Follow Us :

Case Law Details

Case Name : In re Nokia Solutions and Networks India Private Ltd (CAAR Delhi)
Appeal Number : Order No. CAAR/Del/Nokia Solution/02/2024/694
Date of Judgement/Order : 26/02/2024
Related Assessment Year :

In re Nokia Solutions and Networks India Private Ltd (CAAR Delhi)

Introduction: The classification of telecommunications equipment has been a contentious issue for Nokia Solutions and Networks India Pvt. Ltd. (NSN India) in their recent application for advance ruling before the Customs Authority for Advance Rulings, New Delhi (CAAR). Specifically, the focus is on the classification of cards delivering Dense Wavelength Division Multiplexers (DWDM) and Optical Transport Network (OTN) technology. This article delves into the intricacies of this dispute and the subsequent ruling by the customs authority.

Detailed Analysis: NSN India filed an application seeking clarification on the classification of DWDM and OTN equipment, as they had been classifying the cards under a specific sub-heading of the Customs Tariff Act, 1975. They cited Circular No. 8/2023, which supported their classification under a particular sub-heading. However, a ruling by the Hon’ble Mumbai Tribunal contradicted their classification, leading to ambiguity. Despite their appeal to the Supreme Court, the matter was dismissed.

The customs authority, upon review, noted that the classification issue had already been decided by the Hon’ble Tribunal and had attained finality after the Supreme Court’s dismissal of the appeal. As per the Customs Act, issuing an advance ruling in such circumstances was deemed unnecessary, resulting in the rejection of NSN India’s application.

Conclusion: The dispute over the classification of DWDM and OTN equipment highlights the complexities involved in interpreting customs regulations, especially when conflicting rulings arise. Despite NSN India’s efforts to seek clarity through an advance ruling, the matter was deemed resolved by prior judicial decisions. This case underscores the importance of staying abreast of evolving regulations and seeking legal counsel to navigate such disputes effectively.

By understanding the nuances of this case, stakeholders in the telecommunications industry can better navigate classification challenges and ensure compliance with customs regulations.

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 enclosures in terms of Section 28H (1) of the Customs Act, 1962 (hereinafter referred to as the `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 Internet service provider. developing software and manufacture of mobile phones.

Nokia Solutions & Networks Classification Dispute on DWDM & OTN Technology- CAAR Delhi

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) read along with the principles of classification. The applicant has further submitted that, the said classification also finds support from Circular No. 8/2023 dated 13th 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, 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 is clear from the plain reading of the above that there should be a written decision of “advance ruling” on the questions referred by the applicant in respect of any goods prior to its importation. However, the applicant in its application has already submitted that they are already involved in importation of the referred goods i.e. “Cards of DWDM and OTN equipment” and has been self-assessing the goods with classification under CTH85176290 and discharging BCD @20% as per their understanding that “Cards of DWDM and OTN equipment” are machine capable of reception, conversion and transmission of data/signals read along with the principles of classification and as per CBIC’s Circular No. 08/2023-Customs, dated 13.03.2023. Therefore, the applicant is seeking advance ruling for correct classification of cards of DWDM and OTN equipment keeping in view the Circular No. 08/2023 issued by CBIC. It appears that the applicant does not fulfil the provisions of Section 28E(b) of the Customs Act, 1962 to seek advance ruling in respect of the goods which are already being imported by them in commercial quantity before any written decision of the authority. In view of the above, it appears that the application filed by M/s Nokia Solutions and Networks India Pvt. Ltd. merits rejection in terms of Section 28E(b) of the Customs Act, 1962. Moreover, it is further informed that department’s Appeal against the CESTAT’s Order in the case of COMMISSIONER OF CUSTOMS- MUMBAI (AIR CARGO IMPORT) AND COMMISSIONER OF CUSTOMS-MUMBAI (ACC) VERSUS RELIANCE JI0 INFOCOMM LTD wherein the correct classification of the subject item was considered to be 85177010 has been dismissed by the 1-lorale Supreme Court of India vide order dated 30.01.2023 in Civil Appeal No.(s) of 2023 arising out of Diary No. 31965/2022.

5. Personal hearing, in the matter was held on 21.02.2024 wherein authorized representative (AR) of the applicant attended the hearing physically. During the personal hearing, the authorized representative started with acknowledging receipt of comments of the concerned Commissioner and mentioned that their submissions in this application would remain the same as submissions given by them in respect of their previous application dated 05.12.2023. He further stated that they reiterate the submissions without further addition and requested for ruling in the application.

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 Supreme Court.

7. I note that the proviso to Sub-section (2) of Section 28-I 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 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 35/2023-Delhi dated 05.12.2023.

(SAMAR NANDA)
Customs Authority for Advance Rulings, New Delhi

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Post by Date
April 2024
M T W T F S S
1234567
891011121314
15161718192021
22232425262728
2930