The Commissioner of Customs (Appeals) vs. Larsen & Toubro Ltd. - (Customs, Excise and Service Tax Appellate Tribunal) (30 Nov 2023)

Any classification should be based on the description and function of an item as it is imported and not on its end-use

MANU/CB/0112/2023

Customs

The Respondent Larsen and Toubro Ltd. imported G-24 PL 001 GSM Chipset Wavecom (modem) vide Bill of Entry No.2120004 dated 02.09.2009, classifying them under chapter Heading 8517 6230. The supplier invoices described the imported goods as "electronic components for metering production system", C/1714/2010 and on examination, officers found that the goods imported were a chipset mounted on printed circuit board and as per the Technical Write-up, the circuit boards were wireless CPU-a powerful programmable processor. Based on the above description and with reference to HSN Explanatory Notes, the items were classified under Chapter Heading 8537 1000 by the Original Authority as against the classification claimed by the Respondent under Chapter Heading 8517 6230.

On an appeal before the Commissioner (A), the Commissioner (Appeals) based on the catalogue produced before him found that the wireless CPU wavecom includes ARM microprocessors that can process data, listen to more than 50 peripheral devices, address complex display driver interfaces, etc; thus describes the modem to be a powerful programmable processor which can also connect to cellular networks anywhere in the world. Thus, classified the same under Chapter Heading 8517 as claimed by the respondent. The Department is in appeal against the above impugned order.

There is no dispute that the items imported are a programmable processor mounted on a printed circuit board. It is a settled fact that, the principles of classification endorses that any classification should be based on the description and function of an item as it is imported and not based on its end-use as held by the Supreme Court in number of cases.

The HSN Explanatory Notes to Chapter Heading 8537 states that this heading covers 'programmable controllers which are digital apparatus using a programmable memory for the storage of instructions for implementing specific function such as logic sequencing, timing, counting and arithmetic to control through C/1714/2010 digital or analogue input/output modules, various types of machines'. It is also a fact that the appellant are manufacturers of electric metre and their products are classifiable under chapter heading 90283010 and it is also an admitted fact that these impugned goods are used in automatic metering system. Therefore, Commissioner (Appeals) justification for classification under Chapter Heading 8517 as part of modem is inappropriate. Since programmable controllers are specifically covered under Chapter Heading 8537, they are rightly classifiable under this Heading and not under Chapter Heading 8517 as part of modem.

Imported item viz., G-24 PL 001 GSM Chipset Wavecom (modem) are rightly classifiable under Chapter Heading 8537. Consequently, the impugned order is set aside. The appeal filed by the Revenue is allowed.

Tags : EXPLANATORY NOTES PRODUCT CLASSIFICATION