Importation Of Wireless Access Points Which Operate Solely On MIMO Technology Exempt From Customs Duty: Delhi High Court

Coming to the rescue of an IT distribution company, the Delhi High Court has held that the import of Wireless Access Points (WAPs), which operate on MIMO technology, are exempt from Customs duty.In doing so, the division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma held that the word “and” used between 'MIMO and LTE Products', which are eligible for exemption under the relevant notification issued by the Centre, is disjunctive.It thus rejected the Customs' contention that the exemption applies to products having both MIMO technology and LTE standards; not products operating on either MIMO or LTE standards.WAP is a networking device, MIMO is a technology and LTE is a standard.The Court observed, “If the intention of the Central Government was to include products utilizing either MIMO technology or LTE standard or both, the phrase 'MIMO or LTE Products could have been used. The use of the conjunction 'or' would have naturally encompassed all products with either of the two technologies/standards, and also those products which combine both. There would have been no need to use 'and' in place of 'or', as the latter would inherently fulfill the purpose of including all such categories.”Imported WAPs were classified under Customs Tariff Heading (CTH) 8517 which is exempted from the whole of customs duty, vide a 2005 notification of the Central government.It was the case of the Department that exclusion entry (iv) of Serial No. 13 in the 2005 Notification, which mentions “MIMO and LTE products”, should be interpreted to deny exemptions to all products operating on either MIMO or LTE standards.Additional Director General (Adjudication) however favoured the Assessee, observing that the language of the exclusion clause was clear and unambiguous, and the phrase “MIMO and LTE products” referred exclusively to products that used both the technologies together.After CESTAT also dismissed its appeal, the Customs approached the High Court.The High Court observed that the “phrase “MIMO and LTE Products” in Serial No. 13(iv) of the 2005 Notification applies solely to products combining MIMO technology and LTE standards, and thus, the WAPs imported by the respondent, which employ MIMO technology but not the LTE standards, are entitled to the exemption from Basic Customs Duty. It observed, “A closer examination of Serial No. 13 of the amended Notification No. 25/2005 reveals that wherever the Central Government intended to specify products individually, the terms such as “products”, “equipment” or the nomenclature of a specific product have been mentioned after the respective technology or feature. Therefore, every technology or feature is followed by words such as “equipment” or “product(s)”In this background, when entry (iv) of Serial No. 13 – which refers to “MIMO and LTE Products” – is examined, we note that there is a clear absence of word “products” after “MIMO”, as the same has been put after the word “LTE”. To put it differently, the word “products” has been put after the words “MIMO and LTE”, thereby indicating that “MIMO and LTE Products” includes those products which work on both MIMO technology and LTE standard.”Accordingly, the assessee was allowed to claim exemption and the appeal was dismissed.Appearance: Mr Akshay Amritanshu, Senior Standing Counsel with Mr Samyak Jain, Ms Drishti Safar and Ms Pragya Upadhyay, Advocates for Appellant; Mr Yogendra Aldak and Mr Kunal Kapoor, Advocates for RespondentCase title: Commissioner Of Customs Air Chennai-Vii Commissionerate v. M/S. Ingram Micro India Pvt. Ltd.Citation: 2025 LiveLaw (Del) 62Case no.: CUSAA 38/2023Click here to read order

Importation Of Wireless Access Points Which Operate Solely On MIMO Technology Exempt From Customs Duty: Delhi High Court

Kapil Dhyani

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