2023 (12) TMI 757 - HC - Customs

Classification of imported goods - Echo Family Devices - classifiable under CTH 8517 and more particularly Tariff Entry 8517 62 90 thereof or under CTH 8518? - HELD THAT - A similar question arose for the consideration of the Supreme Court in Commissioner of Customs Central Excise and Service Tax Hyderabad vs. Ashwani Homeo Pharmacy 2023 (5) TMI 191 - SUPREME COURT . In this case also the manufacturer had asserted that notwithstanding the product being styled as a hair oil it was liable to be classified as a medicament where it was held that substance of the matter remains that in common parlance the product in question would be approached essentially for its claimed medicinal qualities and not as another hair oil. It is thus evident from the aforenoted principles as enunciated by the Supreme Court that the mere description of the product as a hair oil or shampoo would not be conclusive for the purposes of classification under the CTH. The decisions in Sarvotham Care 2015 (8) TMI 250 - SUPREME COURT and Ashwani Homeo 2023 (5) TMI 191 - SUPREME COURT thus clearly explain the legal position to be that nomenclature alone would not constitute a defining basis for the purposes of answering a question of classification. When the aforesaid principles are applied to the facts at hand it becomes clear that merely because the appellant or others had chosen to describe the products as smart speakers the same could have neither been accepted as being conclusive of the issue that arose nor could the description of the products detracted from the right of the appellant to urge the AAR to examine the issue of classification by applying the dominant function test. The tests evolved by courts in connection with the issue of classification such as nomenclature common parlance principal function primary and incidental purpose are all aids and rules of guidance liable to be cumulatively borne in consideration in order to ascertain the true character of a product. While none of those tests are accorded preeminence it is ultimately for the authorities to ascertain which of those rules would merit adoption and represent an accurate understanding of the nature of the product. As is evident from the explanation of the unique features of the products in question they were principally designed to act as mediums for reception and transmission of data and could additionally and as an aside also be used as a speaker. However since these were essentially reception and transmission devices which could analyze data and perform the varied functions noticed above they were rightly described by the appellant as being communication devices and thus answering the requirement of machines for the reception conversion and transmission or regeneration of voice images or other data as contemplated under Tariff Entry 8517 62 90. The impugned devices perform a host of functions including reception conversion and transmission of voice or other data to produce the requisite final output warranting their classification under CTH 8517 - merely because these devices could if so chosen by the user also be used as mere speakers the same would not justify us recognising their primordial attribute to be that of a speaker alone. The eleven devices are correctly classifiable under CTH 8517 and more particularly under Tariff Entry 8517 62 90. Echo Show 5 Echo Dot 4th Generation and Echo Dot 4th Generation with Clock are held eligible to claim exemptions in accordance with SI. No. 20 of the Notification dated 30 June 2017 as amended vide Notification dated 01 February 2021 - the impugned order set aside.