Main PCB, Lightning Protector, DC/AC Cables, Fuse Holders are neither Parts nor Accessories of IFWT, not eligible for Customs Duty Exemption: CESTAT [Read Order]

PCB - Lightning Protector - Fuse Holders - DC Cables - AC Cables - IFWT - Customs Duty Exemption - CESTAT - Customs - Excise - Service Tax - Taxscan

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Chennai Bench comprising Sulekha Beevi C.S, Member (Judicial) and Vasa Seshagiri Rao, Member (Technical) observed that the main PCB, lightning protector, DC/AC cables, fuse holders are neither parts nor accessories of Integrated Fixed Wireless Telephones ( IFWT ) and hence is not eligible for Customs duty exemption.

The appellant, M/s.ACD Communications Pvt. Ltd. imported and cleared goods declared as “12V SMPS consisting of Main PCB, lightening protector, DC/AC cables, fuse/fuse holders and others” vide Bill of Entry.

At the stage of scrutiny in the Post Clearance Audit (PCA), it was noticed that the goods had been classified under CTH 85299090 as parts of IFWTs operating on cellular technology and claiming the benefit of Customs Notification No.21/2005-Cus. dt. 1.3.2005 and Notification No.6/2006-CE dt. 1.3.2006 at ‘Nil’ rate of duty.

As per Notification No.21/2005, parts, components and accessories of mobile handsets including cellular phones are exempted from Customs duty. The Department was of the view that the imported goods are nothing but parts of the Switch Mode Power System (SMPS) classifiable under CTH 85049090. Show cause notice was issued proposing to reclassify the goods under Section 85049090 and for demanding the differential duty along with interest.

Counsel Raghavan Ramabhadran appeared and argued on behalf of appellant and submitted that the subject goods which are used in the manufacture of SMPS must be considered as parts of cellular telephone. It is pertinent to note here that the benefit of Notification No. 21/2005-Cus., is available to all parts, components and accessories, regardless of the classification. Thus, the test to be adopted is to determine whether the subject goods are parts of IFWT.

The Coram made it clear that “It has to be remembered that the goods imported are ‘Main PCB, Lightening protector, DC/AC cables, Fuse/Fuse holders etc.’ The goods imported are not SMPS. Merely because SMPS may be used for IFWT it cannot be said at any stretch of imagination that the parts that go into the making of SMPS are accessories of IFWT.”

The Bench noted that the goods imported cannot be considered as accessory as these parts are not used to increase the effectiveness or convenience of IFWT. We categorically hold that the goods imported are neither parts nor accessories of IFWT and therefore cannot avail the benefit of notification.

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