Commissioner of Customs, ACU, New Delhi vs Fibcom India Ltd.>2002(12)LCX0104

2002(12)LCX0104

IN THE CEGAT, COURT NO. II, NEW DELHI

S/Shri V.K. Agrawal, Member (T) and Krishna Kumar, Member (J)

COMMISSIONER OF CUSTOMS, ACU, NEW DELHI

Versus

FIBCOM INDIA LTD.

Final Order No. 541/2002-B, dated 27-12-2002 in Appeal No. C/17/2002-B

Cases Quoted

Fuji Electronics (MDU) Pvt. Ltd. v. Commissioner — 1997(10)LCX0182 Eq 1999 (106) ELT 0522 (Tribunal) — Referred [Para 2]

Ezhuthassan’s Electronics v. Commissioner — 2000 (036) RLT 0944 (CEGAT) — Referred [Para 2]

Advocated By : Shri M.P. Singh, JDR, for the Appellant.

Shri R. Parthasarthy, Advocate, for the Respondent.

[Order per : V.K. Agrawal, Member (T)]. - The issue involved in this appeal, filed by Revenue, is whether Optical Fibre Amplifiers imported by M/s. Fibcom India Ltd. are classifiable under sub-heading 8517.90 of the first Schedule to the Customs Tariff Act as confirmed by the Commissioner (Appeals) or under Heading 85.43 as claimed by the Revenue.

2. Shri M.P. Singh, learned D.R., submitted that the Respondents had imported goods which were described as “OF A UNIDIR BB (3.0)(MODULE)” ; that the Deputy Commissioner observed from the technical catalogue that the goods were essentially an optical fibre amplifier and determines the optical characteristics of the in-line amplifier and accordingly classified them under Heading 85.43 of the Customs Tariff Act; that however, the Commissioner (Appeals) under the impugned Order classified the products under sub-heading 8517.90 on the ground that the catalogue and the documents titled as “Generic Requirements of Dense Wavelength Division Multiplexing Equipment (DWDM) Gr. No. G/WDM/0l/0l/Nov.1999” issued by Telecommunication Engineering Centre, New Delhi, shows that optical fibre amplifiers are integral part of DWDM Multiplexer and Dimultiplexer. The Commissioner (Appeals), further, held that Heading 85.17 specifically covers Multiplexers and related line equipment for metal or optical fibre cables and by virtue of Note 2(b) to Section XVI of Customs Tariff Act, 1975 optical fibre would merit classification under sub-heading 8517.90. The learned D.R., further, submitted that optical fibre amplifier is used with Multiplexer equipment but an amplifier remains to be an amplifier irrespective of its use and it has to be classified as amplifier; that as per Explanatory Notes of HSN Heading 85.43 covers High or Intermediate frequency amplifiers (including measurement amplifier and aerial amplifier, that, therefore, the imported goods being optical fibre amplifier would appropriately be classifiable under heading 85.43; that finding of the Commissioner (Appeals) that optical fibre amplifier in question is primarily operating in optical domain and cannot be termed as electronic appliance or apparatus is erroneous; that optical fibre is classifiable under Heading 85.44 and as such the impugned goods are rightly classifiable under heading 85.43. He relied upon the decision in the case of Fuji Electronics (MDU) Pvt. Ltd. v. CCE, Trichi, 1997(10)LCX0182 Eq 1999 (106) ELT 0522 (Tribunal) wherein T.V. booster, which performs the function of boosting the T.V. signals, has been held not to be part of T.V. Reliance has also been placed on the decision in the case of Ezhuthassan's Electronics v. C.C., Cochin, 2000 (036) RLT 944 wherein also booster amplifier was classified under heading 85.43.

3. Opposing the appeal Shri R. Parthasarthy, learned Advocate, submitted that optical fibre amplifier is required for DWDM equipment; that the said equipment is an optical line system operating at discrete wavelength of which optical amplifier is the integral part; that the H.S.N. Explanatory Note below heading 85.17 mentions that apparatus for Carrier-Current Line Systems for digital line systems include all categories of multiplexer and related line equipment for metal or optical fibre cables; that the impugned product is an amplifier which provides optical amplification of multiplexed DWDM signals which forms an integral part of DWDM equipment; that optical amplifier is used at the multiplexer end for optical post and pre-amplification and as in line amplifier along with the transmission fibre; that as per Explanatory Notes the heading covers all the related line equipment for optical fibre cables the impugned product merit classification under sub-heading 8517.90. The learned advocate for the respondents, further, submitted that heading 85.43 is a residual heading which applies to electrical machines or apparatus having an individual function not specified or included elsewhere in the Chapter 85. As the impugned goods being clearly part of the multiplexing equipment is covered under sub-heading 8517.90, residual heading cannot be invoked for classification; that moreover Explanatory Note of HSN below heading 85.43 clearly indicates that this heading covers all electrical appliances and apparatus, nor covered more specifically by a heading of any other Chapter of the nomenclature, nor excluded by the operation of a legal Note to Section XVI or Chapter 85. He also mentioned that no doubt high or intermediate frequency amplifiers are covered by heading 85.43 but it does not mean that optical fibre amplifier or any other type of amplifier would merit classification under heading 85.43. The learned Advocate also mentioned that optical fibres are classifiable under heading 90.01 of the Tariff.

4. We have considered the submissions of both the sides. Heading 85.43 is a residual heading covering all electrical machines and apparatus having individual functions, not specified or included elsewhere in Chapter 85. As per Explanatory Notes of HSN the heading covers all electrical appliances and apparatus having individual functions. It is also mentioned in the Explanatory Notes that most of the appliances of this heading consist of an assembly of electrical goods or parts operating wholly electrically. Heading, however, also includes electrical goods incorporating mechanical features provided that such features are subsidiary to the electrical function of the machine or the appliances. The Explanatory Notes has given a list of products which are included in the said heading. One of such product is high or intermediate frequency amplifier. The Revenue has classified the impugned amplifier under heading 85.43 on the basis that high or intermediate frequency amplifiers are mentioned in the Explanatory Notes of HSN. The Commissioner (Appeals), after referring to the function of optical fibre as given in Hawley's Condensed Chemical Dictionary and referring to literature on optical amplifier as given in Wiley Encyclopaedia of Electrical and Electronics Engineering has given his specific finding that “optical fibre amplifiers are primarily operating in optical domain and cannot be termed as electrical appliance or apparatus”. The Revenue has not adduced any evidence to controvert the findings of the Commissioner (Appeals) except merely saying that it is working on electric current. We also observe that as per Wiley Encyclopaedia of Electrical and Electronics Engineering “optical amplifier can be thought of as a laser (Gain Medium) with a low feedback mechanism whose excited carrier amplify an incident signal but do not generate their own coherent signal. Similar to electronic amplifier optical amplifiers are used to compensate for signal attenuation resulting from distribution, transmission or components insertion losses.......Amplifier requires some form of external power to provide the energy for amplification. A voltage source is required for an electrical amplifier and a current or optical source is required for the optical amplifier.” This also goes to show that optical amplifiers are different from electronic amplifier. It has not been disputed by the Revenue that the impugned goods form integral part of the DWDM equipment. The learned Advocate for the Respondents has relied upon the Explanatory Note below heading 85.17 according to which apparatus for Carrier-Current Line Systems includes all categories of multiplexer and related line equipment for optical fibre cables. Further, line equipment includes transmitters and receivers or electro-optical converters. Combined Modulators (Modems) are also classifiable under heading 85.17. As the impugned goods is used in optical fibre base line transmission system it will be classifiable under heading 85.17. Accordingly we find no reason to interfere with the findings in the impugned order. The appeal is thus rejected.

Equivalent 2003 (152) ELT 108 (Tri. - Del.)