Case Law Details
Commissioner of Customs Vs Reliance JioInfocom Ltd (CESTAT Mumbai)
In the present case, the manufacturer of Antenna as well as the chartered engineer’s certificate, in clear terms clarified that the Antenna in question transmits and receives only signals and not performing any other function like 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 dt. 15.01.2018 that the Antenna itself is a complete device and has capability of functioning on its own of conversion of electrical signals into electro-magnetic 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 851762 may be attracted, considering the same as an independent of ‘machine’.
The Revenue’s contention to classify the ‘Antenna’ for base station under sub heading 851762 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 section, in all cases are to be classified in their own appropriate heading even if specially designed to work as part of a specific machine. Further it is contended that Antenna is a part of a machine classifiable under heading 8517, only in the situation when it is not covered by any other headings of the section. As per Department, since it is classifiable under 851762, hence, not to be considered under 851770 as ‘parts’.
A simple analysis of Clause (a) of the above Note reveals that parts which are ‘goods’ required to be classified in the respective headings; in the present case, ‘Antenna’ being a part of the BTS, hence applying the said Rule, classifiable under Chapter Heading Revenue’s interpretation of the said clause(a) in the present case is that in the event if the goods are not falling under any of the sub heading of heading 8517, then only it will be classifiable as ‘parts’, is incorrect. Clause ‘b’ of the said Note 2 indicates that “other parts”, by implication which are not goods, if suitable for use solely or principally with a particular kind of machine of the same heading are to be classified with the machines of that kind or 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, Antennas 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 8517.7090.
In the result, the correct classification of the Antenna for base station is under Sub-heading 85177090 as “parts”. Since, the main issue of classification has been addressed, the other ancillary/alternative submission/issues on the eligibility of various exemption notifications issued in support of the classification of the said goods, becomes more of academic, hence not analysed.
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