‘Interface Cards’ used in Cloud Engine Switches are Classifiable under ‘Optical Transport Network’: CESTAT [Read Order]

The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the interface cards used in the cloud engine switch providing the function of data packet processing and traffic management are classifiable under the category of ‘Optical Transport Network’. 

Huawei Telecommunication (India) Company Private Limited, the appellant assessee classifies the imported goods of interface card as Populated Printed Circuit Board Assembly (PPCBA) under customs tariff. 

The assessee appealed against the order passed by the Commissioner of Customs (Appeals) for demanding differential duty under Section 28 of the Customs Act, 1962, and proposing for confiscation of imported goods and imposition of penalties under Sections 112(a), 117 of the Customs Act. 

Kartik Sundaram, the counsel for the assessee contended that the interface cards which were a kind of Populated Circuit Board Assembly (PCBA) and form a part of Packet Optical Transport Switch (POTS) and are used in cloud engine switches providing the function of data packet processing and traffic management on optical ports. 

Also submitted is that the imported goods are distinguishable with ‘network interface cards’ since the ‘interface cards’ work as an intermediate component in the network. 

D.S. Maan, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee classified the imported goods in the wrong category and the imported goods were classifiable under the category of machine or apparatus. 

The Bench observed that in the case of Commissioner of Customs, Mumbai Vs. Reliance Jio Infocomm Ltd, the court held that the imported goods could not be classified as a machine or apparatus and had to be classified as parts of a Packet Optical Transport Switch (POTS). 

The two-member bench comprising Mohanty (Judicial) and Parthiban (Technical) held that the classification done by the assessee was proper and allowed the classification of imported goods and optical transport networks. 

To Read the full text of the Order CLICK HERE

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