AUTHORITY FOR ADVANCE RULINGS
(CENTRAL EXCISE, CUSTOMS & SERVICE TAX), NEW DELHI
Hon'ble Mr.Justice Syed Shah Mohammed Quadri (Chairman)
Mr.Somnath Pal (Member)
Thursday, the twenty fourth November Two Thousand Five
R U L I N G
(Hon'ble Mr. Justice Syed Shah Mohammed Quadri)
In this application under section 28H of the Customs Act, 1962 (for short "the Act"), M/s. Alcatel India Limited, a wholly owned subsidiary of Alcatel, France, proposes to import into India the latest technology equipment of Optical Networking/GSM equipment etc. To ascertain its customs duty liability in regard to the hardware and optical fibre cables for submarine telecommunications systems, it seeks advance ruling of the Authority on the following question:
"Whether the Alcatel Single Wavelength Transponder to be imported into India, is classifiable under Heading No. 8517 5099 of the First Schedule of the Customs Tariff Act, 1975."
The Alcatel Single Wavelength Transponder for Submarine Unrepeatered Systems (for short "the goods") is a hybrid of optical, electronic and mechanical system that forms part of a submarine telecommunication system for use in transmission of aggregate data. The goods is of generic design and includes features that allow the configuration of the FFU to suit a given system. The goods are intended for use in long haul unrepeatered submarine cable systems linking networks carrying telecommunications data. For transmission over the submerged cable section, the transponder includes a Forward-Error Correction (FEC) code. This has the benefit that transmission errors, which arise in the submerged system, can be detected and corrected at the receiving terminal. The principal functions of the goods are to manage and achieve efficient data transmission integrity through the submarine telecommunications optical fibre cable, to transmit one optical signal through the submarine cable (optical fibre), to receive this signal, decode it through a Forward Error Correcting algorithm and pass it to other land based telecommunication systems. It is submitted that in accordance with Rule 1 of the General Rules for the Interpretation of the First Schedule to the Customs Tariff Act 1975 (for short "the Rules") the said goods are classifiable under Tariff heading 8517; in accordance with Rule 6, these goods will fall under sub-heading 8517 50 and that the appropriate tariff heading is 8517 50 99. It is added that the U.K., the USA and Australia have classified the said goods under tariff heading 8517 50.
2. In his comments the designated Commissioner of Customs states as follows:
"Comments: On the basis of description of goods and functions given in annexure II and Technical documents, it appears that the party's contention that in accordance with Rule 1 of the General Rule of interpretation, these goods are classified under tariff heading 8517 Electrical apparatus for line telephony or line telegraphy, including line telephone sets with cordless handsets and telecommunication apparatus for carrier - current line systems or for digital line systems; videophones is correct. The equipment has application in managing and achieving efficient data transaction interpreting through Telecommunication cables, it merits classification under Tariff heading 85175099 of the First Schedule.
Conclusion: In view of above, proposed classification of item under tariff heading 8517 5099 may be accepted."
3. It is evident that the proposed classification by the applicant is accepted by the Commissioner of Customs.
4. Tariff heading 8517 , the relevant sub-heading and the tariff items read as follows:
TARIFF HEADING 8517
Heading 8517 deals with electrical apparatus for line telephony or line telegraphy including line telephone sets with cordless hands-sets and telecommunication apparatus for carrier-current line systems or for digital line systems.
SUB-HEADING AND TARIFF ITEMS
On a combined reading of Rules 1 and 6 of the Rules and the terms of the heading, sub-heading and tariff items, having regard to the description of the goods, given above, we rule that Alcatel Single Wavelength Transponder is classifiable under tariff item 8517 50 99.
Pronounced in the open Court on this 24th day of November, 2005.
Sd/- Sd/- Sd/-
(Somnath Pal) (Justice S.S.M.Quadri) (B.A.Agrawal)
Member Chairman Member