TMI Blog2023 (6) TMI 907X X X X Extracts X X X X X X X X Extracts X X X X ..... oms, dated 30.06.2017, as amended - HELD THAT:- When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must he interpreted in favour of the revenue. The notification clearly excludes carrier ethernet switches from the purview of the duty benefits. As per the technical expert TEC these goods can function as carrier-grade ethernet switches. Accordingly the benefit of Sr. No. 20 of Notification No. 57/2021 -Customs would not be available in the instant case. Notification benefit under Sr. No. 13N of Notification No. 24/2005, as amended - HELD THAT:- In the present case, the entry describes goods as Routers . It does not specify indentation, conditions or capacity and capability for such routers. It does not bar the routers used by telecom networks, support service providers and data centres. It does not exclude routers capable of performing secondary functions. The impugned goods, on the application of GIR I and Note 3 to Section XVI read with the technical opinion of the TEC merit classification as routers based on their principal function of routing. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of models 7500R, 7500R3 and 7280R3 are devices used to deliver to the needs of large-scale data centres/enterprise networks and are equipped with large routing tables allowing for internet peering, interconnection and inter-Data Center networking. The product is a combination of a network switch and a router. A network switch connects devices on a computer network by using packet switching to receive and forward data. They connect multiple devices such as computers, wireless access points, printers, and servers. A switch enables connected devices to share information and interact with each other. A router is a device that connects computers and other devices to the internet. While a- switch connects various devices in a network, a router connects devices across multiple networks. DCSRs perform the function of a network switch and a router. In other words, it is capable of connecting the devices within the network as well as across multiple networks. Thus, the need for a separate switch and a router for performing switching and routing functions can be overcome with the installation of the DCSR. 2.2 As per the applicant, these devices are deployed in a wide range of open netwo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tus. Thus, any apparatus that performs the function of routing will be covered under the said tariff item. DCSRs under consideration in the present application are capable of performing routing functions. The fact that the DCSRs can also perform the function of switches would not disentitle them from the exemption granted. The applicant further stated that it is a settled legal position that when an exemption is granted for a machine performing a function, it cannot be denied merely because the machine is capable of performing other functions also. In support of the above, they have submitted decisions in Twenty-First Century Printers v. CC [2003 (162) E.L.T. 1045 (Tri. - Del.)], Escorts Tractors Ltd v. CC [1998 (98) E.L.T. 717 (Tribunal)] and Escorts Limited v. CC [1996 (88) E.L.T. 379 (Tribunal)]. 2.5 Sr. No. 20 of Notification No. 57/2017-Customs, dated 30.06.2017, as amended, provides for the levy of Customs duty at the concessional rate of 10%. In the said notification, the goods falling under sub-headings 85176290 or 85176990, except the goods specified therein, are eligible for a concessional rate of duty. Following are the goods for which such concessional rate of basic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide office letter bearing F. No. TEC/IT/TecDisc/2015, dated 03.05.2016 and office memorandum no. 18-33/2013-IP, dated 18.11.2016. It was clarified that there is no definite technical bifurcation between carrier ethernet switches and enterprise ethernet switches based on features or services supported as there could be overlapping features. Classification can only be ascertained based on the purchase order from the ultimate consignee. They can be classified based on the usage of such devices by TSP/ISP or the customer location where these devices will be used. In the above clarification, it was also emphasised that the classification will be based on the findings of the customs authority. 2.6 In relation to the above-mentioned goods, the questions on which advance rulings have been sought are as follows: - 1) Whether DCSRs being imported by the applicant are classifiable under the Tariff Item 8517 62 90 of the Customs Tariff of India? 2) If the to the above question are negative then what would be the correct classification of the DCSRs under the Customs Tariff of India? 3) Whether DCSRs are eligible for claiming the benefit under Sr No. 13N of Notification No. 24/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in their case before any officer of customs, appellate tribunal or any court of law. In response to a similar matter as raised in the question(s) by the applicant has already been decided by the Appellate Tribunal or any Court, the applicant has stated that there is no decision covering products under consideration 4. An opinion on the products under consideration was sought from Telecommunication Engineering Centre (TEC), Department of Telecommunication vide letter dated 13.09.2022. TEC vide their letter dated 23.09.2022 opined that, as per data sheets, these products have features which can support carrier ethernet. Accordingly, depending upon its use in the telecom network it may work as a carrier ethernet switch. TEC also mentioned that in some of the products under consideration features supporting MPLS-TP functionality are present and therefore, such products can work as MPLS-TP products, Further, vide letter dated 03.11.2022 TEC stated that from the available information it appears that these products are primarily routers. Further using customized product configurations these products may work as both switches and routers. Depending upon deployment in a telecom network, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any one of the functions covered under such exemption. For the above contention, they have cited case laws of Andhra Patrika, Madras v. Collector of Customs reported in 1983 (13) E.L.T. 1103 (CEGAT), Collector of Customs v. Blue Star Ltd. reported in 1990 (50) E.L.T. 186, Twenty-First Century Printers v. Collector of Customs Bombay 2003 (162) E.L.T. 1045 (Tri. - Del.). They have further submitted that the undertaking should be considered to determine the nature of the product as is usually done with respect to the products, the determination of whose end use is significant for ascertaining the rate of duty applicable. They have cited case laws of Segal's Pharmacy v. Collector of Customs 1993 (64) E.L.T. 209 (Tribunal), M/s Healthcare Pvt. Ltd. V. Commissioner of Cus (Imports), Mumbai 2013 (296) E.L.T. 375 (Tri-Mumbai) in support of the above argument. In response to TEC comments, the applicant has stated that the TEC has not deviated from its stance that the end-use of the product, that is whether it is being sold to carrier or non-carrier can help determine whether the same shall be of carrier-grade or noncarrier grade. Further, the applicant has stated by citing the case law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528. The second one-dash subheading of heading 8517 covers 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). This group includes apparatus which allows for the connection to a wired or wireless communication network or the transmission or reception of speech or other sounds, images or other data within such a network. Communication networks include within, inter alia, carrier-current line systems, digital-line systems and combinations thereof. They may be configured, for example, as the public switched telephone networks, Local Area Networks (LAN), Metropolitan Area Networks (MAN) and Wide Area Networks.(WAN), whether proprietary or open architecture. This group includes (1) Network interface cards (e.g., Ethernet interface cards) (2) Modems (combined modulators-demodulators) (3) Routers, bridges, hubs, repeaters and channel-to-channel adaptors (4) Multiplexers and related line equipment (e.g., transmitters, receivers or electro-optical converters) (5) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uded from the said notification. 6.1 The applicant has stated that the intended use and the undertaking of the applicant for the same should be considered for the notification benefit. The Delhi Tribunal in the case of Guest Keen William 1987 (29) ELT 68 has observed that it is an accepted position that a notification should be interpreted on the basis of the language used therein and not on the basis of intendment or by supplying words or ignoring them. Further, in the case of Commissioner of Cus. (Import), Mumbai versus Dilip Kumar Company, 2018 (361) E.L.T. 577 (S.C.), the Hon'ble court observed that indeed, it is well-settled that in a taxation statute, there is no room for any intendment; that regard must be had to the clear meaning of the words and that [he matter should be governed wholly by the language of the notification. Equity has no place in the interpretation of a tax statute. Strictly one has to look to the language used; there is no room for searching intendment nor drawing any presumption. Therefore, the indentation or undertaking would not influence the interpretation of the notification. 6.2 The applicant has opined that exclusionary clauses in an e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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