Commissioner Of Customs (Air), Chennai-Vii Commissionerate vs. M/S Compuage Infocom LTD.
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The Commissioner of Customs (Air), Chennai-VII Commissionerate (Appellant) filed an appeal against an order passed by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT). The CESTAT had upheld an order by the Directorate of Revenue Intelligence (DRI) which dropped a differential duty demand. The dispute concerned the interpretation of the phrase "Multiple Input/Multiple Output (MIMO) and Long Term Evolution (LTE) Products" in Notification No. 11/2014-Customs dated 11th July, 2014. The Appellant contended that the Respondent, M/s Compuage Infocom Ltd., had imported electronic goods (Wireless Access Points/MIMO products) and wrongly availed exemption under this notification. A differential duty demand of Rs. 3,54,42,995/- was raised for the period 11th July, 2014 to 30th June, 2017. The Order-in-Original dropped the demand, allowing the exemption, which was upheld by the CESTAT.
Held
The Court held that the phrase "MIMO and LTE Products" in Serial No. 13(iv) of the amended Notification No. 24/2005 must be read conjunctively. This means the exclusion clause applies only to products that combine both MIMO technology and LTE standards. The Court reasoned that the plain language of the entry, with 'and' placed between 'MIMO' and 'LTE' and followed by 'products', indicates a conjunctive reading. The subsequent amendment in 2021, which separated MIMO and LTE products, was considered clarificatory and applicable only from its effective date (02.02.2021), not affecting disputes prior to that. Therefore, Wireless Access Points (WAPs) imported by the respondent, which employed MIMO technology but not LTE standards, were entitled to the exemption from Basic Customs Duty. The appeal was dismissed, upholding the CESTAT's decision.
Key Issues
1. Whether the word 'and' in Serial No. 13(iv) of Notification No. 11/2014-Customs, specifically in the phrase "Multiple Input/Multiple Output (MIMO) and Long Term Evolution (LTE) Products", is to be read conjunctively or disjunctively, thereby determining whether the exemption applies to products with both MIMO and LTE technologies, or either of them. Petitioner's Argument: The Appellant (Commissioner of Customs) argued that the phrase "MIMO and LTE Products" should be interpreted conjunctively, meaning only products possessing both MIMO technology and LTE standards are excluded from the exemption. They relied on the grammatical structure and the subsequent amendment in 2021 which clarified the entry into separate categories, suggesting the original intent was conjunctive. Revenue's Argument: The Respondent (M/s Compuage Infocom Ltd.) argued, through the CESTAT's reference to prior judgments, that the word 'and' should be read disjunctively, encompassing products with MIMO technology, LTE standards, or both. They relied on the principle that in taxation, ambiguity should be interpreted in favour of the assessee, and that the amendment in 2021 was clarificatory, not retrospective.
Sections Cited
Section 130A, Section 174, Notification No. 11/2014-Customs, Notification No. 24/2005, Notification No. 5/2021-Cus, Notification No. 25/2005, Notification No. 57/2017-Customs
AI-generated summary — verify with the full judgment below
$~22 * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision: 21st March, 2025 +
CUSAA 56/2025 & CM APPLs. 16529/2025 & 16530/2025 COMMISSIONER OF CUSTOMS (AIR), CHENNAI-VII COMMISSIONERATE
.....Appellant Through: Mr. Akshay Amritanshu, Senior Standing Counsel CBIC with Ms Drishti Saraf, and Ms Pragya Upadhyay, Advs.
versus
M/S COMPUAGE INFOCOM LTD.
.....Respondent
Through: None.
CORAM:
JUSTICE PRATHIBA M. SINGH
JUSTICE RAJNEESH KUMAR GUPTA Prathiba M. Singh, J. (Oral)
This hearing has been done through hybrid mode.
The present appeal has been filed by the Appellant- Commissioner of Customs (Air), Chennai-VII Commissionerate under Section 130A of the Customs Act, 1962 read with Section 174 of the CGST Act, 2017 challenging the impugned order in Customs Appeal No. 51824/ 2021 dated 22th August, 2024 passed by Customs, Excise & Service Tax Appellate Tribunal (hereinafter ‘CESTAT’), New Delhi.
The said impugned order passed by the CESTAT upheld the Order-in- Original bearing no. 08/VKP(08) ADG (ADJ)/DRI/N.D/2019-20 passed by Directorate of Revenue Intelligence (hereinafter ‘DRI’).
The short issue that arises in the present petition is in respect of the interpretation of the word ‘and’ appearing in the clause (iv) of Serial No. 13 of Notification No. 11/2014-Customs dated 11th July, 2014, i.e., “Multiple Input/ Multiple Output (MIMO) and Long Term Evolution (LTE) Products”. CUSAA 56/2025
The CESTAT vide the impugned order has interpreted the said terms i.e., MIMO and LTE in conjunction and thereby, held that the subject goods would not be covered in the exclusion clause of the exemption notification.
The background of the case is that a Notification was issued bearing No. 24/2005 by the Customs Department dated 1st March, 2005 in which exemptions were granted for basic customs duty for products falling under Chapter Heading ‘8517’. The said entry reads as under:
This was thereafter amended on 11th July, 2014 vide Notification No. 11/2014 issued by the Ministry of Finance, Government of India. The amended Entry reads as under:
These notifications were further amended vide Notification No. 5/2021-Cus. The said notification reads as under:
The case of the Appellant is that the Respondent had imported electronic goods which it valued under Entry - CTH 85176290. According to the Department, the benefit of the Notification could not have been availed of by the Respondent.
Accordingly, a differential duty demand was raised vide Show Cause CUSAA 56/2025
Notice dated 27th November, 2018 for a sum of Rs. 3,54,42,995/- for the period 11th July, 2014 to 30th June, 2017. 10. The Order-in-Original was then passed on 17th December, 2019 vide which the Show Cause Notice dated 27th November, 2018 was dropped and the Respondents were allowed to claim exemption under the Notification No. 11/2014 dated 11th July 2014. 11. The Department had then challenged the said Order-in-Original dropping the proceedings under Show Cause Notice and allowing the exemption to the Respondents, before the CESTAT. The said appeal preferred by the Appellants was rejected by the CESTAT. The relevant portion of the order of CESTAT is set out below: “The department has filed this appeal to assail the order dated 17.12.2019 passed by the Additional Director General (Adjudication), Directorate of Revenue Intelligence, New Delhi allowing exemption from payment of basic customs duty and, therefore, dropping the demand raised in the show cause notice dated 27.11.2018. 2. M/s Compuage Infocom Ltd. is engaged in the business of distribution and trading of Information Trading products and peripherals. Respondent had imported “Wireless Access Points/MIMO products” falling under Customs Tariff Item 8517 62 90, by claiming benefit of Notification dated 01.03.2005, as amended by Notification dated 11.07.2014. The view of the department is that the MIMO products, whether or not incorporating LTE technology are not entitled for benefit of the said Notification. Consequently, a show cause notice dated 27.11.2018 was issued calling upon the respondent to re-classify the subject products under CTI 8517 62 90 and for denial of the benefit of the Notification dated 11.07.2014. 3. The Additional Director General passed a detailed CUSAA 56/2025
order dropping the proposals made in the show cause notice dated 27.11.2018. The department has filed this appeal to assail the aforesaid order dated 17.12.2019 passed by the Additional Director General.
It is submitted by Shri Nagendra Yadav, learned authorized representative appearing for the department as also Shri Gokulraj, learned counsel appearing for the respondent that the matter is covered by a decision of this Tribunal in Commissioner of Customs (Air), Chennai – VII versus Redington (India) Ltd. It is, however, also pointed out by the learned authorized representative for the department that the department has filed Customs Appeal No. 44 of 2024 before the Delhi High Court which is pending but no stay order has been granted.
Thus, in view of the decision of this Tribunal in Redington (India) Ltd., the present appeal filed by the department would have to be dismissed and is, accordingly, dismissed.”
The issue raised in this particular appeal now stands covered vide the decision of the Coordinate Bench Coordinate Bench in Commissioner of Customs (Air) Chennai -VII Commissionerate, Chennai v. Ingram Micro India Pvt. Ltd. in Customs Appeal No. 51093 of 2020, where the following issue was decided: “Whether the word “and” as appearing in CTI 8517 (iv) is to be read in a disjunctive manner and thus be viewed as referring to separate products?”
In the said appeal, the Court clearly came to the conclusion that the exemption applies to such devices which are both Multiple Input/Multiple Output (hereinafter, ‘MIMO’) and Long Term Evolution (hereinafter, ‘LTE’) products. The relevant paragraphs of the said judgment are extracted below:
“42. Thus, again, every technology or feature is CUSAA 56/2025
followed by words such as ‘products’ or a specific product such as ‘switch’.
It is clear from the aforesaid that the Central Government has appropriately and purposefully used terms such as ‘and’, ‘or’, ‘products’ and ‘equipment’, along with commas, to ensure precise and unambiguous categorization.
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.
The interpretation advanced by the Revenue is that the phrase “MIMO and LTE Products” includes three categories – (i) products using MIMO but not LTE, (ii) products using LTE but not MIMO, and (iii) products using both MIMO and LTE. In the written submissions filed on behalf of the Revenue, it has been asserted that the grammatically, the only possible way to fulfil this intention was to add the word ‘and‘ between ‘MIMO’ and ‘LTE’ and then suffix the term ‘products’ after ‘MIMO and LTE’ as the same would have the meaning of ‘MIMO product and LTE product’.
However, in our opinion, the aforesaid contention is unmerited. 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. To explain in simpler CUSAA 56/2025
terms, the phrase “MIMO or LTE Products” would mean – products having MIMO technology or products having LTE standard. A product having MIMO technology can have many other technologies, standards, etc., which may also include LTE standard. Similarly, a product having LTE standard can have many other technologies, standards, etc., which may also include MIMO technology. Thus, the phrase ‘MIMO or LTE Products’ would have included the categories of products, which the Revenue is projecting before this Court.
Moreover, in earlier entries of the same notification, such as Serial No. 13 (ii) and (iii), the word ‘or’ has been used wherever appropriate to denote alternatives. Similarly, commas have also been employed to demarcate distinct categories of products. Had the intention been to use ‘and’ in a disjunctive manner in entry (iv) of Serial No. 13, the phraseology could also have been easily drafted as follows: ‘MIMO Products and LTE Products’, or ‘MIMO Products and/or LTE Products’, or ‘MIMO Products or LTE Products’. These products could also have been separated by use of commas, such as by drafting the same as ‘MIMO Products, LTE Products’ or ‘MIMO Products, and LTE Products‟. However, the same has not been done in the exclusion entry in question.
As noted in the preceding discussion, MIMO is a technology and LTE is a standard. Concededly, the case of Revenue is that “MIMO and LTE Products”, inter alia, includes “products which work on LTE standard and have MIMO technology”. Thus, it is not disputed that there exist products which embody both MIMO technology and LTE standard. xxxx
Further, the term “and” is a conjunction, commonly understood to connect and join words, clauses, or phrases. Dictionaries and linguistic principles affirm that “and” denotes addition or combination, unless CUSAA 56/2025
there is ambiguity or absurdity arising from its literal interpretation.
In this regard, it would be relevant to take note of the following passage from G.P. Singh‟s Principles of Statutory Interpretation (15th Edn.): “The word “or” is normally disjunctive and “and” is normally disjunctive but at times they are read as vice versa to give effect to the manifest intention of the Legislature”
In the present case, there is no such ambiguity or absurdity. In our view, when all the four entries of Serial No. 13 are analysed, it would lead to only one
conclusion that the word “and” is to be read in conjunctive manner only, and the phrase “MIMO and LTE Products” would refer to only those products which have both MIMO technology and LTE standard.
As far as the argument of the Revenue that in the year 2021, the Notification No. 25/2005, and one Notification No. 57/2017-Customs were amended and the phrase “MIMO and LTE Products” were substituted with (i) MIMO products; (ii) LTE products’, and that these amendments were clarificatory in nature, is concerned, notably, an amendment in the Notification No. 57/2017-Customs was brought vide Finance Act, 2021 which is clarificatory in nature, and, clarifies Serial No. 20 of the said notification. It states that the subject entry will now be read as (i) MIMO products; (ii) LTE products. Similar change was brought in Notification No. 25/2005 by virtue of Notification No. 05/2021-Customs.
Thus it is clear that the aforesaid amended entries in the concerned Notifications, in their clarificatory form, will be applicable only from the date of coming into force of these amendments i.e. 02.02.2021. As a natural consequence, the cases, which are in dispute qua the exclusion entry in question, which are pending adjudication or were adjudicated prior to the amendment brought about by clarifications, will be CUSAA 56/2025
amenable to interpretation and adjudication as it stood prior to the aforesaid clarification and amendment.
It would, therefore, mean that in cases involving disputes over interpretation of the subject entry, the amendment brought about through later clarification cannot put fetters on the powers of the Courts or adjudicating authorities, dealing with disputes prior to the amendment so as to have a binding effect on such authorities or on the Courts to hold as correct the clarification as the guiding principle to decide the entry which stood prior to such amendment in its original form.
We are of the view that the clarification is brought about in the Statute when there is ambiguity and disputes arise due to such ambiguities. The fact that a clarification is needed to be brought about in the subject entry by the Finance Act, 2021 would point out towards the inherent ambiguity experienced in its interpretation and application which prompted and necessitated the subject amendment and clarification. In the light of this observation and the facts of the present case as well as the judicial precedents in similarly situated cases, we are of the opinion that exclusion clause (iv) of Serial No. 13 of the amended Notification No. 24/2005, which reads as ‘MIMO and LTE products’, would have to be read in its original form applying the law and rules of interpretation of statutes, especially as applicable in cases of taxation.
While adjudicating cases of disputes over an entry attracting or not attracting customs duty, the first and foremost rule to be followed is reading it as it stands by giving it the meaning that can be understood by reading the plain language of the entry in question.
Coming back to the facts of the case and applying the above principle, we note that the word ‘and’ is suffixed with the word ‘MIMO’ and prefixed with the word ‘LTE’ and there is no punctuation mark or comma after the word ‘MIMO’ and before the word ‘and’. CUSAA 56/2025
Further, ‘MIMO and LTE’ are followed by the word ‘products’. Therefore, as a common rule of English language, the word ‘and’ would clearly, and in unambiguous terms, be read conjunctively.
To reiterate, the amendments as discussed above were introduced in the year 2021, whereby “MIMO and LTE products” were changed to “(i) MIMO products; (ii) LTE products”. The word ‘and’ has been totally taken out from the new entry and the same is absent from the entry altogether. The absence of word ‘and’ between the word ‘MIMO’ and ‘LTE’, as it existed prior to the amendment brought as clarification, rather speaks and explains by its absence, about the presence of intention to read ‘MIMO’ and ‘LTE’ as conjunctive and not disjunctive.
In light of the above, we hold that the phrase “MIMO and LTE Products” in Serial No. 13(iv) of the amended Notification No. 24/2005 applies solely to products combining MIMO technology and LTE standards. The exclusion clause cannot be stretched to encompass products featuring either one of the two technologies. Accordingly, the WAPs imported by the respondent, which employ MIMO technology but not the LTE standards, are entitled to the exemption from Basic Customs Duty. ”
Since the question of law stands decided, no further questions of law would arise in this appeal. The present case would also be covered by the two judgments in CUSAA 44/2024 titled Commissioner of Customs (AIR), Chennai-VII Commissionerate v. M/s Redington (India) Limited and Commissioner of Customs AIR Chennai-VII Commissionerate v. M/s. Ingram Micro India Pvt. Ltd in Customs Appeal No. 51093 of 2020 as held by CESTAT.
Appeal is, accordingly, dismissed in terms of the above two CUSAA 56/2025
judgements. All pending applications, if any, are also disposed of.
PRATHIBA M. SINGH JUDGE
RAJNEESH KUMAR GUPTA JUDGE MARCH 21, 2025 Rahul/ck
Reproduced from the public record of the Delhi High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.