In re Sanmina SCI India Private Ltd. (CAAR Mumbai)
The Customs Authority for Advance Rulings, Mumbai examined an application seeking clarity on the classification and customs duty exemption applicable to various AC-DC power modules and DC-DC converter power modules imported for use in telecommunication equipment. The application concerned multiple models of power modules used in the manufacture of Wi-Fi receivers, Wi-Fi transmitters, data-centre switches, uplink cards, and other telecommunication devices. The applicant sought confirmation of the correct tariff classification under the Customs Tariff Act, 1975, and the applicability of a nil rate of Basic Customs Duty under Serial No. 4 of Notification No. 25/2005-Customs.
The Authority noted that the issue raised was squarely covered under Section 28-I(2) of the Customs Act, 1962, as it related to classification of goods. It examined the technical characteristics and functioning of the imported AC-DC power modules and DC-DC converter power modules. Based on the detailed specifications, the Authority found that AC-DC power modules convert alternating current into direct current, while DC-DC converters convert direct current from one voltage level to another. These products perform voltage conversion, regulation, filtering, and protection functions and incorporate components such as transformers, inductors, capacitors, resistors, and switching elements.
Relying on the Customs Tariff, General Rules for Interpretation, Section and Chapter Notes, and the World Customs Organization Harmonized System Explanatory Notes, the Authority held that such products fall within heading 8504, which covers “Electrical transformers, static converters and inductors.” It observed that DC-DC converters are specifically covered under the category of “static converters,” and that the inclusion of auxiliary components does not alter their essential character as static converters. Since the relevant sub-headings under 8504 40 did not specifically enumerate DC-DC converters, the Authority concluded that the goods were correctly classifiable under tariff item 8504 40 90 as “Other static converters.”
