2008(10)LCX0127

IN THE CESTAT, SOUTH ZONAL BENCH, CHENNAI

S/Shri P.G. Chacko, Member (J) and P. Karthikeyan, Member (T)

Srinivas Celicom Ltd.

Versus

Commissioner of Customs, Chennai

Final Order No. 1205/2008, dated 22-10-2008 in Appeal No. C/336/2001

Cases Quoted -

Commissioner v. ITI Ltd. - 2002(03)LCX0228 Eq 2002 (145) ELT 0697 (Tribunal) - Referred [Paras 2,5,6]

Commissioner v. Scientific Instruments Co. Ltd. - 2007(07)LCX0081 Eq 2007 (218) ELT 0061 (Tribunal)
-Relied on Paras 6,7]

Delton Cables Ltd. -1996(08)LCX0101 Eq 1996 (087) ELT 0781 (Commr.Appl.) - Distinguished [Paras 2,5]

Scientific Instruments Co. Ltd. v. Commissioner -1997(07)LCX0169 Eq 1997 (095) ELT 0564 (Tribunal)-Relied on[Paras 1,3,4,5,6,7.1]

Commissioner v. Scientific Instruments Co. Ltd. -1998(11)LCX0254 Eq 1999 (106) ELT A067 (S.C.) - Referred [Para 4]

Advocated By -

Shri S. Murugappan, Advocate, for the Appellant.
Shri V.V. Hariharan, JCDR,for the Respondent.

[Order per : P. Karthikeyan, Member (T)]. -

M/s. Srinivas Cellcom Ltd. (SCL), imported "waveguides" and cleared under five bills of entry filed between 10/99 to 3/2000. The goods were allowed exemption extended to entry at Sl. No. 215 of Notification No. 20/99-Cus., dt. 28-2-99 accepting the classification CTH 852990 declared by the importers. After due process, the original authority revised the classification to CTH 854420 and demanded the exemption allowed to the imported waveguides under Notification No. 20/99-Cus., dated 28-2-99 at the time of clearance. He followed the decision of the Tribunal in the case of Scientific Instruments Co. Ltd. v. Commissioner reported in 1997(07)LCX0169 Eq 1997 (095) ELT 0564 (Tri.) (henceforth referred also as 97 decision). A demand of Rs. 21,56,550/- was accordingly confirmed against SCL. In the impugned order, the Commissioner (Appeals) sustained the order of the original authority, observing that principles of judicial discipline mandated that the authorities subordinate to the Tribunal followed the ratio of the decisions of the Tribunal.


2. Appellants argued that the Commissioner (Appeals) had relied on an order of the Tribunal which had no precedential value. In that case, the Tribunal had wrongly resorted to Rule (4) of the Interpretative Rules without following the earlier rules. SCL relied on the Tribunal's decision in the CC, Customs v. ITI Ltd. [2002(03)LCX0228 Eq 2002 (145) ELT 0697 (Tri-Chennai)] which had affirmed an order of the Commissioner (Appeals) classifying waveguides under CSH 852990. The Commissioner (Appeals), in that case, had relied on the advice received from the Department of Telecommunications in deciding the classification. The Tribunal had upheld the order of the Commissioner (Appeals) based on technical opinion received from the Directorate of Telecommunications and had not found anything amiss with the opinion. The Tribunal found that the waveguides constituted a micro-wave sub-system, a passive micro-wave component and upheld the classification under CSH 852990. The Apex Court had upheld this classification. SCL also placed reliance on in Delton Cables Ltd [1996(08)LCX0101 Eq 1996 (087) ELT 0781 (Commr.Appl)] wherein the Commissioner (Appeals) had found that the waveguides imported were being used as such and no process was undertaken on them. The item waveguides in 400 metres presented for assessment was a microwave passive component and therefore correctly classifiable under CSH 852990 as part of the microwave system of CSH 8529. He had also followed the opinion of the Department of Telecom.


3. In Scientific Instruments case (97 decision), the CEGAT had found that the waveguides conveyed electromagnetic signals through a hollow perforated copper cable with elliptical cross-section. The signals were conveyed through the cable by their internal reflection. The cables were usually filled with a dielectric like air. They discharged the function of coaxial cables. As coaxial cables were most akin to waveguides, in the absence of a more apt entry, Tribunal classified the waveguides in the entry for coaxial cables. Accordingly, waveguides were classified under CSH 854420. It was held that the waveguides impugned in the appeal before them were not part of any radiotelephony equipment. These conveyed signals from transmitting stations to antennae. They were part of the microwave system and not part of any transmitting apparatus. These were hence not part of any goods covered by CH 8529. The Tribunal therefore rejected the assessee's claim for classification of the waveguides under CSH 852990 and classified them as cables of CSH 854420,


4. The Ld. SDR relies on the decision of the Tribunal in the Scientific Instruments Ltd. case (97 decision) upheld by the Apex Court vide 1998(11)LCX0254 Eq 1999 (106) ELT A067 (S.C.). The Ld. SDR opposes the appeal and defends the impugned order of the Commissioner (Appeals).


5 We have considered the facts of the case and the rival submissions. SCL has argued that the Commissioner (Appeals) in Delton Cables Ltd. [1996(08)LCX0101 Eq 1996 (087) ELT 0781 (Commr. Appl)] had followed the technical opinion of Department of Telecommunications and the Tribunal had approved similar decision of the Commissioner (Appeals) in ITI case passed following the technical opinion of Department of Telecommunications. We have not had the benefit of any such opinion of the Telecom Department or any other competent agency. We are not informed of the nature of advice rendered by the Directorate of Telecom in either case, nor is it reproduced in the respective decisions. It is submitted that in Scientific Instruments case (97 decision), Tribunal had followed Rule 4 of Interpretative


Rules before examining classification under the earlier Interpretative Rules. SCL has not explained satisfactorily, how, applying the earlier rules, the impugned goods could be classified under CSH 852990.


6. The compendium of classification opinions of World Customs Organization (1990 Edition) contains an advice to the effect that such cables of Aluminium fell under CSH 852990. In the decision reported as CC v. Scientific Instruments Co. Ltd. [2007(07)LCX0081 Eq 2007 (218) ELT 0061 (Tri-Chennai)], the Tribunal upheld the classification of waveguides as cables of CSH 854420 following the Apex Court's decision. The issue to be decided is whether waveguides are part of radioteleph-ony equipment or, cables conveying electromagnetic signals. These cables convey electromagnetic waves. They are part of the microwave system. In the TTI case, such cables were held as a sub-system and part of radio microwave equipment. In Scientific Instruments Ltd. case (97 decision), the same were held to be cables, they being not part of any equipment of CH 8529 that came to the market. These were not part of machinery of CH 8529. There is no dispute that the goods formed a sub-system of radio microwave system. The compendium of classification opinions of HSN (1990 Edition) relied on by SCL contains an advice to the effect that similar cables of Aluminium fell under CSH 852990. However, this opinion is not binding on the Indian authorities deciding the classification. We find that appeals against both decisions of the Tribunal were dismissed summarily by the Apex Court without assigning reasons. Therefore, there is no binding decision of the Apex Court on the issue which can be followed.


7. In the 2007(07)LCX0081 Eq 2007 (218) ELT 0061 (Tri.-Chen.) decision, the Tribunal held that waveguides connecting distant towns for telephonic communication were cables of 854420 and they were not part of any radiotelephony apparatus. In that case waveguides had been imported to meet the requirement of Telecom Department to establish telecommunication between towns in several routes. Cables connected towns at either end of the phone conversation by conveying signals to antennae.

7.1 These cables were not part of the transmitting radiotelephony apparatus or the equipment receiving the signals. Therefore the Tribunal rejected the prayer for classification of these goods as parts of equipment of CH 8529 under CSH 852990 in the Scientific Equipments Ltd. [1997(07)LCX0169 Eq 1997 (095) ELT 0564 (Tri.)] case.


8. We do not find any justification to take a view different from that held in the above decisions. The appeal is dismissed.

(Order pronounced in Open Court on 22-10-2008)

Equivalent 2009 (235) ELT 0161 (Tri. - Chennai)

Equivalent 2009 (091) RLT 0174 (CESTAT-Che.)