AUTHORITY FOR ADVANCE RULINGS

              (CENTRAL EXCISE, CUSTOMS & SERVICE TAX)

NEW DELHI

PRESENT

       Thursday, the twenty fourth November Two Thousand Five

         Ruling Nos. AAR/25(Cus)/2005
In
 Application No.AAR/44(Cus)/37/2005

R U L I N G

(Hon'ble Mr. Justice Syed Shah Mohammed Quadri)

In this application under section 28H of the Customs Act, 1962 (for short "the Act"), M/s. Alcatel India Limited, a wholly owned subsidiary of Alcatel, France, proposes to import into India the latest technology equipment of Optical Networking/GSM equipment etc.  To ascertain its customs duty liability in regard to the hardware and optical fibre cables for submarine telecommunications systems, it seeks advance ruling of the Authority on the following question:

"Whether the Alcatel 1678 Metro Core Connect proposed to be imported into India, is classifiable under Heading No. 8517 5099 of the First Schedule of the Customs Tariff Act, 1975."   

            The Alcatel 1678 Metro Core Connect (for short "the goods") is a hybrid of optical, electronic and mechanical systems that forms part of a telecommunication system for use in transmission of aggregate data.  The goods are intelligent transmission optical multi-band node (ION) with an unique density of 4096 STM1 equivalent/640G within one single shelf.  Because of the innovative architecture, both network applications of SDH/SONET are supported: broadband (VC-4nc/VC-4 or VC3nc/VC3) and wideband (VC3/12 or VT2/VT.15) with modular building blocks.   Intelligent optical networks are supported, with Gigabit Ethernet, ASON/GMPLS and flexible, transparent OTN (G.709) switch. It integrates L2 Ethernet and MPLS functionalities as well.  All kind of broadband (STM-1/4/16/64, GE, 10GE), wideband (E1, E3, STM1, E/FE) and Optical G. 709 (OTM1, OTM2, colored) interfaces are integrated with a family concept to support traditional TDM, data aware, long haul SAN and Transparent services. The goods can operate in any mesh, ring, restoration or hub and spoke telecommunication topology, because of their superior blocking free cross-connect architecture.   It is submitted that in accordance with Rule 1 of the General Rules for the Interpretation of the First Schedule to the Customs Tariff Act 1975 (for short "the Rules") the said goods are classifiable under Tariff heading 8517;  in accordance with Rule 6, these goods will fall under sub-heading 8517 50 and that the appropriate tariff heading is 8517 50 99.  It is added that the U.K. and Australia have classified the said goods under tariff heading 8517 50. 

2.         In his comments the Commissioner of Customs states as follows:

"Comments: On the basis of description of goods given in annexure II and General characteristics given in Technical documents, it appears that the party's contention that in accordance with Rule 1 of the general Rule of interpretation, these goods are classified under tariff heading 8517 electrical apparatus for line telephony or line telegraphy, including line telephone sets with cordless handsets and telecommunication apparatus for carrier - current line system or for digital line system; videophones: is correct. 

Conclusion: In view of above, proposed classification of item under tariff heading 8517 5099 may be accepted."

3.      It is evident that the proposed classification by the applicant is accepted by the Commissioner of Customs.  

4.      Tariff heading 8517 , the relevant sub-heading and the tariff items read as follows:

TARIFF HEADING 8517

Heading 8517 deals with electrical apparatus for line telephony or line telegraphy including line telephone sets with cordless hands-sets and telecommunication apparatus for carrier-current line systems or for digital line systems.

SUB-HEADING AND TARIFF ITEMS
 

On a  combined reading of Rules 1 and 6 of the  Rules and the terms of the heading, sub-heading and tariff items, having regard to the description of the goods, specified above, we rule that Alcatel 1678 Metro Core Connect  is classifiable under tariff item  8517 50 99.

                                    Pronounced in the open Court on this 24th day of November, 2005.