TMI Blog2022 (10) TMI 747X X X X Extracts X X X X X X X X Extracts X X X X ..... er in appeal No. 32(Arshiya FTWZ)/2021(JNCH)/Appeals dated 22.06.2021 passed by the Commissioner of Customs (Appeals), Mumbai-II, Nhava Sheva. By the impugned order, the Commissioner (Appeals) held as follows: 12. In view of above, I find that assessments of imported Antenna (Parts of telecommunication equipments) made by the OA by revising the claimed classification from CTH 8570 7090 to 85176290 in 51 Bills of Entry (mentioned in table above) are sustainable. Accordingly, I upheld the Speaking Order Order- in-Original No. 65/2020-21/AC/NS-GEN/CAC/JNCH dated 12.05.2020 in respect of said 51 Bills of Entry. 13. The Appeal filed by M/s. Bharti Airtel rejected accordingly. 2.1 M/s Bharti Airtel Ltd (Appellant) filed 51 Bills of Entry as detailed in table 1 below, for the clearance of the antenna for base station claiming classification under CTH 85177090. These Bills of Entry were reassessed without any speaking order as per Section 17(5) of the Custom Act, 1962 and the classification as claimed by the respondents was modified to 85176290. Table 1: Details of Bills of Entry filed Description of Goods Ante ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 85177090 85176290 22 2003304/14.02.2020 85177090 85176290 23 2003331/15.02.2020 85177090 85176290 24 2003329/15.02.2020 85177090 85176290 25 2003328/15.02.2020 85177090 85176290 26 2003327/15.02.2020 85177090 85176290 27 2003352/15.02.2020 85177090 85176290 28 2003330/15.02.2020 85177090 85176290 29 2003388/17.02.2020 85177090 85176290 30 2003389/17.02.2020 85177090 85176290 31 2003654/19.02.2020 85177090 85176290 32 2003689/20.02.2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S- Gen/CAC/JNCH dated 12.05.2020, reassessing the imported goods as stated above the assessment made on the Bills of Entry by the proper officer were challenged by the appellant before the Commissioner (Appeals) who by the impugned order, referred in para 1 above, rejected the appeal and denied the classification as claimed by the importers while filing the Bill of Entries. 2.3 Aggrieved appellant has filed this appeal. 3.1 We have heard Shri J C Patel, Advocate for the appellant and Shri Ramesh Kumar, Assistant Commissioner, Authorized Representative for the Revenue. 3.2 Arguing for the appellant, learned counsel submitted that: The Issue involved in this appeal is whether Antenna for Base Station is classifiable as Part under CTSH 8517 7090 or as a Machine for reception, conversion and transmission or regeneration of voice, images or other data under CTSH 851762 90. The said issue stands decided in the Respondent's favour by the following decisions of this Hon'ble Tribunal in the Respondent's own case, in which it is held that Antenna for Base Station are classifiable as Part under CTSH 8517 7090 and not under CTSH 8517 62 90: - CC v Reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 70 which specifically mentions Parts . - The following two Notifications of the Central Government clearly recognize and consider Antenna as Parts classifiable under CTH 8517 7090 and not as Machines or Apparatus of CTH 8517 62 90: Sr. No.vi of Notification No.18/2007-Cus dated 22-2- 2007 read with Sr. No.30 of Notification No.69/2004-Cus dated 9-7-2004, issued by the Government of India, as per which Aerials or antennae of a kind used with apparatus for radio telephony , fall under tariff item 8517 70 90 which covers Parts and Sr. No.31 of Notification No. 11/2018 dated 02.02.2018, which covers, 'Aerials or antennae of a kind used with apparatus for radiotelephony and radiotelegraphy falling under Tariff item 8517 7090'. Decision of the HS Committee (World Customs Organization) 62nd session supports the Respondent's case: As per the decision of the HS Committee (World Customs Organization) 62nd session, antenna for base station are classifiable as parts under heading 8517.70 and not as a complete machine or apparatus for reception conversion or transmission or regeneration of voice images or other data under 8517.62. The said decision clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specified function i.e. conversion of electrical signals into electromagnetic waves and vice versa in a wireless communication system, is appropriately covered by the single dash heading -other apparatus for 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 network) of heading 8517 as an transmitting and receiving apparatus for radio-telephony. As per the said instruction the telecommunication antennas, at double dash level, squarely covered by the heading 851762- machines for reception, conversion and transmission or regeneration of voice, image or other data, including switching and routing apparatus. Hon'ble Supreme Court in case of Collector of Central Excise vs Dhiren Chemical Industries wherein it has been held that; 1. The issue involved in these appeals is covered by the decision of a Constitution Bench in Collector of Central Excise, Vadodara v. Dhiren Chemical Industries, also reported in [2002 (139) E.L.T. 3(S.C.). The Constitution Bench interpreted the phrase on which the appropriate amount of duty of excise has already been paid in favour o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own appropriate heading even if specially designed to work as part of a specific machine. Therefore, the goods under consideration would fall under CTH 8517 70 90 as a part of the machine/apparatus classifiable under CTH 8517 only in the situation when it is not covered by any other heading of the section. iv) However, as discussed above, the telecommunication antenna being a complete device with a specified function ie, conversion of electrical signals into electromagnetic waves and vice-versa in a wireless communication system, is appropriately covered by heading Other apparatus for transmission or reception of voice, images on other data including apparatus for communication in a wired or wireless network (such as a local or wide area network): of heading 8517 as an transmitting and receiving apparatus for radio-telephony . Further, at double dash level, it is squarely covered by the heading 8517 62- Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus. From the above it is very clear that the impugned goods are appropriately covered under CTH 85176290 as others @ 20% BC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of this Court or the High Court. So far as the clarifications/circulars issued by the Central Government and of the State Government are concerned they represent merely their understanding of the statutory provisions. They are not binding upon the court. It is for the court to declare what the particular provision of statute says and it is not for the executive. Looked at from another angle, a circular which is contrary to the statutory provisions has really no existence in law. 11. Further, the appellant relied upon the decision of the Hon'ble CESTAT in the case of CC v Reliance Jioinfocom Ltd.- 2019(369)ELT 1713 vide Order A/87015-87016 of 2019 dated 06.11.2019 where Hon'ble CESTAT held that Antenna are not Machines but only parts of Machines and therefore are classifiable under Taiff Heading No 85177090, In this regard, I find that the department has filed an appeal before Hon'ble Supreme Court against this judgment of Hon'ble Tribunal. Also, vide the para 13 of the impugned order the OA stated that CBEC has decided not to withdraw the circular which classify Antenna under sub heading 8517 62 90 even after H.S. Committee decision . 4.4 Distingui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s filed the Civil Appeal Diary No 14797/2020 against the order of CESTAT before the Hon ble Apex Court. The said Civil Appeal has been listed before the Hon ble Apex Court on 18.12.2020, 05.08.2021, 17.09.2021, 11.11.2021 and 28.03.2022. The order passed by the bench on the last day is reproduced below: CIVIL APPEAL Diary No(s). 14979/2020 (Arising out of impugned final judgment and order dated 06-11- 2019 in CA No. 85882/2018 06-11-2019 in CA No. 85883/2018 passed by the Custom Excise Service Tax Appellate Tribunal, West Zonal Bench At Mumbai) COMMISSIONER OF CUSTOMS (IMPORT) Petitioner(s) VERSUS M/S RELIANCE JIO INFOCOM LTD. Respondent(s) (IA No.82614/2020-EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT and IA No.82613/2020-STAY APPLICATION and IA No.82612/2020-CONDONATION OF DELAY IN FILING APPEAL ) Date : 28-03-2022 This petition was called on for hearing today. CORAM : HON'BLE MR. JUSTICE A.M. KHANWILKAR HON'BLE MR. JUSTICE ABHAY S. OKA For Petitioner(s) Mr. Balbir Singh LD ASG Mr. Mukesh Kumar Maroria, AOR Mr. Rupesh Kumar, Adv. Mr. Bhuvan Mishra, Adv. Mr. Udai Khanna, Adv. For Respondent(s) Mr. K. R. Sasiprabhu, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, images or other data, including switching and routing apparatus 8517.69 - - Other 8517.70 - Parts This heading covers apparatus for the transmission or reception of speech or other sounds, images or other data between two points by variation of an electric current or optical wave flowing in a wired network or by electro-magnetic waves in a wireless network. The signal may be analogue or digital. The networks, which may be interconnected, include telephony, telegraphy, radio-telephony, radiotelegraphy, local and wide area networks. .. (E) Telephonic or Telegraphic Switching Apparatus. (1) Automatic switchboards and exchanges. These are of many types. The key feature of a switching system is the ability to provide, in response to coded signals, an automatic connection between users. Automatic switchboards and exchanges may operate by means of circuit switching, message switching or packet switching which utilize microprocessors to connect users by electronic means. Many automatic switchboards and exchanges incorporate analogue to digital converters, digital to analogue converters, data compression/decompression devices (codecs), modems, m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption of digital information. (6) Pulse to tone converters which convert pulse dialed signals to tone signals. PARTS Subject to the general provisions regarding the classification of parts (see the General Explanatory Note to Section XVI), parts of the apparatus, of this heading are also classified here. 12. Corresponding Customs Tariff entries for 8517 are read as under - Other apparatus for 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 network): 8517 61 00 -- Base stations 8517 62 -- Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus: 8517 62 10 --- PLCC equipment 8517 62 20 --- Voice frequency telegraphy 8517 62 30 --- Modems (modulators-demodulators) 8517 62 40 --- High bit rate digital subscriber line system (HDSL) 8517 62 50 --- Digital loop carrier system(DLC) 8517 62 60 --- Synchronous digital hierarchy system(SDH) 8517 62 70 --- Multiplexers, statistical multiplexers 8517 62 90 --- Other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation, where the information is picked up by the receiving 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, the wireless communication gets established. It is the contention of the department that since the antenna can generate electromagnetic wave from current and voltages and which can convert electromagnetic wave to current and voltages with these waves impinge on it, therefore, it can be considered as a machine, which independently receives and transmits electromagnetic waves. 43. The respondent'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 dated 12-11-2018 issued by the manufacturer of antenna i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ike conversion or regeneration of voice, images or other data signals and switching/routing of signals. Therefore, the antenna stand alone cannot be considered as a 'machine', attracting classification under Heading 8517.62. Consequently, the observation of the department in the circular dated 15-1-2018 that the Antenna itself is a complete device and has capability of functioning on its own of conversion of electrical signals into electromagnetic waves and vice versa in a wireless communication system cannot be applied to the present goods as it would be complete only when connected to a base station. In the event if the antenna so designed, instead of working as a passive 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 8517 62 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 8517 62 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 sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the headings mentioned under the said clause (b) as appropriate. Further, it is mentioned that parts which are equally suitable for use principally with the goods of Heading 85.17 and Headings of 8517 and 8525 to 8528 are to be classified as Headings of 8517. Therefore, antenna since parts of BTS, as held by Hon'ble Supreme Court in Hutchison Essar South Ltd.'s case (supra), therefore, be classified as parts under Tariff Item 8517.7090. 20. We also find that Hon'ble Apex Courts has dealt the issue of classification of parts in the case of N.I. Systems India P. Ltd. - 2010 (256) ELT 173 (SC) = 2010-TIOL-52-SC-CUS and held as under:- 28. For the reason given hereinafter, we hold on the basis of technical material (including the importer's own catalogue and webcast) that Controllers (including embedded controllers) are not merely PCs/ADPMs, but have a specialized structure and specific functions to perform and are therefore classifiable under Chapter 90. 29. Similarly, I.O. Modules and Chassis, which are the subject matter of import in this civil appeal are meant to operate as parts of industrial Process Control equipments like sensors. These I.O. Mod ..... X X X X Extracts X X X X X X X X Extracts X X X X
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