Custom
TRT-2025-
Cestat New Delhi
Date:-20-09-22
In:-
Issue Favourable to Tax Payer ?:-
Order date – 20 September 2022
Key Pointers–
- The Appellant, M/s. Vodafone Idea Limited, described the Products (Router Line Cards) imported by them as MP071025 CISCO BOQ-19 4*10G PRE-AGG 1B Router Line Card (Part of Router) (Non-WPC) (For Cellular Telephony Network) and claimed classification under CTI 8517 70 90. The appellant also claimed exemption from payment of duty under serial no. 5 of the notification no. 57/17-Cus dated 30.06.2017.
- A SCN proposing to re-classify the Product under CTI 8517 69 90 was issued and differential customs duty of Rs.60, 11, 615/- was proposed to be demanded under section 28(1) of the Customs Act. The show cause notice mentions that the imported ‘Product’ is a communication apparatus in itself and, therefore, would not be classifiable as parts of Router under CTI 8517 70 90.
- The issue involved in this appeal is the classification of the imported goods which are Router Line Cards.
- The Tribunal observed that the individual Router Cards perform functions inseparable from that of the equipment. For example, a Router requires a line card to operate as much as the line card requires the power and intelligence of the Router to operate. This is distinct from a Network interface card (NIC), which other than drawing power from the Automatic Data Processing (ADP) machine, operates separately and independently of the ADP machine by performing the sole function of translating the output of the ADP machine. NIC would, therefore, qualify as ‘an apparatus’.
- Main-equipment (i.e. the desktop/laptop) can operate and function even in the absence of a NIC. This is in contrast to line cards which are essential for the Routers to operate.
- Even from the HSN Explanatory Notes to Heading 85.17, Category II (G), NICs have been clubbed in the same category/class of equipments such as modems, routers, hubs, repeaters, multiplexers, etc. These equipments are clearly standalone apparatus which are independently capable of performing their functionality. Thus, sub units/sub-assemblies of equipments such as modems, routers, hubs, repeaters, multiplexers would not be apparatus and NIC (i.e. a standalone apparatus) cannot be compared with Router Line Cards.
- Thus, the Tribunal held that the Router Line Cards imported by the appellant would be classified under CTI 8517 70 90 and not CTI 8517 69 90.
- Appeal Allowed.
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