Case Law Details
In re Nokia Solutions and Networks India Private Ltd (CAAR Delhi)
The Customs Authority for Advance Rulings, Delhi, recently addressed the classification dispute surrounding Dense Wavelength Division Multiplexers (DWDM) and Optical Transport Network (OTN) technology. This case involves M/s. Nokia Solutions and Networks India Private Ltd., which sought an advance ruling on the appropriate classification of equipment cards. The company had been classifying these cards under CTH 85176290, but recent developments, including a judgment by the Hon’ble Mumbai Tribunal, prompted them to seek clarity.
Detailed Analysis
The applicant’s classification of cards delivering DWDM and OTN technology was based on their functionality—reception, conversion, and transmission of data/signals. The application referenced Circular No. 8/2023, dated 13th March 2023, supporting their classification under S. No. 20 of Notification No. 57/2017. However, the Mumbai Tribunal’s decision in the case of M/s. Reliance Jio Infocomm Limited suggested a different classification (85177010).
The Customs Authority received comments from the concerned Commissionerate, stating that the matter had already been decided by the Hon’ble CESTAT, Mumbai, and the Supreme Court, indicating finality in the classification. The Commissionerate argued that Circular No. 8/2023 did not create uncertainty and that the applicant misinterpreted its scope.
A personal hearing took place on 10th January 2024, where the applicant’s Authorized Representative (AR) presented their case. The departmental representative emphasized that the issue had reached finality and ruling against the application was not warranted.
Conclusion
After careful consideration, the Customs Authority for Advance Rulings, New Delhi, ordered the rejection of the applicant’s request for an advance ruling. The decision was based on the proviso to Sub-section (2) of Section 28-I of the Customs Act, 1962, stating that the issue had already been decided and attained finality. This ruling provides clarity on the classification of DWDM and OTN equipment, closing the chapter on the dispute between M/s. Nokia Solutions and Networks India Private Ltd. and the customs authorities.
This detailed analysis sheds light on the complex classification issue of DWDM and OTN technology, offering insights into the Customs Authority’s decision in the case of Nokia Solutions and Networks India.
FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, DELHI
M/s. Nokia Solutions and Networks India Private Ltd., 1507, Regus Business Centre, Eros Corporate Towers, Level 15, Nehru Place, New Delhi — 110019 (having IEC No. 0507000340) hereinafter referred to as ‘the applicant’) filed an application (CAAR-1) for advance ruling before the Customs Authority for Advance Rulings, New Delhi (CAAR in short). The said application was received in the secretariat of the CAAR, New Delhi on
05.12.2023 along with enclosure in terms of section 28H the Customs Act, 1962 (hereinafter referred to ‘Act’). The applicant is engaged in the business of, manufacturing and trading of telecommunication network equipment both within and outside India, network design, installation and commissioning, providing support services to major telecom and interim service provider, developing software and manufacture of mobile phones,
2. The applicant has filed the application, seeking an advance ruling on the appropriate classification of cards of equipment delivering Dense Wavelength Division Multiplexers (DWDM) and Optical Transport Network (OTN) technology The applicant has stated that they have been classifying the cards under CTH 85176290 of the Customs Tariff Act, 1975 on the basis of their understanding of the functionality of such cards (reception, conversion and transmission of data/signals) rend along with the principles of classification. The applicant has further submitted that, the said classification also finds support from Circular No. 8/2023 dated 13 March 2023 which provides clarity on the exclusion category of items covered under S. No. 20 of the Notification No. 57/2017—Customs (the said S. No. only covers items classifiable under CTH 85176290 or 85176990 of Customs Tariff Act, 1975); the said circular clarifies that cards of DWDM and OTN equipment are covered under S. No. 20 of Notification No. 57/2017- Customs dated 30.06.2017.. thereby, indicating their classification under Sub-heading, 85176290 of the Customs Tariff Act, 1975; however, the Hon’ble Mumbai Tribunal has recently held in the case of M/s. Reliance Jio Infocomm Limited that the correct classification of the cards of DWDM and OTN equipment covered therein is 85177010; considering this anomaly in classification, they have filed the application for advance ruling.
3. The applicant has also stated that the order of the Hon’ble CESTAT, Mumbai was challenged before the Supreme Court however, the same was dismissed. However, in March, 2023, Central Board of Indirect Taxes and Customs issued a Circular No. 08/2023 dated 13.03.2023 inter-alia identifying the products/equipment under exclusion no. (b) and (d) of S. No. 20 of the exemption notification. The applicant has also stated that issuance of the circular after the judgement has created uncertainty on the classification of cards of DWDM or OTN equipment and raised the question as to what would be the correct classification of cards of DWDM and OTN equipment keeping in view the Circular No. 8 issued by CBIC?;
4. In respect of the instant application for advance rulings, comments have been received from the concerned Commissionerate wherein, it is inter-alia stated that it may be noted that the issue of classification of cards of DWDM and OTN equipment is already decided by Hon’ble CESTAT, Mumbai in CC, Mumbai v. Reliance Jio lnfocomm Ltd. vide its Final Order A/85571-85583/2022 dated 22.06.2022 wherein, it has been held that line cards of the nature of populated printed circuit boards are ‘parts’ of DWDM equipment and not complete equipment/apparatus, hence are classifiable under Tariff item 85177010 as parts. Civil Appeal filed before the Hon’ble Supreme Court by Commissioner of Customs (Revenue) [Diary No. 31965/20221 was dismissed by the Hon’ble Supreme Court vide its order dated 30.01.2023. Hence, order passed by the Hon’ble C’ESTAT now appears to have attained finality. Thus, as it stands that such PCBA cards are rightly classifiable under 85177010 These factual details are mentioned in the subject application also by the applicant. Hence, the present application filed by the applicant does not appear to be proper in view of the proviso of Section 28-1(2) of the Customs Act, 1962, as the matter has already attained finality in view of the said judgements of the Hon’ble (‘&5T47; .Mumbai and Hon’ble Supreme Court. On perusal of the aforesaid circular, it is very clear that the said circular has only clarified the products/equipments which could be covered under the description mentioned at serial number 20 (b) and 20 (d) of the exemption Notification No. 57/2017- Customs dated 30.06.2017.Products/ equipment covered at serial number (b) and (d) of the said circular nowhere mentions the cards for DWDM, CWDM AND OTN equipment. Hence the issue of classification of cards of DWDM or OTN equipment by plain reading of the circular, no-where arises. Therefore, it appears that the importer has mis-interpreted the scope of the said circular. Hence, there is no uncertainty on the classification of cards of DWDM or OTN equipment.
5. Personal hearing, in the matter was held on 10.01.2024 vide hybrid mode where Authorized Representative (AR) of the applicant attended the hearing physically and the authorized representative of the concerned Commissionerate attended the hearing through virtual mode. During the personal hearing, the AR of the applicant started by giving brief background of the applicant company and explained functioning of the goods in question, in brief. He stated that they had been importing the goods in question under classification 85176290 and referred to the judgement in the case of M/s Reliance vide which it has been ordered to classify such goods under 85177010. Referring to Boards Circular No. 8/23, he mentioned that in view of the divergence vis-a-vis the said circular and the said judgement, they have sought an advance ruling, in the matter. However, the departmental representative stated that the said circular has only clarified the applicability of exemption vide serial no. 20 of Notification No. 57/2017- Customs dated 30.06.2017.. and since the issue has already attained finality, ruling against the application is not warranted; further, the said circular refers to complete equipment and not parts whereas, PCB has separate classification. Reiterating the written submissions, the AR mentioned that goods in question have individual function and work on insertion in the chassis.
6. I have gone through the records, submissions of the applicant as well as submissions of the concerned Commissionerate. I find that the applicant, M/s Nokia Solutions and Networks India Private Ltd. has filed the instant application, seeking ruling on classification of cards of DWDM or OTN equipment. The applicant in their application has mentioned that the matter of litigation of an appeal filed by the Department before Hon’ble CESTAT, Mumbai challenging the Order-in-Appeals of the Commissioner (Appeals) wherein Hon’ble Tribunal has upheld the order of the Commissioner (Appeals). Thereafter the Department filed a Civil Appeal before Hon’ble Supreme Court of India challenging the order of the Hon’ble Tribunal which was dismissed by Hon’ble Apex Court.
7. I note that the proviso to Sub-section (2) of Section 28-1 of the Customs Act 1962 states that the Authority shall not allow the application where the question raised in the application is –
(a) already pending in the applicant’s case before any officer of customs, the Appellate Tribunal or any Court;
(b) the same as in a matter already decided already by the Appellate Tribunal or any court.
8. I find that classification of the goods in question has already been decided by the Hon’ble Tribunal and the same has attained finality subsequent to the said judgement of the Hon’ble Supreme Court. Thus, in terms of the proviso to Sub-section (2) of Section 28-I of the customs Act, 1962. issue of an advance ruling, in the instant application, is not warranted. Hence, the instant application for advance ruling is liable for rejection.
9. Accordingly, I order for rejection of the instant application for advance ruling registered vide serial number 36/2023-Delhi dated 05.12.2023.
(SAMAR NANDA)
Customs Authority for Advance Rulings, New Delhi
