ORDER
T.K. Jayaraman, Member (T)
1. This is an appeal against OIA No. 121/03, dated 24-3-2003 passed by the Commissioner of Customs (Appeals), Bangalore.
2. The appellants imported Radio Terminals and cleared them on payment of duty. Later the appellant filed refund claim on the ground that the equipment imported is entitled for the benefit of exemption under Notification 11/97-Cus., as amended. The above exemption notification contains an entry in List 9(B) for BTS (Base Trans-receiver Station) and another entry for BTS ancillary equipment. The appellant argued that the Radio Terminal links the BTS with the main switching center, which in turn transfers the signals to other mobiles. It was emphasized that without these Radio Terminals the networking is not completed and switching from one mobile to another mobile is not possible. The original authority was not inclined to give the benefit of exemption notification and rejected the refund claim. In fact, on similar items the Delhi Customs House has granted the benefit of exemption notification. Aggrieved over the order of the original authority, the appellants approached the Commissioner (Appeals). The Commissioner (Appeals) held that the imported items, Radio Terminals cannot be treated as either BTS or BTS ancillary and is only a part of the cellular network. On the above ground, he also denied the benefit of the exemption notification and upheld the original authority’s order. Hence the appellant have come before this Tribunal.
3. Smt. Rukmani Menon, the learned Advocate appeared for the appellant and Shri R.N. Vishwanath, the learned SDR appeared for Revenue.
4. The learned Advocate said that the Commissioner (Appeals) as well as the original authority have given contradictory findings in their orders. She produced Technical literature to show that the imported item namely, Radio Terminals are part of Base Trans-receiver stations. She said that even if they are not considered as Parts, at least they should be treated as Ancillary Equipments.
5. The learned Departmental Representative reiterated the points mentioned in the Order in Original and the Order in Appeal.
6. We have gone through the records of the case carefully. In order to appreciate the role of the imported equipments, some knowledge of Cellular Network Services is necessary. For the cellular communications microwaves are used. The microwave frequency starts above 1.9 Ghz. The Ministry of Communication and Department of Wireless processing has specified the 15 Ghz and 23 Ghz level zones for use in the Global System of Mobile (GSM) Communications. Frequency levels between 14.400 Ghz to 15.350 Ghz is defined for usage for GSM communications vide spectrum licence issued by the Wireless Processing Cell, a division of Ministry of Communications. The above frequency levels are being distinguished and divided into specific spot frequencies for usage among cellular service providers. This is to ensure that the transmission of other service providers does not interfere with each other. In order to operate between the allocated frequencies it should be ensured that all the microwave equipments are configured within the specified frequency levels. The microwave equipments cannot be imported freely and are allowed only on appropriate licence from Wireless Process Cell, Ministry of Communications.
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.
(Pronounced in open Court on 20-5-2005)