Respondent is specifically designed for use with base station and it is an essential and integral part of the base station, so as to make the base station completely functional unit, its classification will be as part of the base station under chapter sub heading No.85177090. The learned Commissioner (Appeals) has also erred in holding that since the antenna is suitable for use solely or principally with base station, it shall be classifiable as a part of base station in accordance with the Chapter Note 2(b) of Section XVI of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Board's instructions, the antenna used at base Trans-receiver station/Node B/C Node, being a wireless communication net work merits classification under CTH 85176290. 6. Responding to the argument of the Respondent that antenna for base station is passive element which cannot function on its own, hence, classifiable under Heading 85170960 as a part to base station in view of the classification of the same adopted by the Customs in other countries Viz., China, Vietnam, Singapore, US and by the HS Committee 62nd Session, the learned Special Counsel has submitted that Revenue is concerned with the Customs Tariff of India for classification of the goods, and as per the Customs Tariff of India, the classification of the goods has to be determined by application of General Rules for interpretation of import tariff and its relevant section, notes, and chapter notes. Revenue need not be guided by the import tariff of other countries. He has contended that as far as classification decision of base station antenna of H.S. committee is concerned, it may be a good guide but it is certainly not binding on the Revenue unless it is ratified by India. This is quite apparent from the Board's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity or its use, but the principles prescribed under relevant section/chapter note. Referring to Section note 2(a) of Section XVI, he has submitted that it clearly prescribes that parts which are goods ought to be classified in their respective headings. Further it do not, at any stage, indicate that these parts should be capable of functioning on their own. Drawing analogy to the goods viz. speakers, head-phones, ear-phones, etc which are not capable of functioning on their own, and are often designed to be a part of other equipments like music system, mobile phones etc. but are still classifiable under their respective headings. Therefore, in similar manner, the antenna is also a specific machine classifiable under different heading as goods and as parts. He has submitted that the Customs Tariff recognizes the antenna as separate goods which is accordingly classifiable under Chapter Heading 852910 of Customs Tariff Act. However, as per Section note 2(b), antenna which is suitable for goods of headings 8517 are classifiable under Chapter 8517 and not under Chapter Heading 8529. Irrespective of the same, antennas are recognized as goods in their own right under Customs Tariff Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble Supreme Court in Hutchison Essar South Ltd case (supra), the learned A.R. has submitted that Hon'ble Supreme Court based its findings on the fact that the antennas had been imported along with base station. Referring to Para 9 of the judgment, the learned A.R. has submitted that the said judgment should be read to the effect that the benefit of exemption notification would be available to antenna when it is imported along with BTS. In the present case, however, the antenna had been imported independently. Referring to the judgment of Tribunal in the case of Modern Communication & Broadcasting Systems P. Ltd Vs CC Kandla - 2009 (245) ELT 199 (Tri-Ahmd), wherein it was held that the antenna system performs both reception and transmission, he has submitted that if it be so, the antenna is an independent machine and thus classifiable as independent goods and not as parts. 15. Further, he has submitted that the findings of the learned Commissioner (Appeals) on the issue of availability of exemption under various notification ought to be struck down since it is beyond the scope of assessment of Bill of Entry as the said notification was not even claimed in the Bill of Entry or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is devoid of merit. Further, he has submitted that as per Section 128A of the Customs Act, 1962, it is mandatory on the part of the Commissioner(Appeals) to provide an opportunity of hearing to the Appellant ; if he so desires. Thus it is only the Appellant (now the Respondent) who has the statutory right to be heard and there is no statutory right conferred on the respondent before the Ld. Commissioner (Appeals), that is the department, to be heard. As per as Section 1(A) of Section 128 is concerned, the same has been introduced in the year 2004, which allows the Commissioner (Appeals) to adjourn the hearing for reasons to be recorded in writing, subject to a maximum of three adjournments. It is amply clear that adjournment cannot be extended to the party concerned as a matter of routine, unless sufficient cause has been shown in support of the adjournment. Further, he has submitted that the number of 3 adjournments prescribed the upper limit as laid down by the Hon'ble Gujarat High Court in the case of Ramesh Vasantbhai Bhojani Vs UOI - 2017 (357) ELT 63 (Guj.). He has further submitted that the plea of violation of principles of natural justice advanced by the Revenue at this st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tariff itself recognizes that antenna are not, in themselves, complete apparatus for transmission or reception of radio telephony, but only parts of apparatus for transmission and reception of radio telephony. 20. He has further submitted that in the year 2007, consistent with the changes made by World Customs Organisation to the HSN, whereby the apparatus for transmission and reception of radio telephony were shifted from Heading 85.24 and 85.27 and brought under Heading 85.17; consequent to which parts of such apparatus would stand shifted from heading 85.29 to sub-heading 8517.70. 21. Consistent with the said changes in the HSN, the CTA in India also got amended w.e.f. 01.01.2007 and consequently, the transmission and reception apparatus for radio telephony were removed from Heading 85.24 and 85.27 and brought under Heading 85.17. Similarly, parts of transmission and reception for radio telephony covered under Heading 85.29 prior to 2007 shifted to heading 8517.70 which covers parts. The net effect of the aforesaid changes was that antenna for transmission and reception apparatus which prior to 01.01.2007 covered as parts under heading 8529, shifted to 8517.70 which covers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r submitted that Antennas for base station are globally classified as parts under heading 8517.7090. In support, he has referred to the classification of China Customs, Vietnam Customs Tariff, Singapore Customs Tariff and USA Customs Ruling No.36/2009. Further, he has submitted that the decision of Counsel European Commission, consequent upon revision of HSN in 2007, also classified aerials for radio telephony apparatus under Heading 8517.70. 25. Assailing the stand of the Department that in view of Note 2(a) of Section XVI, Antenna is classifiable under Heading 8517.6290, the learned Advocate has submitted that Note 2(a) provides that parts which are goods included in any of the headings of Chapter 84 or 85 are in all cases to be classified in the respective headings and note 2(b) provides that other parts, if suitable for use solely or principally with particular kind of machine to be classified with the machine of that kind. The said note 2(a) cannot be applied for the reason that Antenna are neither specified under Heading 8517.6290 nor do they answer the description "machine" for the reception, conversion, or transmission etc. 26. Further, they have submitted that apart from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ductor and when an alternating current is applied to the antenna, a disturbance is created in the electro-magnetic field, as a result of which electro-magnetic waves are radiated. The antenna is used merely to generate the electro-magnetic waves, which is the medium through which the data is transmitted. Referring to HSN Explanatory Note under Heading 85.17, the learned Advocate submitted that it draws a clear distinction between data such as speech or other sounds and images (referred as signals) and the means of medium used for transmission of data/signals. From the said explanation, it is evident that data (signals) are transmitted between two points through a medium. This medium in the case of a wired network, is a wire and in the case of wireless network, the mediums are the electro-magnetic waves. What is covered under S.H. 8617.62, are the machines for reception, conversion and transmission or re-generation of data and not machines which produce the medium through which the data is transmitted. The role of Antenna in telecommunication network is limited to generate electro-magnetic waves by using electric current as an input. Hence, it is not covered under SH 8517.62, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cus, dt.02.02.2018 consequent upon replacement of education cess by social welfare surcharge; the successor Notification No.11/2018 dt.2.2.2018 at Sr.No.31 mentions that aerials or antennas of a kind to be used as apparatus for radio telephony and radio telegraphy falling under Tariff Item 85177090. Thus, the Government's statutory notification continues to consider the Antennas as "parts" falling under sub heading 85177090. The said notification was issued subsequent to Board's instructions No.1/2018-Cus, dt.15.01.2018. 31. Heard both sides at length, perused the written submissions filed on conclusion of hearing and the records of the case. The issue for determination in both the appeals, filed by the Revenue, centres around the classification of 'Antenna for base station imported by the Respondent used in mobile telecommunication network. 32. The Revenue deviating from the past assessment of classifying the said antenna for base station under CSH 85177090, classified it under CSH 85176290 of Customs Tariff Act, 1975. The Respondent to expedite the clearance of the imported goods, paid the duty under protest, and filed appeal before the learned Commissioner (Appeals), challengi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates the information in the form of an electromagnetic wave in an efficient and desired manner to the destination, where the information is picked up by the receive antenna and passed on to the receiver via transmission line. The signal is demodulated and the original message is then recovered at the receiver. Thus, wireless communication gets established. The Antenna can generate electromagnetic waves from currents and voltages and which can convert electromagnetic waves to currents and voltages and which can convert electromagnetic waves to currents and voltages when these waves impinge on it. In technical language, the Antenna is a device that transform time varying electrical signals into electromagnetic waves at transmit antenna and electromagnetic waves induces voltage/current at receive antenna. Further, the Antenna for wireless communication works at transmit antenna as well as receive antenna". 9. Based on the instructions issued by Board dt.15.01.2018, the functions and technology defined solely and also in view of General Rules for Interpretation the Bills of Entry were assessed correctly. 10. The Appellant says that the impugned Order-in-Appeal No.MUM-CUSTM-AMP-APP- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he normal practice or rejected the request of adjournment of the department and proceeded by disposing the Appeal after hearing the Appellant in a biased manner without putting the department on notice about filing of the Appeal. Thus, in these circumstance, in our view, there is no violation of principles of natural justice in disposing the appeal by the learned Commissioner (appeals) by not adjourning the hearing suo motto for three times without any request for adjournment from the department in this regard. 36. The second preliminary objection raised by the Revenue is that since the duty has been paid under protest, the assessment is not final, therefore appeal against the assessment Order cannot lie before the Commissioner (Appeals). We do not find merit in the said contention of the Revenue in as much as that payment of the disputed amount before or after assessment of the respective bill of entry either under protest or otherwise will not make the assessment provisional/incomplete and not an appealable Order. On the contrary, in view of the principle of law laid down by the Hon'ble Bombay High Court in Karan Associate's case (supra), an assessed Bill of Entry is an appealab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 -- Synchronous digital hierarchy system (SDH) u Free - 8517 50 70 -- Multiplexer, statistical multiplexer u Free - --- Other: u Free - 8517 50 91 ---- ISDN terminals u Free - 8517 50 92 ---- ISDN terminal adapters u Free - 8517 50 93 ---- Routers u Free - 8517 50 94 ---- X25 pads u Free - 8517 50 99 ---- Other u Free - 8517 80 - Other apparatus: u Free - 8517 80 10 --- Attachments for telephones. u Free - 8517 80 20 --- Subscriber end equipment u Free - 8517 80 30 --- Set top boxes for gaining access to the Internet u Free - 8517 80 90 --- Other u Free - 8517 90 - Parts: u Free - 8517 90 10 --- Populated, loaded or stuffed printed circuit boards kg Free - 8517 90 90 --- Other kg Free - 8525 Transmission apparatus for radio-telephony, radiotelegraphy, radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras and other video camera recorders; digital cameras 8525 10 - Transmission apparatus: u 12.5% - 8525 10 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reproducing apparatus u 12.5% - 8527 32 00 -- Not combined with sound recording or reproducing apparatus but combined with a clock u 12.5% - 8527 39 00 -- Other u 12.5% - 8527 90 - Other apparatus: u 12.5% - --- Radio communication receivers u 12.5% - 8527 90 11 ---- Radio pagers u 12.5% - 8527 90 12 ---- Demodulators u 12.5% - 8527 90 19 ---- Other u 12.5% - 8527 90 90 --- Other u 12.5% - 8529 Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528 8529 10 - Aerials and aerial reflectors of all kinds; parts suitable for use therewith: Kg 12.5% - --- Dish antenna: Kg 12.5% - 8529 10 11 ---- For communication jamming equipment Kg 12.5% - 8529 10 12 ---- For amateur radio communication equipment Kg 12.5% - 8529 10 19 ---- Other Kg 12.5% - --- Other aerials or antenna: Kg 12.5% - 8529 10 21 ---- For communication jamming equipment Kg 12.5% - 8529 10 22 ---- For amateur radio communication equipment Kg 12.5% - 8529 10 29 ---- Other Kg 12.5% - --- Other: Kg 12.5% - 8529 10 91 --- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... --- Other u Free - 8517 69 --- Other: u Free - 8517 69 10 --- ISDN System u Free - 8517 69 20 --- ISDN terminal adapter u Free - 8517 69 30 --- Routers u Free - 8517 69 40 --- X 25 Pads u Free - 8517 69 50 --- Subscriber end equipment u Free - 8517 69 60 --- Set top boxes for gaining access to internet u Free - 8517 69 70 --- Attachments for telephones u Free - 8517 69 90 --- Other u Free - 8517 70 - Parts: u Free - 8517 70 10 -- Populated, loaded or stuffed printed circuit boards Kg Free - 8517 70 90 -- Other kg Free - 40. From the above comparative study, it is clear 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's contention, on the other hand, is that the antenna is a passive element. It cannot function on its own unless connected to the base station, Therefore, the same does not fall within the scope and meaning of 'machine' prescribed at Note 5 under Section XVI. 44. In support of their contention that the Antenna imported for base station is a passive element, the Respondent placed on record the opinion of Vinod Gandhi & Associates, Government registered Chartered Engineer. Also, they have placed a letter dt.12.11.2018 issued by the manufacturer of Antenna i.e. M/s Ace Technology, Korea i.e. Antenna supplied by them are passive part of base station i.e. e Node B. It is clarified that the Antenna on its own is not capable of performing any function and when connected, it only transmits and receives only the signals. It is further stated that the Antenna is not performing in any other functions like conversion or regeneration of voice, images or other data signals or switching and/or routing of signals. No technical literature has been placed by the Revenue in support of their contention that the imported Antenna for base stations are designed to function independently as a machine, co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive element, besides the above function, it also performs some more functions as in the case of other entries under the same category, its classification under sub heading 851762 may be attracted, considering the same as an independent of 'machine'. 46. The Revenue's contention to classify the 'Antenna' for base station under sub heading 851762 rests on the ground that as per note 2(a) of section XVI, parts which in themselves constitute an article covered by a heading of this section, in all cases are to be classified in their own appropriate heading even if specially designed to work as part of a specific machine. Further it is contended that Antenna is a part of a machine classifiable under heading 8517, only in the situation when it is not covered by any other headings of the section. As per Department, since it is classifiable under 851762, hence, not to be considered under 851770 as 'parts'. The said Chapter note reads as follows: "2. Subject to Note 1 to this Section, Note 1 to Chapter 84 and to Note 1 to Chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules: (a) pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase Station It is a directional dual-polarized plate antenna with a width of 0.3 m and a length of 1.4 m. The antenna works at 1.7-2.7 GHz frequency band and is part of a base station which plays a role as a core facility for mobile communication. Used in a mobile communication system, the base station antenna receives and transmits electromagnetic waves in the base station system. Its main features are as follows:- * Directivity: horizontal beam width of 65 degrees for cellular sector networking; * High gain: 18dBi; * Vertical beam pointing adjustment function; and * Unique 4.3-10 connector for communication. 8517.70 8517.62 and 8517.70 GIRs. 1 [Note 2(b) to Section XVI] and 6 49. The invoices and the specification of antenna imported submitted during the course of the proceeding confirms the specification mentioned as above. 50. Revenue vehemently opposed to the said opinion of HS Committee stating that it is not binding on the department. We do not find merit in the argument of the Revenue in view of the principle of law laid down by the Hon'ble Delhi High Court in Manisha Pharma Plasto Pvt. Ltd's case (supra), where under it is held that the that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
