Classification of electronic equipment under the Customs Tariff must be based on the primary functional utility and technical specifications of the goods, with multi-functional data transmission apparatus being classified more specifically by function rather than under general telephone set provisions.

(Arising out of Order-in-Original No.90/2023-24 AP & ACC dated 09.06.2023 passed by the Commissioner of Customs, Bengaluru)

This appeal is filed by the appellant M/s. IBM India Private Limited against Order-in-Original No. 90/2023-24 AP and ACC dated 09.06.2023 passed by the Principal Commissioner of Customs (Airport & Air Cargo Complex), Bengaluru.

2. Briefly the facts on record are that the appellant has been importing IP phones, networking equipment’s, transceivers, network interface modules etc. classifying the same under CTH 8517 1890, however the same has been challenged by the revenue and the Commissioner in the impugned order has reclassified the products under CTH 8517 6290, accordingly the benefit of the Notification No.24/2005-Cus dated 01.03.2005 read with Not. No.57/2017-Cus. dated 30.06.2017 has also been denied. Aggrieved by this order the appellant is in appeal before us.

3. The Learned Counsel submits that the allegations against the appellant relates to the classification of the following products imported by them at different ports and eligibility of concessional rate of duty under Not. No. 24/2005-Cus 01.03.2005; Not. No. 57/2017-Cus. dated 30.06.2017 vide Sl. No. 20, as amended by Not. No. 75/2018-Cus. dated 30.06.2017 and 2/2019–Cus. dated 29.01.2019.

3.1. At the outset it is stated that the doctrine of estoppel is not applicable in taxation laws and further the burden of classification is on the revenue which has not been discharged. Referring to the product description of VoIP Phones it is stated that it is like any other push-button telephone, except for the fact that VoIP Phones require a number of protocols to facilitate the delivery of voice communications over the internet and H.323 the impugned product is the most commonly used VoIP Protocol that supports VoIP functions, including bandwidth management and call control. IBM imported during the impugned period 4 types of Cisco IP Phones viz., and all of them have the same features like any other push-button telephone, except for the fact that they deliver voice communications over the internet. The Appellant also referred to the report dated 24.10.2017 issued by TRAI on the Regulatory Frame work on Internet Telephony where it is said that the end purpose of the telephone network is to provide universal communication service. When voice is transmitted over public internet it is termed as Internet Telephony. Similarly, when voice is transmitted over managed IP Networks, it is termed as voice over IO. Relying on the decision of the Hon’ble Tribunal in the case Ingram Micro Indian Pvt. Ltd. vs. Dy. CC., New Delhi – 2023 (383) ELT 204 (Tri. – Del.), in which the Hon’ble Tribunal held that “Thus for all the reasons stated above the product under consideration which is an executive IP phone (Model No. FON-6701) is classifiable under CTH 8517 18 10 and not under 8517 69 90”. It is therefore submitted that the classification of VoIP Phone and their eligibility to the exemption under the said Notification is no longer Res Integra.

3.2. With regard to Network Interface Modules / Cards / Wan Interface Cards, it is submitted that the