Customs Duty Exemption On Imported WAP: CESTAT

The two-member bench of Justice Dilip Kumar (President) and P.V. Subba Rao (Technical Member) has observed that imported WAP is a networking equipment working on LAN, connecting Wi-fi enabled devices such as laptops, smartphones, tablets, etc. to a wired network.

The appellant/Commissioner of Customs has assailed the order passed by the Additional Director General. The Additional Director General held that Wireless Access Points imported by the respondent/assessee would be classifiable under Customs Tariff Item 85176290 and, accordingly, would be entitled to exemption from Basic Customs Duty. The demand for customs duty has dropped.

The respondent is a distributor of information technology products. It imported WAP from various suppliers for trading purposes in India, and it classified the imported WAP under CTI 8517 62 90 during the period from 11.07.2014 to 30.06.2017. According to the appellant, WAP works on Multiple Input/Multiple Output technology but does not support the Long Term Evolution standard.

A WAP is a networking device used for wireless communication within a local area network. It helps in connecting wireless-enabled devices such as laptops, smartphones, tablets, etc., to a wired network.

The department contended that TRAI, in its recommendations on Telecom Equipment Manufacturing Policy dated 12.04.2011, had regarded Wi-Fi WAP as a broad band equipment under the category of telecom equipment. The notification dated October 5, 2012, issued by the Department of Telecommunications, following the policy of preferential treatment to indigenous manufacturers in government purchases, has categorised WAP as' Wi-Fi based broadband wireless access systems'. The amendment made by the notification has taken out specified telecom products for increasing the BCD to 10%, and this includes Wi-Fi based WAP.

The assessee contended that the basic customs duty on specified telecommunication products not covered under the Information Technology Agreement is being increased from NIL to 10%. As WAP is an information technology product and is specifically covered under the Information Technology Agreement as network equipment in Attachment B, the intention is clearly not to exclude WAP imported by the assessee.

The CESTAT held that the WAP imported by the appellant works on technology and does not support the LTE standard. The assessee was justified in claiming exemption from the whole of the customs duty.

Case Title: Commissioner of Customs (Air) Chennai – VII Commissionerate Versus M/s. Ingram Micro India Pvt. Ltd.

Citation: Customs Appeal No. 51093 Of 2020

Date: 12.09.2022

Counsel For Appellant: P.R.V. Ramanan

Counsel For Respondent: T. Vishwanathan

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