TMI Blog2023 (11) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, not be covered by this exclusion clause and, therefore, may not be excluded from the scope of Serial No. 13? HELD THAT:- What needs to be remembered is that MIMO is a technology and cannot be treated as an independent product. If the intention was to exclude even products having only MIMO technology, then the word products should have been used after MIMO as well as after LTE. It, therefore, follows that the scope of products excluded by entry (iv) would be products which use both MIMO and LTE. Thus, the term Multiple Input/Multiple Output (MIMO) and Long Term Evolution (LTE) Products means products which contain both MIMO and LTE. This view finds support from the the decision of Division Bench of the Tribunal in Ingram Micro India [ 2020 (11) TMI 9 - CESTAT CHENNAI] confirmed the classification of identical product (i.e. WAP) under CTI 8517 62 90 and extended the benefit of the subsequent notification dated 30.07.2017. The Department has accepted the Order passed by the Tribunal. Therefore, once the benefit has been granted to Ingram Micro in the subsequent notification for an identical product, the benefit under the notification dated 01.03.2005, as amended on 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chnology products. It imported WAP from various foreign suppliers for trading purpose in India and it classified the imported WAP under CTI 8517 62 90 during the period from July 2014 to June 2017. According to the appellant, WAP works on Multiple Input/Multiple Output MIMO technology, but does not support Long Term Evolution LTE standard. 4. It would, therefore, be necessary to state briefly about WAP, MIMO and LTE: (i) WAP: It is a networking device used for wireless communication within the Local Area Network LAN . It helps in connecting wireless enabled devices such as Laptops, Smartphone, Tablets etc., to a wired network; (ii) MIMO: It is a technology wherein multiple antennas are used simultaneously for transmission and multiple antennas are used simultaneously for reception; (iii) LTE: In telecommunication, it is a standard for highspeed cellular communication for mobile devices and data terminals. It increases the capacity and speed using a different radio interface together with core network improvements. 5. The issue in this appeal pertains to the availability of exemption from the whole of the customs duty by Beetal Teletech under Serial No. 13 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the conjunctive 'and ' has been used without using the term 'product' for both the items. Further, if the purpose was to apply the said condition on products having both MIMO technology and LTE standards, then Serial No. 13(iv) would have read as follows: (i) LTE products having MIMO technology OR (ii) LTE products with MIMO technology 8. Secondly, the show cause notice notes that between the words MIMO and LTE , and is placed but it is not followed by a comma. The show cause notice places reliance on the judgment of the Supreme Court in Shree Durga Distributors vs. State of Karnataka 2007 (212) E.L.T. 12 SC . 9. The show cause notice also invokes the extended period of limitation contemplated under section 28(4) of the Customs Act, 1962 the Customs Act , apart from the proposals for confiscation of imported goods under section 111 (m), penalties under sections 112 and/or 114AA and 114AA of the Customs Act. Further, it proposes to impose personal penalty on Ranbir Bhandari under sections 112 and 114AA of the Customs Act. 10. The show cause notice was adjudicated upon by the Additional Director, in favour of Beetal Teletech for the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducts with or having MIMO technology ; (v) MIMO technology is a sub-set technology of LTE architecture, protocols and system. Further, it is not mandatory to have both MIMO and LTE; (vi) Argument that WAP is essentially an Information Technology device and as the exclusion clause is meant to cover only telecom equipment and devices, WAP cannot be excluded from the exempted category is misconceived; (vii) WAP is at the terminal point of the radio communication systems, which is both external and internal to a building or large spaces etc., in its spread. It is very much a part of the radio communications systems; and (viii) TRAI, in its recommendations on Telecom Equipment Manufacturing Policy dated 12.04.2011 has regarded Wi-Fi WAP as a broad band equipment under the category of Telecom equipment. Further, the notification dated 05.10.2012 issued by the Department if Telecommunications, following the policy of preferential treatment to indigenous manufacturers in Government purchases, has categorized WAP as Wi-Fi based broadband wireless access systems . The amendment made by the notification has taken out specified telecom products for increasing the BCD to 10% and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, once the benefit has been granted to Ingram Micro in the subsequent notification for the identical product, the benefit under the notification dated 01.03.2005, as amended on 11.07.2014, should also be extended; (v) India is a signatory to the Information Technology Agreement dated 13.12.1996 by the World Trade Organization. The Information Technology Agreement requires each participant to eliminate and bind customs duties at zero for all products specified in the Agreement. India signed the Agreement on 01.07.1997. Pursuant to Information Technology Agreement, India introduced the notification. At the time of introduction, all goods falling under Customs Tariff Heading CTH 8517 were exempted from payment of duties. In 2014, on specified telecommunication products that were not covered under the Information Technology Agreement, the Government imposed customs duties by notification dated 11.07.2014. The Finance Minister s Budget Speech for the year 2014-15 and Tax Research Unit letter dated 10.07.2014 clarifies that BCD on specified telecommunication products not covered under the Information Technology Agreement is being increased from NIL to 10%. As WAP is an Inform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be urged that the scope of clause (iv) can be restricted to those products that have MIMO and LTE both and that the product that only has MIMO technology may, therefore, not be covered by this exclusion clause and, therefore, may not be excluded from the scope of Serial No. 13. 18. The contention of the Department is that and should be read as or in clause (iv) so that it would cover MIMO products or LTE products. The contention advanced on behalf of Ingram Micro is that since the exclusion clause (iv) uses the conjunction and its scope would be restricted to those products that have both MIMO and LTE. Thus, according to Beetal Teletech a product that has only MIMO technology would not be covered by the exclusion clause and, therefore, would not be excluded from the scope of Serial No. 13 (iv). 19. The submission advanced by learned counsel for the respondent deserves to be accepted. 20. It needs to be remembered that and is a conjunctive and is used to connect and join. The dictionary meaning of and is as follows. The New International Webster's Comprehensive Dictionary of the English Language: And: Also; added to; as well as; a particle denoting additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based on MIMO technology. Thus, the expression products , appearing after LTE has to be read with MIMO to mean and cover MIMO products. Further, products being the common factor for both MIMO technology and LTE standard, the expression and has been used in a conjunctive way to cover individually MIMO products and LTE products. Learned special counsel, therefore, contended that as there are only two types of products at Serial No. 13 (iv), the conjunctive and has been used without using the term products twice. There is, therefore, no ambiguity and the expression Multiple Input/Multiple Output (MIMO) and Long Term Evolution (LTE) Products denotes Multiply Input/Multiple Output (MIMO) products on the one hand and Long Term Evolution (LTE) products on the other. There is, therefore, no need to refer to the World Trade Organisation ITA. 23. Though it is correct that clause (iv) would effectively mean include two categories of products namely MIMO and LTE and that they have distinct identities, but it is not possible to accept the contention advanced by learned special counsel for the Department that MIMO does not by itself mean anything unless it is followed by the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... njab and Haryana High Court in Kulcip Medicines also observed as follows: 11. The question which falls for consideration is whether word and used after the word clearing but before the word forwarding at two places in clause (j) be considered in a conjunctive sense or dis-injunctive sense. It appears to be fairly well settled that the context and intention of legislature are the guiding principles. In that regard reliance may be placed on the judgment of Hon ble the Supreme Court in the case of Mazagaon Dock Ltd. v. CIT (1958) 34 ITR 368. By necessary intendment the expression a clearing and forwarding agent in relation to clearing and forwarding operations, in any manner contemplates only one person rendering service as clearing and forwarding agent in relation to clearing and forwarding operations . To say that if, one person has rendered service as forwarding agent without rendering any service as clearing agent and he be deemed to have rendered both services would amount to replacing the conjunctive and by a disjunctive which is not possible. (emphasis supplied) 27. A Division Bench of the Tribunal in Ingram Micro India also confirmed the classification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that an exclusionary clause in an exemption notification should be strictly construed and must be given a narrow meaning so as to not frustrate the intention behind the exemption notification. In this regard, reliance can be placed on the decision of Supreme Court in Pappu Sweets and Biscuits versus Commissioner of Trade Tax, U.P., Lucknow 1998 (10) TMI 452-Supreme Court , wherein the Supreme Court observed: 10. The notification further discloses that the object of declaring exemption from payment of sales tax was to increase industrial activity within the State by encouraging setting up of new industrial units or expansion, diversification or modernization by the existing industrial units. At the same time the State did not desire to extend that benefit to all such industries. It was therefore specifically stated in the notification that industries mentioned in Annexure II shall not be entitled to the benefit of exemption from payment of tax or reduction in rate of tax. Presumably, the State did not desire further growth of such industries by suffering loss of revenue. What is however necessary to note is that Annexure If is an exclusionary part of exemption notification. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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