TMI Blog2021 (10) TMI 1316X X X X Extracts X X X X X X X X Extracts X X X X ..... under consideration. Passive antennas - HELD THAT:- Keeping in view the functionality, there doesn't appear to be significant difference between the two antennas involved in the present proceedings vis-a-vis the antenna for base stations in the case of Reliance Jio Infocom. In view of the aforementioned line of reasoning, I am inclined to concur with the views of the applicant w.r.t. the issue of classification of the Antenna 1 and Antenna 2 and not inclined to accept the views of the jurisdictional Commissioners of Customs - the views of the Commissioner of Customs, ACC, Mumbai is influenced by the Board's instructions, which was discussed in detail in the Reliance Jio Infocom case and did not find favour. Besides, the views of the Commissioner of Customs, ACC, Mumbai do not take into account the change in the tariff w.e.f. 01.01.2022, which appears to be in compliance of the recommendations of the HS Committee of the WCO. Since, I am inclined to hold the classification of antennas under heading 8517, specifically under sub-heading 85177090, the suggestion of the Commissioner of Customs, Chennai to classify antennas under heading 8529 doesn't appear to have merit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is held that proper classification is sub-heading 85044090. However, none of these three devices are meant for use in automatic data processing machines or telecommunication apparatus - the relevance of Notification 50/2017-Cus. dated 30.6.2017 to the present proceedings is not understood. None of the eight items under consideration in the present proceedings are classifiable under heading 8537. Application disposed off. - Ruling No. CAAR/Mum/ARC/59/2021 In Application No. CAAR/CUS/APPL/18/2021 -0/o Commr-CAAR-MUMBAI - - - Dated:- 8-10-2021 - M.R. OHANTY, CUSTOMS AUTHORITY FOR ADVANCE RULINGS, MUMBAI. Present for the applicant : Shri Lakshmikumaran, advocate, Sh. Prasad Salvi, Sh. Anand Tripurai, Sh. Jeshwin Immanuel, Sh. Ashwini Bhatia Present for the Department : None Ruling Amazon Digital Services Private Limited has filed an application, digitally, seeking advance rulings on classification of, (i) Networking device with Model No. N3XU6S (Outdoor Unit), (ii) Networking device with Model No. N3XU5S (Outdoor Unit), (iii) Networking device with Model No. N3XU7S (Indoor Unit), (iv) Antenna (Passive) with Model No. S8RL4H, (v) Antenna (Passive) with Mod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eo content like movies, series, etc. The Fire TV sticks are provided to customers as part of the service and are to be returned by the customers on termination of service. The Fire TV sticks provided to customers are not the same as the ones that are available in the market as the software of these Fire TV sticks is modified to provide only a limited amount of the content otherwise available. According to the applicant, two kinds of networks can be created by the devices involved in the present application, namely, Network N2B and Network N3. Both these networks enable customers to access content through the Fire TV stick, without owning a data connection as internet is accessed for this purpose through the outdoor/indoor units. 3. The applicant has explained the working of the devices in question to form Network N2B is as follows: - (i) The ODU 1: - It is installed on the rooftop of a building and receives access to internet via LAN cable from a third-party Internet Service Provider (ISP). Further, the ODU 1 is connected to an external Hard Disc Drive (HDD) via a switch placed on the rooftop. This HDD stores cached content to be provided to customers for viewing content on d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts these RF signals to ODU 2 in the form of RF electrical signals via RF cables. ODU 2 then converts the electrical signals into RF signals and transmits the same to ODU 1 wirelessly. ODU 1 in turn converts the RF signals into electrical signals and searches for the content demanded in the cached data in the HDD. If the content is not found on the HDD of the same building or the HDD of neighbouring buildings (connected wirelessly or via wires), then ODU 1 retrieves the content from the Amazon cloud via LAN cable. The required content received by ODU 1 in the form of electrical signals via the LAN cable is converted into RF signals to be transmitted to ODU 2. ODU 2 converts the RF signals into electrical signals to be transported over the RF cables to Antenna 1/Antenna 2. Antenna 1/ Antenna 2 in turn radiates the signals to the Fire TV for viewing by the customer. 5. The working of the devices in question to form Network N3 has been explained as follows: - (i) The IDU: - It is installed within the customer premises, i.e., inside each house that is to be served. It has two internal radios of 2.5 Ghz and 5 Ghz. The IDU receives access to internet via LAN cable connected to a swi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... positive, whether the applicant is eligible to claim benefit of Sr. No. 05 of Notification No. 57/20I7-Customs, dated 30.06.2017? (f) If the answer to question (c) is in the positive, whether the applicant is eligible to claim benefit of Sr. No. 04 of Notification No. 25/2005-Customs, dated 01.03.2005? 9. In the original application, the applicant had requested that a copy of the application and enclosures may be forwarded to the Chairman of the Central Board of Indirect taxes and Customs to designate a Commissioner of Customs as per Regulation 13 of Customs Authority for Advance Rulings Regulations, 2021. The Secretary to the CAAR, Mumbai requested the applicant to furnish precise information w.r.t. the Principal Commissioner/Commissioner of Customs under whose jurisdiction the proposed imports would be made. In reply, the applicant has listed the air cargo complexes at Delhi, Bengaluru, Chennai and Mumbai; as well as the seaports of Chennai and Nhava Sheva as their intended ports of import. Accordingly, the application for advance rulings was sent to all the above-mentioned Principal Commissioners/Commissioners of Customs and reminders have been issued. However, comments ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng was fixed on 23.09.2021. However, once again, adjournment was sought on the ground of preoccupation of the lead counsel before the Hon'ble High Court of Telangana. Finally, the hearing could take place on 29.09.2021. The counsels for the applicant and its own representatives present during the virtual hearing have explained the functional ities of all the devices involved in the present proceedings. It was also explained that all the eight items involved in the present proceedings are intended to be used together in one network architecture and that is why all of them were grouped together in one application. The applicant has also made additional submissions in support of their application. These additional submissions include relevant extracts of the Customs Act, 1962; the Customs Authority for Advance Rulings Regulations, 2021; General Rules of Interpretation, Notes to Section XVI, Customs Tariff relating to headings 8504, 8517, 8529, 8536 and 8537 along with related HSN Explanatory Notes; decision of the WCO HS Committee in their 62nd session on antenna for base stations, IEEE standard definitions terms for antennas, new entry for antennas in the Indian Customs Tariff in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner of Customs, seaport, Chennai; and ACC, Mumbai; are of the opinion that the correct classification of these three devices is sub-heading 87176290 which is a residual entry under '8517 62 -- Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus.' From the functionality point of view, there is no doubt that all these three devices carryout the functions of reception, conversion, transmission, and regeneration of voice, images, data etc. However, it is also clear that utility of these devices ultimately lies in their ability to provide content for view on a television set. Therefore, an alternative tariff entry for these goods can be 8525 (TRANSMISSION APPARATUS FOR RADIO-BROADCASTING OR TELEVISION, WHETHER OR NOT INCORPORATION RECEPTION APPARATUS OR SOUND RECORDING OR REPRODUCING APPARATUS; TELEVISION CAMERAS, DIGITAL CAMERAS AND VIDEO CAMERA RECORDERS), which is required to be eliminated before the tariff entry 85176290 can be accepted. According to the HSN Explanatory Notes, the apparatus for radio broadcasting falling in this heading must be for the transmission of signals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it classification under sub-heading 85291029 while the Commissioner of Customs, ACC, Mumbai has proposed the sub-heading 85176290 based on the Instruction No. 1/2018-Cus., dated 15.01.2018 issued by the CBIC. The HS Committee of WCO, in their 62nd session held in September, 2018; recommended heading 851770 for classification of antennas for base stations as well as microwave antennas. Section 104 of the Finance Act, 2021 has amended the Customs Tariff Act in the following manner: - `The First Schedule shall, - (i) be amended in the manner specified in the Second Schedule; (ii) with effect from the 1st April, 2021, be also amended in the manner specified in the Third Schedule; and (iii) with effect from the 1st January, 2022, be also amended in the manner specified in the Fourth Schedule. ' The relevant extracts of the Fourth Schedule, referred supra, reads as under: - `(d) for sub-heading 8517 70, tariff items 8517 70 10 and 8517 70 90 and the entries relating thereto, the following shall be substituted, namely: - - Parts: 8517 71 00 - - Aerials and aerial reflectors of all kinds; parts suitable for use therewith' The aforementioned change would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Infocom. In view of the aforementioned line of reasoning, I am inclined to concur with the views of the applicant w.r.t. the issue of classification of the Antenna 1 and Antenna 2 and not inclined to accept the views of the jurisdictional Commissioners of Customs. As mentioned above, the views of the Commissioner of Customs, ACC, Mumbai is influenced by the Board's instructions, which was discussed in detail in the Reliance Jio Infocom case and did not find favour. Besides, the views of the Commissioner of Customs, ACC, Mumbai do not take into account the change in the tariff w.e.f. 01.01.2022, which appears to be in compliance of the recommendations of the HS Committee of the WCO. Since, I am inclined to hold the classification of antennas under heading 8517, specifically under sub-heading 85177090, the suggestion of the Commissioner of Customs, Chennai to classify antennas under heading 8529 doesn't appear to have merit since that heading applies to parts suitable for use solely or principally with the apparatus of heading 8525 to 8528. 13. PoE Injectors, according to the applicant, connect to a power socket and converts AC voltage received from the socket to provide 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escribed by the applicant can be called composite machines to attract the mandate of the aforementioned section notes. The devices for which advance rulings are sought would be used in a particular network architecture, but these devices, taken together, cannot be called as a composite machine. The applicant has cited the US Cross Ruling N301401, dated 7.11.2018 which has considered classification of POE Injectors (electronic devices used to provide power and data transmission over a single media cable). Based on the facts that, injectors take a data only connection from a business router or switch and add power via an AC power adapter connected to standard U.S. outlet; that they transmit both the power and the data over an Ethernet cable to a POE-enabled device, such as a camera, an access point or an IP phone; that, injectors are only needed when the source device does not have a POE-enabled output; that, injectors can be used by themselves or with a POE Splitter; that, the POE injectors do not alter the data, they only add power to the transmission cable; that the output is automatically determined based upon the necessary power requirements, up to a maximum of 15.4W, and they a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Injector and Adapters I and 2, I have held that proper classification is sub-heading 85044090. However, none of these three devices are meant for use in automatic data processing machines or telecommunication apparatus. Therefore, I hold that the benefit of this exemption would not be available. Finally, the relevance of Notification 50/2017-Cus. dated 30.6.2017 to the present proceedings is not understood. None of the eight items under consideration in the present proceedings are classifiable under heading 8537. Therefore, I am not giving any consideration to this notification. In view of the discussions, as aforesaid, I rule as under: - (a) Networking devices with Model Nos. N3XU6S, N3XU5S and N3XU7S are held classifiable under sub-heading 85176290 of the first schedule to the Customs Tariff Act, 1975. (b) Passive antennas with Model Nos. S8RL4H and S8RL4G are held classifiable under subheading 85177090 of the first schedule to the Customs Tariff Act, 1975. (c) PoE injector with Model No. POE16R - AFG, AP 23 adaptors with Model Nos. LA23IN, and PA23IN are held classifiable under sub-heading 85044029 of the first schedule to the Customs Tariff Act, 1975. (d) Passiv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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