News Flash
  • OM dated 12.12.2018 regarding AISL of Administrative Officers (Cx & Dte.) for the period upto 2008 Click here
  • Promotion/Posting/Transfer order of Group 'A' officers of CRCL Click here
  • Removal of difficulty order regarding extension of due date for filing of Annual return (in FORMs GSTR-9, GSTR-9A and GSTR-9C) for FY 2017-18 till 31st March, 2019 issued. -Click here -Click here
  • Draft integrated All India Seniority List of Superintendents of Customs (Prev.) for the period from 01.01.2012 to 31.12.2013 Click here
  • Chairman CBIC's weekly newsletter dated 07.12.2018 Click here
  • Due date for filing of Annual return for FY 2017-18 in FORMs GSTR-9, GSTR-9A and GSTR-9C extended to 31st March, 2019. Click here
  • Marks obtained in the Departmental Examination for promotion of LDC/Havaldar to the cadre of Tax Assistant for the year 2018-19, held on 20.07.2018 Click here
  • Revised All Industry Rates(AIRs) of Duty Drawback notified. For details refer to notification no. 95/2018-Cus. (N.T.) dated 6.12.2018. Click here
  • Diversion of the posts of Pr CC of CBIC on their promotion Click here
  • Letter from the office of DGHRD to all the CCAs regarding "Revised Online DPC Module" for Group 'B' and 'C Click here
  • Scheme for Prime Minister's Awards for Excellence in Public Administration - reg.Click here
  • Kind attention Pr. CC/CC/Pr. DG/DG/JS/Commissioner of CBIC is invited to DG Systems letter F. No. IV (20)/21 /2018-Systems dated 04.12.2018 regarding Business Requirement Gathering for Project ADVAITClick here
  • For GSTP Examination on 17.12.2018, candidates enrolled up-to 4.12.2018 (11.59.59 PM) will be eligible to register, instead of 26.11.2018, notified earlier English | Hindi
  • Updated version of GST Concept and Status and PPT on GST - An Update as on 01/12/2018 have been uploaded
  • Final Integrated All India Seniority List of Administrative Officers of (CGST & Dte.) for the period 01.07.2014 to 31.12.2016Click here
  • 21 countries along with WCO, Interpol, UNODC and RILO AP invited to the 5th Regional Customs Enforcement Meeting organized by DRI on 04.12.2018
  • DRI completing 61 Glorious Years. Hon'ble FM to inaugurate the 61st Founding Day function on 04.12.2018
  • GSTPs in the relevant category enrolled on GSTN after 15.11.2018 and till 26.11.2018 are also invited to register on the portal.Click here for English | Hindi
  • Updated FAQs On TCS as on 30/11/2018 issued
  • Notifications issued for extension of due date for filing certain GST returns.
  • Guidelines for Dept. Exam. of Inspectors for confirmation starting from 04.12.2018, issued on 29.11.2018. (Download by using user-id & password at www.nacenkanpur.gov.in)
  • Proposals are invited from eligible Bidders to be appointed as Program Governance and Monitoring Agency (PG&MA) for CBIC’s IT Initiatives. The RFP document can be purchased from the office of DG Systems and Data Management by Respondents who successfully qualified CBIC's EOI dated 26.03.2018 for this project. Click here
  • Postponement of Train the Trainer Workshop for Master Trainers on Combating illegal trade in HCFCs to be conducted from 03rd to 05th December, 2018 at Gangtok, Sikkim Click here
  • Details of Prospective Trainings by NACIN and its ZTIs & RTIs in December, 2018 Click here
  • One-day training programme on "Chemical Weapons Convention" for Group 'A' Officers of CBIC scheduled to be held on 30th November, 2018 at NACIN, Faridabad- Click here
  • Departmental Examination for promotion of Ministerial Officers to be held from 13.02.2019 to 15.02.2019. - Click here
  • Guidelines for GST Practitioner Exam under Rule 83A(9) issued by NACIN, Faridabad - Click here
  • GSTP Examination rescheduled to 17th December 2018 in view of assembly elections on 7th December, 2018 - Click here - Click here
  • Scheme for grant of Cash Awards to meritorious children of Departmental officers/ staff for their performance in the 10th/12th standard Board Examinations held in March/April, 2016, 2017 and 2018-Click here
  • Weekly newsletter from Chairman, CBIC dated 16/11/2018Click here
  • RESULT OF EXAMINATION OF GST PRACTITIONERS HELD ON 31.10.2018 - Click here
  • Call for nominations for workshop for South Asian Sub-regional Economic Co-operation (SASEC) Customs Administration on Trade Facilitation Measures for Time Release Study from 26-27 November, 2018 - Click here
  • Corrigendum of RFP Dated 10.10.2018 for orgainizing International Attachment on Public Policy and Leadership for the 69th Batch of IRS (C&CE) Officer Trainees - Click here
  • Corrigendum to Notification 60/2018-Central Taxes dated 30.10.2018 issued
  • Calling of nomination for the Train the Trainer Workshop for Master Trainers on combating illegal trade in HCFCs being conducted by NACIN from 03-05 Dec, 2018 at Gangtok, Sikkim - Click here
  • Feedback and Action Room to facilitate GST Helpdesk set-up by CBIC for MSMEs - Click here
  • Departmental Examination for IRS (C&CE) Group "A" Officer Trainees to be held from 26th November to 01st December, 2018 in respect of 69th and 68th batch - Click here
  • Updated versions of 3 publications on MSME namely MSME flier, Detailed Booklet and Sectoral Publication are available on the CBIC website-GST> My GST >MSME - Click here
  • Nodal Officers for MSME outreach program Click here
  • Letter from Commissioner (GST) regarding MSMEs outreach program - Click here
  • Swachhta Uday Booklet is available now.Click here
View all

AUTHORITY FOR ADVANCE RULINGS
(CENTRAL EXCISE, CUSTOMS & SERVICE TAX)
NEW DELHI

PRESENT

Justice Syed Mohammed
Quadri
(Chairman)
Mr. Somnath Pal
(Member)
Dr. B.A.Agrawal
(Member

Ruling No. AAR/14(Cus)/2005
In
 Application No.AAR/44(Cus)/14/2005

Applicant 

M/s Alcatel India Ltd. 

Plot No. 25, Sector 18

Gurgaon-122015

Haryana, India

Commissioner designated

Commissioner of Customs,

Air Cargo Complex

New Custom House

New Delhi-110037

Present :  for the applicant None
for the Commissioner  designated

Shri A.K. Roy, Joint CDR

CESTAT, New Delhi

R U L I N G

( By Mr. Somnath Pal, Member )

            M/s Alcatel India Ltd., Plot No. 25, Sector-18, Gurgaon, Haryana, India (hereinafter to be referred to as "the applicant") has filed this application under section 28H of the Customs Act, 1962 (for short "the Act") as a wholly owned subsidiary Indian company of M/s Alcatel, France.  The question raised in this application for advance ruling is :

 "whether Submerged Repeater Generic R4 proposed to be imported into India, is classifiable under heading No. 8517 50 99 of the First Schedule of the Customs Tariff Act, 1975".

2.         In Annexure-II to the application the applicant, after briefly describing the goods in question and referring to the General Interpretative Rule 1 of the First Schedule to the Customs Tariff Act,  has expressed the view that the product under consideration is clearly a telecommunication apparatus. According to the applicant, the goods are classifiable under sub-heading 8517 50 which reads "other apparatus, for carrier-current line systems or for digital line systems".  They have suggested that the proper classification would be under tariff item 8517 50 99.  Copies of the rulings issued by UK Customs, USA Customs and Australian Customs have also been enclosed alongwith the application, all of whom have classified this product under tariff sub-heading 8517 50. 

            The designated Commissioner, namely, the Commissioner of Customs, Air Cargo Exports, New Custom House, IGI Airport, New Delhi (hereinafter to be referred to as "the Commissioner") in his comments has, however, expressed the view that the classification of this item would be under tariff item 8543 89 79 on the ground that the repeater is an amplifier having an independent function and is not covered more specifically by a heading of any other Chapter of the Nomenclature, nor is it excluded by the operation of a legal note of Section XVI or to the Chapter 85.  The tariff item  8543 89 79 would therefore be the appropriate classification of the repeater under consideration as a high or intermediate frequency amplifier mentioned at Sl. No. 9 of the items included in the heading.  He has referred to the Explanatory Notes, Volume 4, Section XVI-XXI, Chapter 85-97 (page no. 1519) in this context.  Reliance has also been placed by the Commissioner on Rule 3 (c) of the General Rules for the Interpretation of First Schedule according to which also the tariff heading 8543 would be more appropriate since this heading occurs later in numerical order than 8517 in the Schedule.

3.         Despite repeated opportunities given to the applicant by postponing the hearing in the month of August, September and October, 2005 as requested by them, nobody appeared before the Authority on behalf of the applicant for the hearing on the rescheduled dates.  The Joint CDR, however, appeared on behalf of the Commissioner and reiterated the view expressed by the Commissioner.

4.         We have carefully considered the question raised by the applicant in this application.  As per "Customs Technical Document" submitted by the applicant for the goods in question, namely, "Alcatel Submerged R4 Repeater", this "is a hybrid of optical, electronic and mechanical systems that forms part of a submarine telecommunication system for use in transmission of aggregate data".  While describing this product, it has been stated that "the repeater provides amplification of digital transmission signals in the c-band amplification window around 1550 nm.  The repeater can be equipped for use with cables having from one to eight fibre pairs.  The mechanical arrangement is compatible with all types of Alcatel submarine cables used in repeatered systems.  The different cable types are terminated in the cable extremity boxes of the repeaters.

            The repeater's powering circuitry is compatible with reversible power feed current.

            Each fibre is a data transmission path and is associated with a single erbium-doped fibre amplifier.   Each fibre pair has two amplifiers, one for each direction of transmission.  These two amplifiers (called an amplifier pair) are mounted on one amplifier module and are connected to 980 nm pump units, control circuit, supervisory circuit and a power supply circuit. 

            Reliable operation is ensured by equipping pump units in pairs, with their output energy combined and then divided via a coupler to pump the amplifiers in both directions.  The control circuits operate to regulate the amplifier outputs, so that any decline in the output of one pump unit can be compensated by an increase of output from the other."

5.         While giving their response to the comments of the Commissioner, the applicant has reiterated the technical information already supplied as annexure to the application and has contended that the function of repeater is to amplify the signal for transmission in a local/wide area network.  It is not an independent unit but is part of the transmission chain.  It has been further submitted by them that the classification of repeaters was discussed at the World Customs Organization and it was agreed that repeaters for local area networks would properly fall under heading 8471 while repeaters for wide area networks are classifiable under  the heading 8517.  Furthermore, the Schedule submitted by India to the World Trade Organization in respect of ITA (Information Technology Agreement) clearly indicates that these products are classified under heading 8517.  The applicant has also submitted that the rulings already issued in other countries are based on the common understanding/principles of the World Customs Organization of which India is a member.  Though they appreciate that there are differences in the interpretation of rules but they hope that the rulings issued by this Authority are in line with the general interpretation world-wide.   According to the applicant, these products are all covered by the ITA and hence these goods should be classified under headings which do not incur any customs duties.  They have therefore requested this Authority to give consideration to the rulings already issued for these products by other countries.

6.         From the technical literature supplied by the applicant alongwith this application, there is no doubt that the product under consideration is clearly a part of a submarine telecommunication system for use in transmission of aggregated data.  It is also clear that this product provides amplification of digital transmission signals.  The moot point for consideration is therefore, whether the repeater in question would be more specifically covered by the heading 8543 89 79 as an "amplifier", as contended by the Commissioner, than the heading 8517 50 99 falling under the category "other apparatus, for carrier-current line systems or for digital line systems", as suggested by the applicant.  Apparently, the Commissioner has gone by the General Interpretative Rule 3(a) as per which the heading which provides the most specific description shall be preferred to headings providing a more general description.

7.         In order to examine the contention of the Commissioner, it is necessary to refer to the tariff heading 8543.  This heading reads as under :-

"Electrical machines and apparatus having individual functions, not specified or included elsewhere in this Chapter"

            Under this heading there is a specific category "amplifier" which has the following tariff items under it :-

Tariff Item

 

Description of goods

Unit    Rate of duty

         Standard   Preferential 

                        Areas

(1)

 

(2)

(3)          (4)          (5)   

8543 89 71

 

8543 89 72

 

 

8543 89 79

---

 

----

 

----

Amplifier :

 

Broadcast amplifier

 

Limiting amplifier, video distribution amplifier and stabilising amplifiers

 

Other

 

 

u           15%              -

 

u           15%              -

 

u           15%              -

 

 

            For any goods to fall under tariff heading 8543, it has to fulfil three  requirements, namely, (a) it has to be an electrical machine or apparatus (b) it must have individual function and (c) it must not be specified or included elsewhere in Chapter 85.

            The HSN Explanatory Notes to heading 8543 provide inter alia that :-

            "The electrical appliances and apparatus of this heading must have individual functions.  The introductory provisions of Explanatory Note to heading 84.79 concerning machines and mechanical appliances having individual functions apply, mutatis mutandis, to the appliances and apparatus of this heading.

            Most of the appliances of this heading consist of an assembly of electrical goods or parts (valves, transformers, capacitors, chokes, resistors, etc.) operating wholly electrically.  However, the heading also includes electrical goods incorporating mechanical features provided that such features are subsidiary to the electrical function of the machine or appliance".

            The introductory provisions of Explanatory Note to heading 84.79 explains what has to be regarded as having "individual functions".  The following two categories have been indicated therein :-

"(A)      Mechanical devices, with or without motors or other driving force, whose function can be performed distinctly from and independently of any other machine or appliance.

                        ---        ---        ---        ---        ---        ---        ---

                        ---        ---        ---        ---        ---        ---        ---

(B)       Mechanical devices which cannot perform their function unless they are mounted on another machine or appliance, or are incorporated in a more complex entity, provided that this function :

(i)        is distinct from that which is performed by the machine or appliance whereon they are to be mounted, or by the entity wherein they are to be incorporated, and

(ii)        does not play an integral and inseparable part in the operation of such machine, appliance or entity.

                        ---        ---        ---        ---        ---        ---        ---

                        ---        ---        ---        ---        ---        ---        ---"

8.         As per the technical information provided by the applicant the product in question is a hybrid of optical, electronic and mechanical systems. The mechanical characteristics, the electrical characteristics and the electro-optic characteristics have been separately narrated in the technical write up submitted by the applicant.  It has been indicated under the heading "Amplifier electro-optic characteristics" that the transmission of aggregate data within the Alcatel Repeater is a telecommunication function supported by the following parts :-

(i)               Optical amplifiers

(ii)              Amplifier automatic level control

(iii)             Pump control

(iv)              Monitor photodiodes

(v)              Wavelength division couplers

(vi)             Monitor coupler

(vii)            Optical isolator

(viii)           Gain flattening filter.

            Under the "Electrical characteristics", it has been indicated that Alcatel repeaters are powered using constant current of either polarity from a terminal station.  Surge protection is provided against large transients that may arise from fault conditions.  It therefore appears that the function of amplification is performed optically using erbium doped fibre and optical pumps for the amplification of the line signal.  It is also seen from the technical information supplied by the applicant that the product under consideration contains, apart from the optical amplifiers and items listed at Sl. Nos. (ii) to (viii) above, other equipments like repeater supervisory system and fault location facilities.  Thus the configuration of the product tends to indicate that it is a combination of optical, electrical/electronic and mechanical elements and the function of amplification plays an integral and inseparable part in the overall operation of the product.  Keeping in view the HSN Explanatory Notes quoted above, it becomes difficult to accept the contention of the Commissioner about the coverage of the goods in question under tariff heading 8543.  On the contrary, having regard to the description of the product, its component parts and their functions as narrated in the technical write up submitted by the applicant, it appears to us that all these put together contribute to the function of transmission of data as a telecommunication apparatus for carrier current line systems or for digital line systems falling under heading 8517 rather than as an "amplifier" falling under heading 8543 as suggested by the Commissioner.   The coverage of the category "Apparatus for carrier-current line systems or for digital line systems" has been indicated in the HSN Explanatory Note to heading 85.17 which reads as follows :-

            "These systems are based on the modulation of an electrical carrier-current or of a light beam by analogue or digital signals.  Use is made of the carrier-current modulation technique and pulse code modulation (PCM) or some other digital system.  These systems are used for the transmission of all kinds of information (words, data, images, etc.)

            These systems include all categories of multiplexers and related line equipment for metal or optical-fibre cables.  "Line equipment" includes transmitters and receivers or electro-optical converters.  Combined modulators-demodulators (modems) are also classified here."

            This supports the view that the heading 8517 would be the more appropriate classification for the goods in question than 8543.  As the possibility of coverage of the product under heading 8543 stands eliminated, the question of applying Rule 3(c) of the General Rules of Interpretation, as suggested by the Commissioner, does not arise.   Coming to the heading 8517, since the goods in question are not covered by any of the sub-headings/tariff item from 8517 11 up to and including 8517 30 00, it will fall under sub-heading 851750 and more precisely under the tariff item 8517 50 99, after excluding rest of the specified items 8517 50 10 to 8517 50 94.

9.         Incidentally, from an authenticated copy of the Information Technology Agreement and India's schedule as amended, made available to us, it is noticed that goods bearing description "Electric amplifiers when used as repeaters in line telephony products falling within this agreement and parts thereof" are shown in the said schedule as classifiable under HS sub-headings "8517 50, 8517 90".

10.       For the abovementioned reasons, we rule on the question raised in this application that Alcatel Submerged Repeater, Generic R4 is classifiable under tariff item 8517 50 99 of the First Schedule of the Customs Tariff Act, 1975.

            Pronounced in the open Court of the Authority on this 24th day of November, 2005.

 

 Sd/-
(B.A.Agrawal)
Member
 Sd/-
(Justice S.S.M.Quadri)
Chairman
 Sd/-
(Somnath Pal)
Member