R. Bhagya Devi ORDER
R. Bhagya Devi, Member (T)
1. The respondent M/s. Larsen and Toubro Ltd. imported G-24 PL 001 GSM Chipset Wavecom (modem) vide Bill of Entry No.2120004 dated 02.09.2009, classifying them under chapter Heading 8517 6230. The supplier invoices described the imported goods as "electronic components for metering production system", and on examination, officers found that the goods imported were a chipset mounted on printed circuit board and as per the Technical Write-up, the circuit boards were wireless CPU-a powerful programmable processor. Based on the above description and with reference to HSN Explanatory Notes, the items were classified under Chapter Heading 8537 1000 by the Original Authority as against the classification claimed by the respondent under Chapter Heading 8517 6230. On an appeal before the Commissioner (A), the Commissioner (Appeals) based on the catalogue produced before him found that the wireless CPU wavecom includes ARM microprocessors that can process data, listen to more than 50 peripheral devices, address complex display driver interfaces, etc; thus describes the modem to be a powerful programmable processor which can also connect to cellular networks anywhere in the world. Thus, classified the same under Chapter Heading 8517 as claimed by the respondent. The Department is in appeal against the above impugned order.
2. The matter came up for hearing today and the learned Authorised Representative on behalf of the Revenue submitted that the item imported is a programmable processor mounted on a printed circuit board and based on this description, the goods were rightly classified under Chapter Heading 8537 by the Original Authority. It is submitted that the classification should be based on the description and function of an item as it is imported and not based on the end-use of the same. The Commissioner (Appeals) classified the items based on the end-use that they were used in the manufacture of modem which is inappropriate; hence, the impugned order needs to be set aside.
3. The learned counsel on behalf of the respondent submits that Chapter Heading 8537 merely consists of Boards, panels for electric control and distribution of electricity and items imported by them is nowhere connected to this description. It is their claim that the goods are rightly classifiable under Chapter Heading 8517 as the goods are used for transferring the data from the electric metre to the control unit and to be treated as networking equipment and these items are used in the manufacture of modems which are classifiable under Chapter Heading 8517. Thus, requests to dismiss the revenue appeal.
4. Heard both sides. There is no dispute that the items imported are a programmable processor mounted on a printed circuit board. The Commissioner (Appeals)'s classification under Chapter Heading 8517 is misplaced in as much as this Chapter includes Telephone sets, smartphones and other telephones for cellular networks or for other wireless networks; other apparatus or 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 8443, 8525, 8527 or 8528. He further observed that based on the flowchart produced by the respondent, the imported item is a component to be used in the manufacturing of a modem and any part which goes into the manufacture of the same, needs to be classified under Chapter Heading 8517. It is a settled fact that the principles of classification endorses that any classification should be based on the description and function of an item as it is imported and not based on its end-use as held by the Supreme Court in number of cases. In the case of Commissioner of Central Excise, Delhi Versus Carrier Aircon Ltd. MANU/SC/2923/2006 : 2006 (199) E.L.T. 577 (S.C.) decided on 5-7-2006 the Hon'ble Supreme Court held that:
"15. End use to which the product is put to by itself cannot be determi........