WAPs with Only MIMO or Only LTE Eligible for BCD Exemption under Customs Notification Before 2021 Amendment: Delhi HC [Read Order]
Delhi HC ruled that WAPs with only MIMO or only LTE, but not both, qualify for BCD exemption under the Customs Notification before the 2021 amendment
In a recent ruling, the Delhi High Court held that Wireless Access Points (WAPs) with only MIMO or only LTE technology are eligible for exemption from Basic Customs Duty under the relevant Customs Notification before the 2021 amendment, and that the exclusion applies only to products that use both MIMO and LTE together.
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The Principal Commissioner of Customs filed an appeal under Section 130G of the Customs Act, 1962 against GO IP Global Services Pvt. Ltd. The case concerned the interpretation of the words “MIMO and LTE Products” in clause (iv) of Serial No. 13 of Notification No. 11/2014-Customs dated 11 July 2014.
The revenue counsel argued that the phrase should be read broadly to cover three categories: products with only MIMO, products with only LTE, and products with both. They argued that the amendment made in 2021, which separated the exclusion into two parts “MIMO products and LTE products” was merely clarificatory and should apply to earlier cases as well.
On the other hand, the company's counsel argued that the plain meaning of “MIMO and LTE” must be read conjunctively, which would restrict the exclusion only to products using both technologies. Their WAPs used MIMO but not LTE, so they were eligible for the exemption.
The Division Bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta observed that the wording of the notification must be read as it stands. The court explained that the use of the word “and” shows that both technologies must exist together in a product for the exclusion to apply.
It pointed out that if the Government intended to include products with either one of the technologies, it could have used the word “or” or drafted the clause differently. The court further observed that the 2021 amendment clarified the position but it would apply only from the date it came into effect and could not govern earlier disputes.
The court held that WAPs imported by the company, which used MIMO but not LTE, were entitled to exemption from Basic Customs Duty. The issue had already been settled in an earlier judgment in the case of Ingram Micro India Pvt. Ltd., so the court found that no substantial question of law arose.
The appeal filed by the Revenue was dismissed, and the exemption in favour of the company was upheld.
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