Reliance Jio Infocomm Ltd. Vs Commissioner Of Customs (Import)

,,,,

1. The order dated 14.06.2019 passed by the Commissioner of Customs (Import), Air Cargo Complex, Mumbai, the Commissioner, adjudicating the",,,,

show cause notice dated 19.07.2018 that had called upon Reliance Jio Infocomm Ltd, Reliance Jio to show cause as to why the classification of the",,,,

goods described in the Bills of Entry as eNodeB BTS/Micro Cell BTS/Femto Cells BTS/Pico Cells BTS, the goods and claimed to be Base",,,,

Transceiver Stations for the 4G Long Term Evolution, LTE network should not be changed from Customs Tariff Heading, CTH 8517 61 00 to CTH",,,,

8517 62 90 of the Customs Tariff, has led to the filing of Customs Appeal No. 87665 of 2019 by Reliance Jio and Customs Appeal No. 87872 of 2019",,,,

by the Commissioner.,,,,

2. The aforesaid order dated 14.06.2019 passed by the Commissioner records the following findings :,,,,

i. Reliance Jio did not mis-declare the goods since they are ‘Base Stations’, especially in normal terminology;",,,,

ii. Thus, if the goods have not been mis-declared, then the payment of duty/differential duty on account of short payment or non-payment of duty has",,,,

to be restricted to the normal statutory period prescribed under sub-section (1) section 28 of the Customs Act, 1962, the Customs Act and the",,,,

extended period contemplated under sub-section (4) of section 28 cannot be invoked;,,,,

iii. It is true that on a plain reading of the term ‘Base Station’, the goods appear to be classifiable under CTH 8517 61 00, which is specific for",,,,

‘Base Stations’, but as the technology involved in these goods goes beyond the basic functionalities of a ‘Base Station’, the goods would",,,,

more appropriately be classifiable under CTH 8517 62 90;,,,,

iv. Reliance Jio had itself, for the period prior to January 01, 2016, classified the goods under CTH 8157 62 90 and claimed exemption from payment",,,,

of duty in terms of a Notification dated 17.03.2012. The contention of the Department that this Exemption Notification would not be applicable cannot,,,,

be accepted and the goods would merit exemption under the Notification dated March 17.03.2012; and,,,,

v. Reliance Jio had classified the goods w.e.f January 01, 2016, under CTH 8517 61 00 and the Bills of Entry were provisionally assessed. The",,,,

Department should reclassify the goods under CTH 8157 62 90, and the differential duty with interest should be demanded w.e.f 01.03.2016, on which",,,,

date the Notification dated 17.03.2016 was amended to withdraw the grant of exemption to such goods.,,,,

3. Reliance Jio has, accordingly, filed Customs Appeal No. 87665 of 2019 contending that the goods are classifiable under CTH 8517 61 00, which",,,,

entry is specific for ‘Base Stations’ and not under CTH 8157 62 90, which is a residuary sub-heading under ‘Other’.",,,,

4. The Department has filed Customs Appeal No. 87872 of 2019 contending that the extended period of limitation contemplated under sub-section (4),,,,

of section 28 of the Customs Act was correctly invoked; that the Exemption Notification dated 17.03.2012 was not applicable; and the Notification,,,,

dated March 01, 2005, which was specifically amended by Notification dated 11.07.2014, was applicable.",,,,

5. The Government of India, by a License Agreement dated 21.10.2013, granted Reliance Jio a ‘Unified License’ to set up and operate the",,,,

telecommunication services specified in the Agreement as per the terms & conditions described in the Schedule to the Agreement. Chapter IV,,,,

contained in the Schedule to the Agreement deals with ‘Technical Conditions’. It provides that the equipment and products to be used must,,,,

meet the relevant standards set by international forum, such as Third Generation Partnership Project, 3GPP. Clause 24.1 provides for norms to be met",,,,

in respect of Base Transceiver Stations, BTS to be set up for providing the service. The roll out obligations stated in Clause 4 of Chapter XIII of the",,,,

said Schedule require Reliance Jio to install and commission at least one ‘Base Station’ in a city/town for which frequency has been allotted by,,,,

WPC. It is for this reason that the Government of India granted license to Reliance Jio to import BTS and in terms of the import license, Reliance Jio",,,,

imported the goods under various Bills of Entry during the period from October 2014 to May 2017. Initially, upto December, 2015, Reliance Jio",,,,

classified the goods under CTH 8517 62 90 and claimed exemption of duty under a Notification dated 17.03.2012. Thereafter, w.e.f. January 2016,",,,,

Reliance Jio started claiming classification under 8517 61 00 for which the rate of duty was ‘NIL’, as it realized that ‘Base Stations’",,,,

were specifically covered under CTH 8517 61 00.,,,,

6. Before adverting to the submissions advanced by Shri J.C. Patel, learned Counsel for Reliance Jio and Ms. Manisha Goel and Shri Ramesh Kumar,",,,,

learned Authorized Representatives for the Department, it would be useful to reproduce the findings recorded by the Commissioner in the impugned",,,,

order, the gist of which have been stated above, and they are as follows :",,,,

“67. The goods in question have been described as E-node B BTS, Microcell BTS, Air Synergy/Air Harmony/Air Velocity BTS etc. and",,,,

these have either been classified under Customs Tariff item 85176290 or 85176100 as per the details given in Annexure I & II attached,,,,

with the subject show cause notice. As far as description of the goods is concerned, while averring that the Show Cause Notice itself admits",,,,

that the goods are commercially known as base stations, the noticee (importer) has inter-alia placed reliance on the licenses granted by",,,,

WPC to contend that the impugned goods have been described as base stations even in the licenses issued by WPC……………â€S¦o to,,,,

begin with, I would accept that the impugned goods are indeed base stations especially in normal terminology as the Licensing authority i.e",,,,

WPC has also broadly described the goods as Base Station. Hence, I do not consider that the noticee (importer) mis-declared the goods. Now",,,,

if the goods have not been mis-declared then the demand of duty/differential duty on account of short payment or non-payment of duty will,,,,

certainly needs to be limited to the statutory period as defined under the extant laws and rules, i.e, Section 28... of the Customs Act, 1962 (as",,,,

amended); there is no way that the extended period as envisaged under Section 28(4) can be invoked.,,,,

68. ………..No doubt on plain reading of the term Base Station, it appears to be correctly classifiable under CTH 85176100 which is",,,,

meant specifically for Base Stations but when seen with the perspective of the technology involved in these goods which encompass certain,,,,

other control features which go beyond the basic functionalities of a Base Station of CTH 85176100, I find that these goods are more",,,,

appropriately classifiable under CTH 85176290. In this context, I am in full agreement with the case of the Revenue as detailed at",,,,

paragraphs 6 (6.1 to 6.6) - reproduced below â€",,,,

********* ********* *********,,,,

6.4 Technically, BTS, NodeB and eNodeB are the last mile network elements that process the signals and information prior to transmitting",,,,

through antennas to the air interface. Node B does that for UMTS (Universal Mobile Telecom System) or any other third-generation,,,,

wireless technology while BTS does the same for GSM (Global System for Mobile Communication), CDMA (Code Division Multiple Access),",,,,

or any other second-generation wireless technology. The term BTS is referred for the base station of 2nd Generation wireless technologies,,,,

such as GSM and CDMA. E-UTRAN Node B, also known as Evolved Node B(a,bbreviated as eNodeB or eNB) is the element in E-UTRAN",,,,

of LTE that is the evolution of the element Node Bin UTRA of UMTS. It is the hardware that is connected to the mobile phone network that,,,,

communicates directly with mobile handsets {User Equipment (UEs)}. Traditionally, a Node B of 3G wireless technology has minimum",,,,

functionality, and is controlled by a Radio Network Controller (RNC). However, with an eNB, there is no separate controller element .BTS",,,,

functions on centralised intelligence control system operating on single band connecting to one user through one BTS at a time, while",,,,

eNode-B functions on distributed intelligence control system simultaneously operating on multiple band through 4 or more eNode-B at a time,,,,

on the principle of multiple input multiple output (MIMO) technology, having flat architecture. This has simplified the architecture and",,,,

allows lower response times.,,,,

********* ********* *********,,,,

Aforesaid diagram clearly reveals the distinction between BTS as used in 2G technology, NodeB as used in 3G technology & ENodeB as",,,,

used in 4G/LTE Technology.,,,,

6.5 eNodeB is an LTE/4G equipment which has built in functionality of Base Transceiver Station (BTS) and Base Station Controller (BSC),,,,

of 2G wireless network or NodeB and Radio Network Controller (RNC) of 3G wireless networkA. lthough it may be commercially referred,,,,

as 'Base Station' of LTE network, its functionality is beyond the earlier Base Stations (Base Transceiver Station of 2G networks or NodeB of",,,,

3G networks). Therefore classification of eNodeB should take into consideration the fact that it is a machine performing functions of both,,,,

BTS/eNodeB as well as BSC/RNCI.n the communication network architecture BSC/RNC controls and manages many BTS/ Nodes and it is,,,,

also provides intelligence to BTS/NodeB. In fact BSC/RNC works as a small switch within the network sub-system and it enables distributed,,,,

architecture of eNode (ie. Base Band Unit and Remote Radio Heads).,,,,

6.6 In view of functions detailed above and by applications of GIR 1 & 6, it appears that eNodeB is covered under the description given",,,,

under heading 8517 62 i.e. machines for reception, conversion and transmission or regeneration of voice, image or other data, including",,,,

switching and routing apparatus and rightly classifiable under heading 8517 62 890.,,,,

********* ********* *********,,,,

71. As far as claim of exemption from duty under Exemption Notification No. 12/2012 dated 17.03.2012 Serial No. 372(I) is concerned,I",,,,

am of the opinion that notwithstanding the contention of Revenue that the exemption was not merited…………these goods did merit the,,,,

exemption as it was only on 01.03.2016. i.e., much later that another Notification No. 12/2016 was issued to specifically deny the benefit of",,,,

exemption to any product classified under CTH 85176290 which had LTE technology embedded into it .I am also not favourably disposed,,,,

towards the view of the Revenue that another distinct Exemption Notification No. 24/2005-Cus dated 1-3-2005 which was later amended by,,,,

way of Notification no. 11/2014-Cus dated 11-7-2014 would have bearing on the applicability of Exemption Notification No. 12/2012 dated,,,,

17.03.2012,,,,

72. Hence, I am of the firm view that in all such cases of provisional assessments, at the instant of finalization of such provisional",,,,

assessments, the proper officer of Revenue shall re-classify the goods correctly under CTH 85176290 where the provisional classification is",,,,

CTH 85176100; the demand and recovery of consequent differential duty with interest as per extant laws and rules shall follow with,,,,

reference to Bills of Entry post 01.03.2016, i.e, when Notification No. 12/2016 came into force and specifically excluded products having",,,,

LTE functionalities / technology embedded, from the purview of the exemption, the exemption benefit if availed shall be denied and",,,,

consequential differential duty and interest shall be demanded and recovered. Similarly the above would be applicable to finally assessed,,,,

Bills of Entry listed in Annexure B to the show cause notice mutatis mutandis but for the fact that only the Bills of Entry falling within the,,,,

statutory period of Section 28(1) shall be covered for re-assessment for re-classification.â€​,,,,

(emphasis supplied),,,,

7. Learned Counsel for Reliance Jio submitted that :,,,,

(i) There is enough material to establish that eNodeB, Femto Cells/ Pico Cells are ‘Base Stations’ in the 4G network which communicate with",,,,

the User Equipment. Thus, the goods have correctly been classified under CTH 8517 61 00;",,,,

(ii) Every cellular network, whether, it be 1G Network (First Generation Network), 2G Network (Second Generation Network), 3G (Third Generation",,,,

Network) or 4G Network (Fourth Generation Network), necessarily has to have a Base Station and it is inconceivable to have a Cellular Network",,,,

without a Base Station. Therefore, 4G network must necessarily also have Base Station, which is the eNodeB. eNdodeB, therefore, deserves to be",,,,

classified under the specific sub-heading for ‘Base Stations’ i.e. 8517 61 00;,,,,

(iii) A Tariff entry cannot be given a static interpretation, ignoring evaluation in technology and in this connection reliance has been placed on a",,,,

decision of the Supreme Court in Collector of Customs & Central Excise vs. Lekhraj Jessumal & Sons, 1996 (82) E.L.T. 162 (S.C.);",,,,

(iv) In any event, by application of Note 3 of Section XVI of the Customs Tariff, eNodeB merits classification as a ‘Base Station’ under CTH",,,,

8517 61 00. The Instructions dated 07.06.2017, on the basis of which the show cause notice was issued, has ignored the correct principles of",,,,

classification;,,,,

(v) Once the Board’s Instructions dated 07.06.2017 as well as the show cause notice accept that in commercial parlance, eNodeB is a ‘Base",,,,

Station’ of LTE network, that itself is sufficient to classify the goods under CTH 8571 61 00, which is specific for ‘Base Stations’ and the",,,,

question of not classifying the goods as ‘Base Stations’ on the ground of its advanced evolved technology compared to ‘Base Stations’ of,,,,

earlier technology does not arise. In this connection, reliance has been placed on the decision of the Supreme Court in Plasmac Machine Mfg. Co.",,,,

Pvt. Ltd. vs. Collector of Central Excise, 1991 (51) E.L.T. 161 (S.C.);",,,,

(vi) The Commissioner was justified in holding that the extended period of limitation contemplated under sub-section (4) of section 28 of the Customs,,,,

Act would not be applicable; and,,,,

(vii) The Commissioner was justified in holding that the Exemption Notification dated 17.03.2012 would be applicable and that the Exemption,,,,

Notification dated 01.03.2005, as amended on 11.07.2014, would not be applicable.",,,,

8. Learned Authorized Representatives appearing for the Department have, however, submitted that :",,,,

(i) The goods have been correctly classified under CTH 8517 62 90, as eNodeB performs many more functions than performed by the earlier ‘Base",,,,

Tariff Item,Description of goods,Unit,Rate of,Duty

8517 18 10 --- Push button type,,,,

8517 18 90 --- Other u Free -,,,,

- Other apparatus for transmission or reception of voice, u Free -",,,,

images or other data including apparatus for,,,,

communication in a wired or wireless network (such as,,,,

a local or wide area network):,,,,

8517 61 00 -- Base stations u 10% -,,,,

8517 62 -- Machines for the reception, conversion and",,,,

transmission or regeneration of voice, images or other",,,,

data, including switching and routing apparatus:",,,,

8517 62 10 --- PLCC equipment u Free -,,,,

8517 62 20 --- Voice frequency telegraphy u Free -,,,,

8517 62 30 --- Modems (modulators-demodulators) u Free -,,,,

8517 62 40 --- High bit rate digital subscriber line system (HDSL) u Free -,,,,

8517 62 50 --- Digital loop carrier system(DLC) u Free -,,,,

8517 62 60 --- Synchronous digital hierarchy system(SDH) u Free -,,,,

8517 62 70 --- Multiplexers, statistical multiplexer u Free -",,,,

8517 62 90 --- Other u 20% -,,,,

12. The competing entries have been highlighted in the aforesaid Table, but before proceeding with the analysis, it would also be necessary to refer to",,,,

section 2 of the Tariff Act. It provides that the rates at which the duties of customs shall be levied under the Customs Act are specified in the First,,,,

and Second Schedules.,,,,

13. The relevant portions of the General Rules and the General Explanatory Notes contained in the First Schedule also need to be examined. They are,,,,

reproduced below:,,,,

“THE FIRST SCHEDULE- IMPORT TARIFF GENERAL RULES FOR THE INTERPRETATION OF THIS SCHEDULE,,,,

Classification of goods in this Schedule shall be governed by the following principles:,,,,

1. ********,,,,

2. ********,,,,

3. When by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification",,,,

shall be effected as follows:,,,,

(a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However,",,,,

when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of,,,,

the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them",,,,

gives a more complete or precise description of the goods.,,,,

(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale,",,,,

which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their",,,,

essential character, in so far as this criterion is applicable.",,,,

(c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical",,,,

order among those which equally merit consideration.,,,,

4. Goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to,,,,

which they are most akin.,,,,

THE GENERAL EXPLANATORY NOTES TO IMPORT TARIFF,,,,

1. Where in column (2) of this Schedule, the description of an article or group of articles under a heading is preceded by “-â€, the said",,,,

article or group of articles shall be taken to be a sub-classification of the article or group of articles covered by the said heading. Where,",,,,

however, the description of an article or group of articles is preceded by “--â€​, the said article or group of articles shall be taken to be a",,,,

sub-classification of the immediately preceding description of the article or group of articles which has “-â€. Where the description of an,,,,

article or group of articles is proceeded by “---†or “----â€, the said articles or group of articles shall be taken to be a sub-",,,,

classification of the immediately preceding description of the article or group of articles which has “-â€​ or “--â€​.,,,,

2. ********,,,,

3. ********â€​,,,,

14. It would be clear from aforesaid that a single dash (-) at the beginning of a description denotes an article that belongs to a group covered under a,,,,

heading. A double dash (--) indicates that the article is a sub-classification of the preceding article that has a single dash. Similarly, a triple dash (---)",,,,

or a quadruple dash (----) indicate that the article is a sub-classification of the preceding article that has a double dash or triple dash.,,,,

15. It would further be seen from the aforesaid table that at the single dash level, there are three sub-headings and they are:",,,,

- Telephone sets, including telephones for cellular networks or for other wireless networks",,,,

- Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or",,,,

wireless network (such as a local or wide area network),,,,

- Parts,,,,

16. It is not in dispute that the goods involved in this appeal would fall in the second single dash. This single dash has two double dash entries. A,,,,

double dash would mean that these two entries are sub-classification under the single dash. The two dash level entries are:,,,,

-- 8517 61 00 for ‘Base Stations’,,,,

-- 8517 62 for ‘Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including",,,,

switching and routing apparatus.’,,,,

17. It would also be seen that under the second double dash level of 8517 62, there are 8 triple dash (---), the last triple dash being 8517 62 90 for",,,,

‘Other’.,,,,

18. The dispute in the present case is whether the description of the goods would be under the first double dash of the second single dash i.e. 8517 61,,,,

00 for ‘Base Stations’ or under the eighth triple dash of the second double dash i.e. 8517 62 90 for ‘Other’.,,,,

19. The contention of Reliance Jio is that the description of the goods would be ‘Base Stations’ under CTH 8517 61 00, while the contention of",,,,

the Department is that the description of the goods would be under CTH 8517 62 90 for ‘Other’. The Department contends that eNodeB,,,,

performs many more functions than performed by the earlier Base Stations and a ‘Base Station’ should cover only an apparatus which can,,,,

perform the functions of transmission or reception of voice, images or other data and if the apparatus performs other functions also, the goods cannot",,,,

be classified under ‘Base Stations’.,,,,

20. It would also be useful to reproduce the relevant portions of Heading 8517 to the Explanatory Notes of HSN and they are:,,,,

Harmonized Commodity Description and Coding System Explanatory Notes,,,,

8517-Â Â Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or",,,,

reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide",,,,

area network), other than transmission or reception apparatus of heading 84.43, 85.25, 85.27 or 85.28(+).",,,,

- Telephone sets, including telephones for cellular networks or for other wireless networks:",,,,

8517.11Â Â Â Â Â Â Â Â Â Â -- Line telephone sets with cordless handsets,,,,

8517.12Â Â Â Â Â Â Â Â Â Â -- Telephones for cellular networks or for other wireless networks,,,,

8517.18Â Â Â Â Â Â Â Â Â Â -- Other,,,,

- Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or",,,,

wireless network (such as a local or wide area network):,,,,

8517.61Â Â Â Â Â Â Â Â Â Â -- Base stations,,,,

8517.62Â Â Â Â Â Â Â Â Â Â -- Machines for the reception, conversion and transmission or regeneration of voice, images or other data,",,,,

including switching and routing apparatus,,,,

8517.69Â Â Â Â Â Â Â Â Â Â -- Other,,,,

8517.70Â Â Â Â Â Â Â Â Â Â - Parts,,,,

This heading covers apparatus for the transmission or reception of speech or other sounds, images or other data between two points by",,,,

variation of an electric current or optical wave flowing in a wired network or by electro-magnetic waves in a wireless network. The signal,,,,

may be analogue or digital. The networks, which may be interconnected, include telephony, telegraphy, radio-telephony, radio-telegraphy,",,,,

local and wide area networks.,,,,

(I) TELEPHONE SETS, INCLUDING TELEPHONES FOR CELLULAR NETWORKS OR FOR OTHER WIRELESS NETWORKS",,,,

*******,,,,

(II) Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or",,,,

wireless network (such as a local or wide area network),,,,

(A) Base stations.,,,,

The most common types of base stations are those for cellular networks, which receive and transmit radio waves to and from cellular",,,,

telephones or to other wired or wireless networks. Each base station covers a geographical area (a cell). If the user moves from one cell to,,,,

another while telephoning, the call is automatically transferred from one cell to another without interruption.",,,,

(B) Entry-phone systems.,,,,

The systems usually consist of a telephone handset and keypad or a loudspeaker, a microphone and keys. These systems are usually",,,,

mounted at the entrance of buildings housing a number of tenants. With these systems, visitors can call certain tenants, by pressing the",,,,

appropriate keys and talk to them.,,,,

(C) Videophones.,,,,

Videophones for buildings, which are a combination consisting principally of a telephone set for line telephony, a television camera and a",,,,

television receiver (transmission by line).,,,,

(D) Apparatus for telegraphic communication other than facsimile machines of heading 84.43.,,,,

These apparatus are essentially designed for converting characters, graphics, images or other data into appropriate electrical impulses, for",,,,

transmitting those impulses, and at the receiving end, receiving these impulses and converting them either into conventional symbols or",,,,

indications representing the characters, graphics, images or other data or into the characters, graphics, images or other data themselves.",,,,

Examples are:,,,,

(1) Apparatus for transmitting messages, such as dial or keyboard transmitters and automatic transmitters (e.g., teleprinter or teletypewriter",,,,

transmitters).,,,,

(2) Apparatus for receiving messages (e.g., teletypewriter receiver). In some cases the receiver and the transmitter apparatus are combined",,,,

into one receiver-transmitter.,,,,

(3) Picture telegraphic apparatus. The ancillary photographic equipment used with this apparatus (e.g., developing equipment) falls in",,,,

Chapter 90.,,,,

21. To appreciate the contentions advanced by the learned Counsel for Reliance Jio and the learned Authorized Representatives for the Department, it",,,,

would be useful to understand what a ‘Base Station’ is.,,,,

BASE STATION,,,,

22. A ‘Base Station’ is considered to be a fixed equipment in the Access part of the Cellular Telephone Network, which communicates with the",,,,

User Equipment i.e. a Mobile Phone/Cellular Phone. It receives and transmits radio waves to and from cellular telephones or to other wired or,,,,

wireless networks. Since the user mobile phone accesses the network by communicating with the Base Station by radio waves, this portion of the",,,,

network is referred to as Radio Access Network and as the Base Station transmits and receives radio waves to and from the user mobile phone, it is",,,,

also referred to as Base Transceiver Station.,,,,

23. A Cellular network is divided into Cells (Geographical areas) and each Base Station covers a Cell. If the user moves from one cell to another,,,,

while telephoning, the call is automatically transferred from one cell to another without interruption. Such automatic transfer of the call from the Base",,,,

Station in one cell to the Base Station in another cell to which the user moves while telephoning is referred to as “Handoverâ€​.,,,,

24. HSN also describe ‘Base Stations’ for cellular networks as those which receive and transmit radio waves to and from cellular telephones,,,,

and each ‘Base Station’ covers a geographical area which is called a ‘cell’. It also states that if a user moves from one cell to another,,,,

while telephoning, the call is automatically transferred from one cell to another without interruption.",,,,

25. It would also, at this stage, be useful to understand the concept of ‘Base Stations’ under 1G, 2G, 3G and 4G. The 1G Network was the first",,,,

Cellular Network. It was based on Analog signals. In 1G Network, all the ‘Handover’ decisions were taken at the Base Station itself. The 2G",,,,

Network changed to Digital signals from Analog Signals and was in that sense the first generation of digital radio technology. In the digital system, the",,,,

technology in 2G and 3G was not evolved enough to enable the Base Stations to ‘Handover’ the signals from one Base Station to another as the,,,,

mobile user moved from one cell to another, while on the call. This necessitated a separate Base Station Controller for ‘Handover’ of the calls",,,,

from one Base Station to another. This was a drawback in the technology since the time taken for ‘Handover’ via the Base Station Controller,,,,

slowed down the speed of connection. According to Reliance Jio, this drawback was overcome in 4G Technology and a ‘Base Station’ of 4G",,,,

Technology was evolved enough to provide the Base Station the required intelligence to communicate with and ‘Handover’ calls directly to,,,,

other ‘Base Stations’ without intervention of any Base Station Controller. Such an evolved Base Station of 4G technology, according to",,,,

Reliance Jio, is the evolved Node B i.e. eNodeB.",,,,

26. It has, therefore, to be examined whether the evolved Node B i.e. eNodeB, would be a Base Station in the 4G network. According to the learned",,,,

Counsel for Reliance Jio, in the 4G network, the Base Station which communicates/interfaces with the Mobile/Cellular Phone and by means of which",,,,

the User Mobile Phone gets access to the Network, is eNodeB. Further contention of the learned Counsel for Reliance Jio is that the Micro Cells",,,,

BTS/Femto cells BTS/Pico Cells BTS are miniature eNodeB or Home eNodeB, which cater to smaller areas such as residential complex or office",,,,

complex.,,,,

27. To substantiate the aforesaid statements, learned Counsel for Reliance Jio referred to websites and literature/books on this aspect and they are:",,,,

(i) The 3GPP Standards, which have also been referred to in the show cause notice at paragraph 6.2, mention that eNodeB and Home eNodeB are",,,,

the ‘Base Stations’ in 4G LTE network, which communicate with the User Equipment and this would be evident from the two websites namely,",,,,

http://www.3gpp.org/technologies/key-wordsacronyms/98-lte and http://www.3gpp.org/technologies/keywordsacronyms/100-the-evolved-paccket-,,,,

core Â,,,,

(a) The website http://www.3gpp.org/technologies/keywords-acronyms/98-lte contains in the following information :,,,,

“The LTE access network is simply a network of base stations, evolved NodeB (eNB) ,generating a flat architecture (figure 2). There is",,,,

no centralized intelligent controller, and the eNBs are normally inter-connected viathe X2-interface and towards the core network by the",,,,

S1-interface (figure 2). The reason for distributing the intelligence amongst the base-stations in LTE is to speed up the connection set-up and,,,,

reduce the time required for a handover. For an end-user the connection set-up time for a real time data session is in many cases crucial,",,,,

especially in on-line gaming. The time for a handover is essential for real-time services where end-users tend to end calls if the handover,,,,

takes too long.â€​,,,,

(emphasis supplied),,,,

(b) The website http://www.3gpp.org/technologies/keywords-acronyms/100-the-evolved-paccket-core contains the following information :,,,,

“Figure 2 shows a very basic architecture of the EPS when the User Equipment (UE) is connected to the EPC over E-UTRAN (LTE access,,,,

network). The Evolved NodeB (eNodeB) is the base station for LTE radio .In this figure, the EPC is composed of four network elements: the",,,,

Serving Gateway (Serving GW), the PDN Gateway (PDN GW), the MME and the HSS. The EPC is connected to the external networks, which",,,,

can include the IP Multimedia Core Network Subsystem (IMS).â€​,,,,

(emphasis supplied),,,,

(ii) In the book LTE for UMTS OFDMA and SC-FDMA Based Radio Access, the authors Harri-Holma and Antti Toskala have written:-",,,,

“All radio protocols, mobility management header compression and all packet retransmissions are located in the base stations called",,,,

eNodeB. eNodeB includes all those algorithms that are located in Radio Network Controller (RNC) in 3GPP………S..imply put, the",,,,

eNodeB is a radio base station that is in control of all radio related functions in the fixed part of the system. Base stations such as eNodeB,,,,

are typically distributed throughout the networks coverage area, each eNodeB residing near the actual radio antennas.â€​",,,,

(emphasis supplied),,,,

(iii) In the preface of the Book Physical Layer Multi-Core Prototyping, the authors Maxime Pelcat â€" Slaheddine Aridhi and Jonathan Piat â€" Jean-",,,,

Francois Nezan have written:-,,,,

“The consequence of the evolution of the mobile wireless standards is an increased need for the system to support multiple standards and,,,,

multi-component devices for backward compatibility. These two requirements greatly complicate the development of telecommunication,,,,

systems, imposing the optimization of device parameters over numerous constraints, such as performance, area and power. Achieving device",,,,

optimization requires a deep understanding of application complexity and the choice of an appropriate architecture to support this,,,,

application.,,,,

Of particular note, the new, feature-rich wireless standard called long-term evolution (LTE) is a complex application that needs a large",,,,

amount of processing power. LTE is the next evolutionary step after 3G for mobile wireless communication, and is aimed at increasing the",,,,

wireless network capacity while improving the spectral efficiency. LTE unites many technological innovations from diverse research areas,,,,

such as digital signal processing, Internet protocols, network architecture, and security, and, as such, will drastically change the way that",,,,

the worldwide mobile network is used in the future. LTE is anticipated to be the first truly global wireless standard, as it may be deployed in",,,,

a variety of spectrum and operating scenarios, and has the capacity to support a myriad of wireless applications. Numerous operators and",,,,

service providers around the world have already deployed LTE on their networks or have announced LTE as their intended next generation,,,,

technology.,,,,

An LTE eNodeB or base station must use powerful embedded hardware platforms, to offer a complete feature set with reasonable cost and",,,,

power. Multi-core digital signal processors (DSP) combine cores with processing flexibility and hardware coprocessors that accelerate,,,,

complex functionalities or repetitive processes, and, as such, are suitable hardware architectures to execute complex operations in real-",,,,

time.â€​,,,,

(emphasis supplied),,,,

(iv) Technical Literature to show that Femto Cells BTS/Home eNodeB/Pico cells BTS are also Base Stations. Chapter 19 of WCDMA for UMTS,",,,,

Fifth Edition, Edited by Harri Holma and Antti Toshala, deals with ‘Home Node B and Femtocells’ and the relevant portion is reproduced below",,,,

:,,,,

“For the zero-touch and plug & play market use cases, the dedicated 3GPP radio technology is the Home Node B (HNB) which belongs",,,,

to the Femto segment in Figure 19.1. ‘Home' relates to usage in a customer's home, e.g. also denoted customer premise equipment (CPE),",,,,

but this term is rather limited compared to the discussed uses for the radio technology which encompasses also small to medium enterprise,,,,

(SME) and hot-spot applications as can be seen in Figure 19.1.,,,,

xxxxxx xxxxxx,,,,

xxxxxx,,,,

The HNB is fundamentally a new small base station in the sense that it has a downlink receiver for own transmission band (e.g. mini-,,,,

‘UE') built-in which enables it to measure and assess the radio conditions in its intended transmission bands. As this can be done prior to,,,,

registration (e.g. when it actually starts transmitting), it opens-up new possibilities for both low-cost self- optimization and for sending radio",,,,

measurements to a centralized node for more centralized deployment optimization.,,,,

xxxxxx  xxxxxx,,,,

xxxxxx,,,,

As a terminology issue in this chapter, the term femtocell denotes a small cell, typically an indoor one with a radius in the order of up to",,,,

several tens of meters. It is the cell hosted by an HNB. When we talk about the specific 3GPP radio technology for the femtocell including,,,,

the specifications side, the term HNB is used. When touching upon the topic of architecture for the HNB, the tem 3GF emto denotes an HNB",,,,

which uses the 3GPP UMTS Femto architecture to connect to the core network which is discussed in Section 19.4.,,,,

Although this chapter specifically addresses the 3G HNB, most of the information is relevant to both 3G and LLTE.I n 3GPP, a large",,,,

amount of the home base station work for the two radio technologies is done jointly although some differences apply, related to e.g.",,,,

Name of Product,Varient(s),,,

Base Station,"1. BTS (GSM)

2. NodeB (WCDMA)

3. eNodeB (LTE)

4. MSR â€" GSM

5. MSR â€" WCDMA

6. MSR â€" LTE

7. MSR â€" GSM + WCDMA

8. MSR WCDMA + LTE

9. MSR GSM + WCDMA + LTE

10. MSR GSM + LTE

11. MSR LTE â€" WCDMAa nd/ or LTE with Active Antenna

System",,,

(i) RNC,,,,

5. The Radio Network Controller (RNC) is equivalent of BSCs in 3G and is responsible for controlling the Node Bs that are connected to it.,,,,

It carries out radio resource management, some of the mobility management functions and is the point where encryption is done before user",,,,

data is sent to and from the mobile.,,,,

(ii) NodeB,,,,

6. NodeB in UTMS is equivalent of BTS in GSM. It is the part of the network that communicates directly with mobile handsets.,,,,

(c) 4G Wireless,,,,

(i) eNodeB,,,,

8. The evolved RAN for LTE consists of a single node, i.e., the eNodeB (eNB) that interfaces with the UE. The eNB hosts the PHYsical (PHY),",,,,

Medium Access Control (MAC), Radio Link Control (RLC), and Packet Data Control Protocol (PDCP) layers that include the functionality",,,,

of user-plane header-compression and encryption. It also offers Radio Resource Control (RRC) functionality corresponding to the control,,,,

plane. It performs many functions including radio resource management, admission control, scheduling, enforcement of negotiated UL QoS,",,,,

cell information broadcast, ciphering/deciphering of user and control plane data, and compression/decompression of DL/UL user plane",,,,

packet headers.â€​,,,,

(ii) A Monthly Bulletin of telecom technology called ‘Technology Digest’ (Issue no. 19, January 2013), wherein eNodeB has also been",,,,

described and the relevant portion is reproduced below:,,,,

“In LTE-Advanced network architecture, NodeB in 3G system was replaced by evolved NodeB (eNB), which is a combination of NodeB",,,,

and radio network controller (RNC). The eNB communicates with User Equipments (UE’s) and can serve one or several cells at onetime.,,,,

The evolved packet core (EPC) comprises of the four components as shown in Figure-1. The serving gateway(S -GW) is responsible for,,,,

routing and forwarding packets between UE’s and packet data network (PDN) and charging. Additionally, it serves as a mobility",,,,

anchor point for handover. The mobility management entity (MME) manages UE access and mobility, and establishes the bearer path for",,,,

UE’s. Packet data network gateway to the PDN, and policy and charging rules function (PCRF) manages policy and charging rules.â€​",,,,

29. It clearly transpires from the aforesaid that:,,,,

i. A ‘Base Station’ is a fixed equipment in the Access part of a Cellular Network which communicates with the User Equipment i.e. Mobile,,,,

Phone/Cellular Phone. It receives and transmits radio waves to and from cellular telephones. Since the user mobile phone accesses the network by,,,,

communicating with the Base Stations by radio waves, this portion of the network is known as Radio Access Network. As a Base Station transmits",,,,

and receives radio waves to and from the user mobile phone, it is also referred to as Base Transceiver Station;",,,,

ii. A Cellular network is divided into Cells (Geographical areas) and each Base Station covers a Cell. If the user moves from one cell to another while,,,,

telephoning, the call is automatically transferred from one cell to another without interruption. Such automatic transfer of the call from the Base",,,,

Station in one cell to the Base Station in another cell, to which the user moves while telephoning, is referred to as “Handoverâ€​;",,,,

iii. Every Cellular Network, whether, it be 1G Network (First Generation Network), 2G (Second Generation Network), 3G Network (Third Generation",,,,

Network) or 4G Network (Fourth Generation Network), has to necessarily have a Base Station;",,,,

iv. HSN also describe ‘Base Stations’ for cellular networks as those which receive and transmit radio waves to and from cellular telephones,,,,

and each ‘Base Station’ covers a geographical area which is called a ‘cell’. It also states that if a user moves from one cell to another,,,,

while telephoning, the call is automatically transferred from one cell to another without interruption;",,,,

v. The essential requirement of ‘Base Stations’ contained in the Obligation of TEC, covers many variants, including eNodeB (LTE);",,,,

vi. 3GPP Standards mention that eNodeB and Home eNodeB are the ‘Base Stations’ in 4G LTE network which communicate with the User,,,,

Equipment;,,,,

vii. The two websites stated in paragraph 26 of this order also state that LTE access network is simply a network of ‘Base Stations’ which are,,,,

evolved NodeB (eNodeB); and,,,,

viii. The books referred to in paragraph 26 of this order also state that eNodeB is a Radio Base Station and that Base Stations such as eNodeB are,,,,

distributed throughout the network coverage area. Each eNodeB resides near the actual radio antennas.,,,,

30. It also needs to be noticed that the show cause notice that was issued to Reliance Jio, in paragraph 6.5, states that eNodeB is a LTE/4G",,,,

equipment which has built in functionality of Base Transceiver Station and Base Station Controller of a 2G wireless network or NodeB and Radio,,,,

Network Controller of a 3G wireless network and although it may be commercially referred to as a 'Base Station' of LTE network in the 4G Wireless,,,,

Network, its functionality is beyond that of the earlier Base Stations (Base Transceiver Stations of 2G Networks or NodeB of 3G Networks). The",,,,

show cause notice, therefore, proceeds on the footing that the classification of eNodeB should take into consideration the fact that it is a machine",,,,

performing functions of both the Base Transceiver Stations/eNodeB as well as that of the Base Station Controller/Radio Network Controller.,,,,

31. It further needs to be noted that the impugned order also accepts that the goods are ‘Base Stations’ especially in normal terminology and,,,,

that a plain reading of the term ‘Base Station’ would no doubt reveal that it should correctly be classifiable under CTH 8517 61 00, which is",,,,

meant specifically for ‘Base Stations’. This classification, however, has not been accepted in the impugned order solely for the reason that",,,,

when seen from the perspective of the technology involved in the goods which encompass certain other control features that go beyond the basic,,,,

functionalities of a Base Station, eNodeB should be classified under CTH 8517 62 90.",,,,

32. The aforesaid factors have to be kept in mind while considering the submissions advanced by the learned Counsel for Reliance Jio and the learned,,,,

Authorized Representatives appearing for the Department.,,,,

33. Every cellular network, whether it is 1G Network (First Generation Network), 2G Network (Second Generation Network), 3G Network (Third",,,,

Generation Network) or 4G Network (Fourth Generation network), must necessarily have a Base Station, as a Cellular Network cannot be without a",,,,

Base station. 4G Network, therefore, must also have a Base Station, and it has been contended on behalf of Reliance Jio that eNodeB is the Base",,,,

Station of 4G Network and would, accordingly, be classified as ‘Base Stations’ under the specific sub-heading for ‘Base Stations’ i.e.",,,,

8517 61 00. It is not the case of the Department that there is some other equipment, other than eNodeB, which is the Base station of 4G network and",,,,

indeed none has been pointed out during the course of hearing.,,,,

34. Learned Authorized Representatives appearing for the Department have, however, placed reliance upon the Instructions dated 07.06.2017, issued",,,,

by the Central Board of Excise and Customs regarding classification of eNodeB and have submitted that based on a careful consideration of all the,,,,

relevant factors, the Board had taken a conscious decision to classify eNodeB under CTH 8517 62 90.",,,,

35. It would, therefore, be appropriate to reproduce the said Instructions and they are as follows:",,,,

“INSTRUCTIONS DATED 07.06.2017,,,,

Subject: Classification of eNodeB-reg.,,,,

Board has received references regarding the classification of eNodeB which is an LTE equipment used in wireless or cellular networks. A,,,,

doubt has been expressed whether the said goods are classifiable under CTH 8517 6100 or CTH 8517 6290.,,,,

2. The Board examined the issue. In this regard it is clarified that eNodeB is an LTE/4G equipment which has built in functionality of Base,,,,

Transceiver Station (BTS) and Base Station Controller (BSC) of 2G wireless network or NodeB and Radio Network Controller (RNC) of 3G,,,,

wireless network. Although it may be commercially referred as 'Base Station' of LTE network, it’s functionality is beyond the earlier",,,,

Base Stations (Base Transceiver Station of 2G networks or NodeB of 3G networks). Therefore classification of eNodeB should take into,,,,

consideration the fact that it is a machine performing functions of both BTS/NodeB as well as BSC/RNC I.n the communication network,,,,

architecture BSC/ RNC controls and manages many BTS / Node B and it also provides intelligence to BTS/ NodeB. In fact BSC/RNC works,,,,

as a small switch within the network sub-system and it enables distributed architecture of eNodeB (i.e. Base Band Unit and Remote Radio,,,,

Heads).,,,,

3. In view of functions detailed above and by application of GIR 1 & 6, eNodeB fall into the description given under heading 8517 62 i.e.",,,,

Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing",,,,

apparatusâ€​ and rightly classifiable under heading 8517 62 90.â€​,,,,

(emphasis supplied),,,,

36. It would be seen that even the aforesaid Instructions issued by the Board accept that eNodeB is commercially referred to as ‘Base Station’,,,,

of LTE network but the reason why eNodeB has not been classified under CTH 8517 61 00 is that its functions go beyond the functions performed by,,,,

the earlier ‘Base Stations’ of 2G network or 3G network.,,,,

37. What is important to note is that the classification of a product has to be determined on the basis of the tariff entries and the Instructions issued by,,,,

the Board have also to be examined in the light of the tariff entries.,,,,

38. It is seen that eNodeB is an evolved Base station of 4G Technology, which does not have the drawback of the Base Stations of 2G and 3G",,,,

technology of having to communicate via a separate Controller owing to inability to communicate directly, which results in slowing down the speed of",,,,

the connection. In that sense, the Base Stations of 4G Technology (digital signals) are at par with the Base Stations of 1G Technology (analog signals)",,,,

in the sense that ‘Handover’ in both takes place at the Base Stations itself and not via a separate Controller.,,,,

39. This has also been explained in the 3GPP website http://www.3gpp.org/techno1ogies/keywords-acronyms/98-lte. It states that in 4G Technology,,,,

there is no separate Central Controller controlling the various Base Stations and the Base Stations have the necessary intelligence to communicate,,,,

directly as a result of which ‘Handover’ of calls takes place directly without the intervention of any Controller. This helps to speed-up the,,,,

connection set-up and reduce the time required for ‘Handover’. It has further been explained that for an end-user, the connection set-up time",,,,

for a real time session is crucial and that if the ‘Handover’ takes too long, the end-users tend to end the calls.",,,,

40. Merely because the Base Stations of 4G LTE have overcome the aforesaid drawback of the Base Stations of 2G and 3G technology, it cannot",,,,

mean that eNodeB is not a Base Station. It cannot, therefore, be said that ‘Base Stations’ of 4G technology cannot be called ‘Base",,,,

Stations’ because unlike Base Stations of 2G technology and 3G technology, it does not require a separate Controller. As noticed above,",,,,

historically the very first Base Station of 1G Technology also did not have a separate Controller and the requirement of a Controller in 2G technology,,,,

and 3G technology was perceived to be a drawback, as it slowed down the speed of connection. Thus, it cannot be urged that the Base Station of 4G",,,,

technology is not a Base Station and cannot be classified under CTH 8517 61 00, which is specifically for ‘Base Stations’.",,,,

41. The contention of the Department that the scope of CTH 8517 6100 must be restricted and confined only to be Base Stations of the earlier 2G,,,,

technology and 3G technology and that the said entry cannot cover an evolved Base Station of the new 4G technology cannot be accepted in view of,,,,

the decision of the Supreme Court in Collector of Customs & Central Ex. vs. Lekhraj Jessumal & Sons, 1996 (82) E.L.T. 162 (S.C.). The Supreme",,,,

Court held that a Tariff entry cannot be given a static interpretation ignoring the evolution in technology. The observations of the Supreme Court are,,,,

as follows:,,,,

“2. The respondent had imported miniaturised switches for use in electronic hearing aids which it manufactured. It appears that there,,,,

are two types of such switches, the conventional one then being wafer switches and the other, newly innovated, being reed switches. It was",,,,

the latter type of switch which was imported. The Customs authorities took the view that the respondents’ import licence did not cover,,,,

reed switches and they were not entitled to the concessional rate of import duty.,,,,

The stand of the Customs authorities was, ultimately, assailed in the writ petition filed by the respondent before the High Court. The Writ",,,,

petition was allowed. An appeal was preferred and it is the judgment in appeal which is under challenge before us.,,,,

3. The High Court in the impugned order noted that the stand of the Customs authorities was that the words “switches, miniaturised†as",,,,

component parts of hearing aids should be understood to mean only those types of switches which were generally used in the manufacture of,,,,

hearing aids at the time of publication of the Import Policy for the relevant year, namely 1977, and that these words could not be said to",,,,

include any other type of switch even if such other type of switch could be used in the manufacture of hearing aids. The Division Bench,,,,

observed, in our view, very rightly, that such an interpretation overlooked that industry was not static and that there was continuous",,,,

technical progress therein. New processes and new methods developed from time to time and new material and components or types of,,,,

components superseded others. It was unreasonable to give a static interpretation to words used in a tariff schedule ignoring the rapid,,,,

march of technology. Having regard to the technical opinion that reed switches would improve the performance of hearing aids, the High",,,,

Court held that reed switches were covered by the tariff entry. The High Court also noted that it was not the case of the Customs authorities,,,,

that the respondent was trying to divert the imported reed switches from the manufacture of hearing aids to another purpose.,,,,

4. We do not think that we can put it better. Progress cannot be stifled by an over-rigid interpretation of Import Policy or Customs Tariff.,,,,

Both must be read as they stand on the date of importation and whatever is reasonably covered thereby must be allowed to be imported,,,,

regardless of the fact that it was not in existence or even contemplated when the policy or tariff was formulated.â€​,,,,

(emphasis supplied),,,,

42. Learned Authorized Representatives also submitted, based on the Recommendations of TRAI, that since eNodeB hosts physical, medium access",,,,

control, radio link control and packet data control for user-plan header compression and encryption and performs many functions, including radio",,,,

resource management, admission and control, eNodeB cannot be classified as Base Station.",,,,

43. A perusal of the aforesaid Recommendations of TRAI, which have been reproduced in paragraph 28 of this order reveals that eNodeB interfaces",,,,

with the User Equipment. This is a function of a ‘Base Station’ and, therefore, eNodeB would be a Base Station of 4G LTE. The functions",,,,

which have thereafter been stated are infact the means by which the performance of the said function of interfacing with the User Equipment is,,,,

achieved. It is cannot, therefore, be said that eNodeB performs some functions which are other than those performed by ‘Base Stations’.",,,,

44. Learned Authorized Representatives appearing for the Department also submitted that between the two entries namely, CTH 8517 61 00 for",,,,

‘Base Stations’ and CTH 8517 62 90 for ‘Other’, it is the latter which is more specific and, therefore, the goods should be classified",,,,

under this Heading. The submission is that the two double (--) dash after the second single dash (-) are for ‘Base Stations’ and ‘machines for,,,,

the reception, conversion and transmission or regeneration of voice, images or other data, switching and routing apparatus’. Under the double dash",,,,

of 8517 62, there are eight triple dash entries and since eNodeB/LTE BTS is not specifically mentioned, it will fall in the last triple dash entry of",,,,

‘Other’.,,,,

45. Sub-heading 8517 61 00 is a double dash (--) description for ‘Base Stations’ and sub-heading 8517 62 is a double dash (--) description for,,,,

machines for the reception, conversion transmission or regeneration of voice, images or other data, including switching and routing apparatus"". Both",,,,

these double dash (--) descriptions appear under the single dash (-) description of ""Other apparatus for transmission or reception of voice, images or",,,,

other date, including apparatus for communication in a wired or wireless network (such as a local or wide area network)."" The said single dash (-)",,,,

description covers all transmission and reception apparatus other than Telephones. Under the said single dash (-) description, the transmission and",,,,

reception apparatus in the network (i.e. a Base Station) is specifically covered under double dash (--) sub-heading 8517 61 00. All other transmission,,,,

and reception apparatus i.e. other than ‘Base Stations’ are covered under double dash (--) sub-heading 8517 62. Sub-heading 8517 62 90 is a,,,,

triple dash (---) description for ""Other"" under the said double dash (--) sub-heading 8517 62 and is, therefore, a residuary sub-heading under the said",,,,

double dash (--) sub-heading 8517 62, which will cover transmission and reception apparatus other than ‘Base Stations’. Between the double",,,,

dash (--) description ""Base Stations"" in sub-heading 8517 61 00 and the triple dash (---) description ""Other"" in sub-heading 8517 62 90, it is the former",,,,

which is specific. Since eNodeB answers the said specific description of a Base Station, it can never be consigned to the said residuary sub-heading",,,,

CTH 8517 62 90 for ""Other"".",,,,

46. Learned Authorized Representatives appearing for the Department also submitted that not only was Reliance Jio prior to January 2016 classifying,,,,

eNodeB/LTE under CTH 8517 62 90, but even other importers have also been classifying eNodeB under the same sub-heading.",,,,

47. This contention advanced by the learned Authorized Representatives of the Department cannot be accepted as there can be no estoppel either,,,,

against the importer or against the Department in matters of classification and merely because Reliance Jio or other importers have claimed a,,,,

particular classification, it cannot be urged that a correct classification cannot be subsequently claimed.",,,,

48. This is what was observed by the Supreme Court in Dunlop India Ltd & Madras Rubber Factory Ltd. vs. Union of India and Others, 1983 (13)",,,,

E.L.T. 1566 (S.C.) and the observations are as follows:,,,,

40. At one stage Mr. Sanghi pointed out that in certain Bill of Entry of Dunlop India Limited, their Agents, Messrs Mackinnon, Mackenzie",,,,

& Co., Private Ltd., gave the I.C.T. Item No. 87 with regard to the imported V.P. Laitex. This, according to Mr. Sanghi, clearly shows how",,,,

the appellants themselves have understood the matter. There is, however, no estoppel in law against a party in a taxation matter. In order to",,,,

clear the goods for the Customs, the appellant Agents may have given the classification in accordance with the wishes of the authorities or",,,,

they may even be under some misapprehension. But when law allows them the right to ask for refund on a proper appraisement and which,,,,

they actually applied for, we do not attach any significance to this aspect of the matter pointed out by counsel. The question is of general",,,,

importance and must be decided on its merits.â€​,,,,

(emphasis supplied),,,,

49. The Gujarat High Court in McGAW â€" Ravindra Laboratories (India) Ltd. vs. Union of India, 1992 (60) E.L.T. 71 (Guj.) also pointed out that",,,,

though the importer and the Department had all along in the past proceeded on the footing that the goods were classifiable under a particular tariff,,,,

heading, the Department is not estopped from later contending that the goods were rightly classifiable under a different entry. The understanding or",,,,

conduct of the Department, even for a long period, cannot amount to estoppel against operation of a statute.",,,,

50. The Tribunal in Commissioner of Customs (Prev.), Jamnagar vs. Nayara Energy Ltd. 2019 (370) E.L.T. 1201 (Tri. Ahmd.) held that no estoppel",,,,

can be pleaded against law and that a mistake in claiming of classification in the past cannot become the sole basis for shutting out a plea for proper,,,,

classification of the product in future. The High Court, further held that matters of classification have to be decided with reference to the statutory",,,,

provisions and not merely on the basis of what the Department or assessee claimed or did in the past.,,,,

51. The Tribunal in Asian Granito India Ltd. vs. Commissioner of Customs, Mundra, 2021 (375) E.L.T. 597 (Tri. â€" Ahmd.) held that there is no",,,,

estoppel against law and irrespective of handful of imports by other importers or by the appellant itself under a particular heading, the correct",,,,

classification has to be arrived at in accordance with law.,,,,

52. It is, therefore, also not possible to accept the view expressed by the Board in the Instructions dated 07.06.2017.",,,,

53. The learned Authorized Representatives appearing for the Department also submitted that the Commissioner committed an illegality in granting the,,,,

benefit of the Notification dated 17.03.2012 to Reliance Jio since this Notification does not apply and infact it is the Notification dated 01.03.2005, as",,,,

amended by Notification dated 11.07.2014, that would apply.",,,,

54. A perusal of Serial No. 372 (i) of the Notification dated 17.03.2012 would show that it grants exemption from the whole of customs duty of goods,,,,

specified in List 17 required inter alia for cellular mobile telephone service. The said exemption is subject to condition no. 52, which requires that the",,,,

importer should be licensed by the Department of Telecommunications of the Government of India for providing cellular mobile telephone service.,,,,

There is no dispute that Reliance Jio satisfies condition no. 52. List 17 mentions ‘Base Transceiver Stations’ at Serial No. 3(a) and ‘Base,,,,

Station Controllers’ at Serial No. 1(b). The said Notification was amended on 01.03.2016, by which in Serial No. 372 an insertion was made to the",,,,

effect that notwithstanding anything contained in List 17, exemption shall not apply to specified goods of Heading 85.17, which, amongst others,",,,,

included Long Term Evolution Products. The very fact that it was only by the said amendment that the exemption was made inapplicable to LTE,,,,

products, shows that till 01.03.2016, if any imported goods answered description of items listed in List 17, the same were eligible to exemption even",,,,

though they may be LTE products. If the products contained in List 17 were not to cover the said product using LTE technology, there would have",,,,

been no necessity to bring the said amendment to make List 17 inapplicable to LTE products.,,,,

55. The Department has, however, contended that while Notification dated 01.03.2005 granted exemption to “All Goods†of heading 85.17 under",,,,

Serial No. 13, the same was amended by Notification dated 11.07.2014 by which LTE products were excluded from Notification dated 1.03.2005 and",,,,

simultaneously rate of duty for goods of CTH 8517 62 90 and 8517 69 90 was changed from Free to 10%. Thus, goods of the said two headings would",,,,

not be eligible for exemption under Serial No. 372 (i) of Notification dated 17.03.2012.,,,,

56. The contention advanced by the learned Authorized Representatives appearing for the Department cannot be accepted. The exemption granted,,,,

under the Notification dated 17.03.2012 is distinct from the exemption granted under the Notification dated 01.03.2005 as its grants exemption subject,,,,

to fulfillment of condition no. 52 only to importers licensed by the Department of Telecommunication of the Government of India for providing cellular,,,,

mobile telephone service. However, the exemption granted under the Notification dated 01.03.2005 was unconditional and available to all persons.",,,,

Thus, when the goods are covered by the plain terms of Serial No. 372(i) of the Notification dated 17.03.2012, the exemption cannot be denied by",,,,

reference to some other Notification or any amendment made therein.,,,,

57. The Commissioner, therefore, was justified in holding that the goods were eligible to exemption under Notification dated 17.03.2012.",,,,

58. Learned Authorized Representatives appearing for the Department have also contended that the Commissioner was not justified in holding that the,,,,

extended period of limitation contemplated under section 28(4) of the Customs Act could not have been invoked in the present case. In this connection,,,,

learned Authorized Representatives pointed out that that w.e.f. 08.04.2011 section 17 of the Customs Act was amended to provide for self-,,,,

assessment of duty by an importer and, therefore, if the importer had claimed exemption under a Notification with which the Department disagrees, it",,,,

would amount to mis-declaration.,,,,

59. Learned Counsel for Reliance Jio, however, pointed out that out of the 22 Bills of Entry which were finally assessed (Annexure II to the show",,,,

cause notice), 21 Bills of Entry pertain to the period 2014 to January 2017. As the show cause notice was issued on 19.07.2018, except for the last Bill",,,,

of Entry which is of 02.01.2017, all the other Bills of Entry pertain to the period prior to July 2016 and would be beyond the normal limitation period of",,,,

two years provided for in section 28(1) of the Customs Act. Learned Counsel submitted that the extended period of limitation contemplated under,,,,

section 28(4) of the Customs Act cannot be invoked as there was no collusion, wilful mis-statement or suppression of facts with intent to evade",,,,

payment of service tax. According to the learned Counsel, the goods had been correctly described in the Bills of Entry and claiming a particular",,,,

classification or claiming exemption under Notification is a matter of belief of the importer and the larger period of limitation cannot be invoked merely,,,,

because the classification/exemption is later disputed by the Department. Learned Counsel also pointed out that out of the 22 Bills of Entry which,,,,

were finally assessed, 13 Bills of Entry were assessed by the Officers and not the system and infact in 5 out of these 13 Bills of Entry, the final",,,,

assessment was done by the Officers after physical examination of the goods.,,,,

60. The submission advanced by the learned Authorized Representatives cannot be accepted. The assessment done by the importer under section,,,,

17(1) of the Customs Act is not conclusive but is subject to verification by the proper Officer under section 17(2) of the Central Act. If the proper,,,,

Officer finds that self-assessment is incorrect, the proper Officer has to re-assess the goods under section 17(4) of the Customs Act. There is nothing",,,,

on the record which may indicate that the proper Officer did not accept the self-assessment and carried out the re-assessment. Thus, also the benefit",,,,

of the extended period of limitation could not have been invoked.,,,,

61. The aforesaid discussion inevitably leads to the conclusion that the goods deserve to be classified under CTH 8517 61 00 as contended by,,,,

Reliance Jio and not under CTH 8517 62 90 as contended by the Department. The impugned order dated 14.06.2019 passed by the Commissioner,",,,,

therefore, to the extent it classifies the goods under CTH 8517 62 90 and consequential demand of differential duty w.e.f. 01.03.2016, cannot be",,,,

sustained and is set aside.,,,,

62. The result is that Customs Appeal No. 87665 of 2019 filed by Reliance Jio has to be allowed and Customs Appeal No. 87872 of 2019 filed by the,,,,

Department has to be dismissed. Accordingly, Customs Appeal No. 87665 of 2019 is allowed and Customs Appeal No. 87872 of 2019 is dismissed.",,,,

(Pronounced on October 06, 2021)",,,,