ORDER
P.G. Chacko, Member (J)
1. The respondents in this appeal of the department had imported microwave communication equipments viz. mini-link radio units and filed Bills of Entry during February – September 1999 claiming the benefit of concessional rates of duties of Customs on the goods under Notification No. 20/99-Cus. dated 28-2-1999 [SI. No. 175 in the Table annexed thereto]. The goods were provisionally assessed in terms of the Notification and accordingly they were cleared on payment of duty by the assessee. Subsequently, the Customs authorities proposed to finalize the assessments without extending the benefit of the Notification to the goods. The assessee contested this proposal, through counsel, before the adjudicating authority. The Deputy Commissioner rejected the assessee’s contentions and held that the benefit of concessional rates of duty was not admissible to the imported equipments in terms of Entry No. 2 or Entry No. 5 of List No. 29 appended to SI. No. 175 of the Table annexed to Notification No. 20/99-Cus. ibid. Accordingly, he ordered for finalization of assessments at tariff rate of duty leading to demand of differential duty of Rs. 2,94,39,156/- on the assessee. In the appeal filed by the party against the decision of the original authority, learned Commissioner (Appeals) held that, though the subject goods were not covered under Entry No. 2 of List No. 29 ibid, they were very much covered under Entry No. 5 of the said List. Accordingly, learned appellate Commissioner allowed the benefit of concessional rates of duties to the importer. Hence the present appeal.
2. Heard both sides. Learned SDR reiterated the grounds of the appeal and learned Counsel claimed support to the findings of the lower appellate authority from the Tribunal’s decision in the case of Spice Telecom v. Commissioner of Customs, Bangalore , upheld by the Supreme Court in Commissioner of Customs, Bangalore v. Spice Telecom .
3 In terms of SI. No. 175 in the Table annexed to Notification No. 20/99-Cus., the goods falling under Chapter 85 of the First Schedule to the Customs Tariff Act, 1975 and specified in List 29 required for cellular mobile telephone service carried the concessional rates of 5% (BCD) and 16% (CVD) during the period of imports in this case. This concession was subject to Condition No. 77. The appellant has no case that this condition was not satisfied by the assessee. The dispute in this case is whether the subject equipments were specified in List 29 appended to SI. No. 175 of the Table annexed to the Notification. It appears, the importer initially claimed under Entry No. 2 and Entry No. 5 of this List. The original authority rejected both these claims. The first appellate authority upheld the decision of the lower authority in relation to Entry No. 2. The assessee has not appealed against this decision of the appellate authority. The appellate authority granted the benefit of Entry No. 5 of List 29 to the assessee and the department is in appeal against the same. Thus the only dispute arising in this case is whether the equipments imported by the respondents can be considered to be ‘BTS ancillary equipment’ specified at Entry No. 5 of List 29 ibid.
4. After a perusal of the manufacturer’s literature on the product, produced by learned Counsel, we find that the product was meant to be used to provide point-to-point or point-to-multipoint backhaul connectivity between Base Transceiver Stations (BTS) of cellular communications system and Base Station Controller (BSC). The mini-link radio units route the calls between BTS and BSC. The findings to this effect recorded in the impugned order are seen to be supported by the following literature on MINI-LINK Microwave Radio Systems [supplied by counsel]:
The MINI-LINK product family is member of Ericsson’s large and powerful product line for telecommunication. The combined expertise of Ericsson, covering switching, cellular technology, radio and networking, means excellence in turnkey project management.
MINI-LINK is more than just a microwave radio. It is a complete system, including hardware, software, experience and competence. A MINI-LINK radio system integrates fully with existing telecom networks, adding new levels of flexibility. It has proved to be a reliable communication medium, a highly competitive alternative to copper and fibre cable.
The new generation, MINI-LINK E, is a natural step in Ericsson’s product development programme, in response to new requirements from a growing market and based on more than 20 years’ experience of microwave links.
Ericsson designers and engineers remain vigilant, seeking new technology and developments to keep MINT-LINK at the forefront of microwave communications. Advanced technology, constant product development of powerful functions, operational reliability and quality have resulted in the MINI-LINK E-programme.
MINI-LINK E is a general product for connections carrying nx2 Mbps traffic, and is designed primarily to meet increased demands for more efficient transmission systems in mobile telephone networks.
Besides cellular radio networks, applications include public and private networks. Having a transmission capacity from 2×2 up to 34+2 Mbps and a range of up to 50 km or more. MINI-LINK is a cost-efficient alternative to wired transmission systems.
The appellant has not contested the authenticity of the above literature and therefore we accept the same and sustain the findings of the appellate Commissioner.
5. In the case of Spice Telecom (supra), radio terminals imported by the party were held to be ancillary equipments for BTS and accordingly the benefit of Notification No. 11/97-Cus. (Similar to the Notification under consideration) was extended to the importer. The relevant portion of the Tribunals judgment is reproduced below:
7. The microwave equipments serve as interconnectivity either between BTS-BTS, BTS-BSC, BSC-BSC, BSC-MSC, MSC-MSC. In cellular telephony the entire area is divided into Cells. Each cell will be having a BTS. Several BTS are controlled by one Base Station Control (BSC). In turn, several BSCs are controlled by Main Switching Centre (MSC). This is roughly the configuration of Cellular Telephone System. Whenever a person activates his cell phone the first contact will be with the Cell, which is nearest. In other words the cell phone and the BTS would be in communication. It should be borne in mind that every cell phone itself is a transmitter and receiver. The signals, which are transmitted, are digitalized. The person who is called may be in some other cell. In that cell there will be a BTS. The person using the cell is put in touch with the person receiving the call through the network, which connects the BTS in the cell of the caller to the BTS in the cell of the receiver. In order to have interconnectivity Radio Terminals are must. The technical literature produced indicates that Radio Terminals and antennas are ancillary equipments of BTS. It is stated that the Radio Terminal transports the already converted Digital Speech and control information from the BTS equipment to the BSC, through the outdoor units and the antennas. Each communication link consists of one set comprising of two numbers Radio Terminal (IDU, ODU) and antennas at both ends. From the above it is very clear that without the Radio Terminals there cannot be any interconnectivity between BTS and BTS or BSC or MSC. In view of this the Radio Terminals definitely qualify to be ancillary equipments for BTS. On going through the technical literature it is seen that without the Radio Terminal there cannot be any interconnectivity at all and the Cellular Telephony System would not work. Hence, we hold that the imported items namely, Radio Terminals should be considered as BTS ancillary equipments and given the benefit of the above-mentioned notification. Further the benefit of exemption notification has been given by the Delhi Customs House. The Order-in-Original and Order-in-Appeal has no merits. We set aside the same and allow the appeals.
We find that the respondents’ case is fully supported by the above decision of the Tribunal.
6. In the result, the impugned order is sustained and this appeal is dismissed.
(Operative portion of the order was pronounced in open Court on 30-11-2006)