Relief to Redington: CESTAT Upholds Quashing of Customs Duty Demand on Import of WAP which Works on Technology and does not support LTE standard on ground of Exemption Eligibility [Read Order]

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) granted relief to Redington (India) Limited by quashing the Customs Duty Demand on the import of Wireless Application Protocol (WAP) which works on technology and does not support Long Term Evolution (LTE) standards on the ground of exemption eligibility. 

Redington (India) Limited, the respondent-assessee was a distributor of Information Technology products and imported WAP from various suppliers such as Cisco Systems International US, Ubiquiti Networks International, Hong Kong, and Fortinet Singapore Private Limited, Singapore for trading purposes in India and WAP works on Multiple Input/Multiple Output (MIMO) technology, but does not support Long Term Evolution standard. 

The revenue appealed against the order passed by the Commissioner of Customs (Air) for dropping the basic Customs Duty Demand against the assessee. 

P.R.V. Ramanan, the counsel for the revenue contended that WAP being MIMO products, by virtue of the use of MIMO technology in them, would fall within the exclusion clause and WAP was essentially an Information Technology device and as the exclusion clause was meant to cover only telecom equipment and devices, WAP cannot be excluded from the exempted category was misconceived. 

Alok Agarwal, Prachit Mahajan, and Shubham Tyagi, the counsels for the assessee contended that the product that only had MIMO technology would not be covered by the exclusion clause and thus cannot be excluded and read as ‘MIMO or LTE products’, or ‘MIMO products and LTE products’. 

The Bench observed that in the case of Ingram Micro India, the court held that the classification of identical product (i.e. WAP) are eligible for the benefit and extended the benefit of the subsequent notification and once the benefit has been granted to Ingram Micro in the subsequent notification for an identical product, the benefit under the notification should also be extended to the assessee. 

The two-member bench comprising Dilip Gupta (Judicial) and Rajeev Tandon (Technical) held that the WAP imported by the assessee works on technology and does not support LTE standard and justified in claiming exemption from the whole of the customs duty under Serial No.13 (iv) of the notification. 

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