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TMI Blog2021 (8) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... be divided into two categories, namely (i) car infotainment systems embedded with Bluetooth module and (ii) car infotainment systems not embedded with Bluetooth module. The appellant, inter alia, imports Bluetooth module for use in the manufacture of car infotainment systems embedded with Bluetooth module. 3. The issue involved in this appeal concerns import of a Bluetooth module through Bill of Entry dated 17.01.2017 bearing description 'Bluetooth EDR module [Model No. NF2301-16M] (135312-09400880A0Z)(WPC LIC NO. 593 dated 15/05/15) (Parts of car audio)' from Fujitsu Ten Singapore Pvt. Ltd. 4. According, to the appellant the said Bluetooth module is a multi-chip system for multimedia Bluetooth applications comprising radio (Bluetooth Processor), baseband, flash memory, DSPs, which work together to achieve a fully compliant Bluetooth system. In case products like laptop, mobile phone, infotainment systems are required to be connected to each other through Bluetooth technology, a Bluetooth module has to be present in it. 5. The functioning of Bluetooth module has also been described. It has been stated that for instance in a case whether two devices are mobile phone and car infot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r noticing the basic function of Bluetooth module and the usage of Bluetooth, concluded that Bluetooth module cannot be termed as a "part". The Assistant Commissioner also found that Bluetooth module can be termed as an apparatus/machine. Ultimately, the Assistant Commissioner observed that since Bluetooth module is principally used in car infotainment system, it will merit classification under CTH 8529 90 90. The relevant portion of the order dated 23.02.2017 of the Assistant Commissioner is reproduced below: "The issue to be decided in the classification of "Bluetooth Module" which the said Importer has claimed under CTH 85176290. The basic question to be decided is the independent status of Bluetooth Module, if it is a part, an apparatus, a machine or an accessory. The basic function of Bluetooth is to enable exchange of data between two Bluetooth enabled device within a wired or wireless network. It's application can be used for the following devices (a) Printer (b) Computers (c) Hard Drive (d) Keyboard/Mouse (e) Speaker (f) Compact Disc (g) Digital Camera (h) Global Positioning System (i) Clock Radio (j) Video Monitors/Televisions (k) Video game Machines. As Bluetooth in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2008 (224) ELT 512 (SC). In view of the foregoing discussions, it is apparent that Bluetooth Module cannot be termed as part of car Infotainment systems. It can be termed as an apparatus or machine. As the apparatus/machine do not specifically fall under any chapter heading, it will attract can be safely classification under CTH 8543, which states that "Electric Machine and apparatus having individual functions, not specified or included elsewhere in the chapter" and CTH 85437099 is more akin to its classification. Further, as per note 2(b) of chapter note under section XVI, wherein it states that "other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machine of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machine of that kind. Since Bluetooth Module is principally used in car infotainment system, as declared by the Importer, it will merit classification under CTH 85299090." (emphasis supplied) 10. The Commissioner (Appeals), as can be seen from the order itself, merely reproduced parts of the order passed by the Assistant Commissioner and dismissed the appeal after uphol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2013 quoted by the Importer in support of their defense, do not squarely cover Bluetooth Module. That circular settles the classification of Bluetooth wireless. 5.4 In view of the foregoing discussions, it is apparent that Bluetooth Module cannot be termed as part of car Infotainment systems. It can be termed as an apparatus or machine. As the apparatus/machine do not specifically fall under any chapter heading, it will attract its classification under CTH 8543, which states that "Electric Machine and apparatus having individual functions, not specified or included elsewhere in the chapter" and CTH 85437099 is more akin to its classification. Further, as per note 2(b) of chapter note under section XVI, wherein it states that "other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machine of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machine of that kind. Since Bluetooth Module is principally used in car infotainment system, as declared by the Importer, it will merit classification under CTH 85299090." (emphasis supplied) 11. Shri B.L. Narasimhan, learned counsel appearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applied and one cannot, therefore, directly jump to Section Note 2(b) without exhausting the possibility of Section Note 2(a). In this connection, reliance has been placed on the decision of the Supreme Court in Collector of Central Excise vs. Delton Cables Ltd. [2005 (181) E.L.T. 373 (S.C.)]; and (vi) An order has to be sustained on the basis of the findings given thereunder and not on what could be the intention of the person passing the order. In this connection, reliance has been placed on the judgment of the Supreme Court in Mohindhr Singh Gill and another vs. Chief Election Commissioner, New Delhi and Others [(1978) 1 SCC 405]. 12. Shri Rakesh Kumar, learned Authorized Representative of the Department, supported the impugned order and made the following submissions: (i) Where the subject goods are principally (primarily/ mainly/chiefly) used with the apparatus/machines of Headings 8525 to 8528, the same shall be classified under Heading 8529. The subject goods may not be an integral part, but can be a part principally used for the apparatus of Heading 8525 to 8528 to enhance its outcome; (ii) Chapter Heading 8517 essentially talks about telephone/telecommunication bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ystems. However, the Department has sought to classify it under CTH 8529 90 90 as it would be a 'part' principally used for the apparatus of Headings 8525 to 8528 to enhance its outcome. 15. To appreciate the contentions advanced on behalf of the parties, it would be appropriate to reproduce the relevant portions of Chapter 85 and they are as follows: Chapter 85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles 8517 Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528. ******** ********** -- Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isc, digital camera etc., and all these devices can work independently without Bluetooth module, the Commissioner (Appeals) still accepted the contention of the Department that it would be classifiable under CTH 8529 90 90 on the basis of Section Note 2(b) for the reason that Bluetooth module is principally used with car infotainment system. 18. There is no challenge by the Department to the finding recorded by the Commissioner (Appeals) that Bluetooth module is not a 'part' of car infotainment systems as the Department has not filed any cross-appeal. It is, therefore, not possible to accept the contention of the learned Authorized Representative of the Department that despite a specific finding having been recorded by the Commissioner (Appeals) that the Bluetooth module is not a 'part', of car infotainment systems, it should still be considered as a 'part' because of the description given by the appellant in the Bill of Entry. 19. Chapter Note 2 deals with classification of parts of machines and it is reproduced below: SECTION XVI "Notes: 1. xxxxxxx 2. Subject to Note 1 to this Section, Note 1 to Chapter 84 and to Note 1 to Chapter 85, parts of machines (not being parts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hindhr Singh Gill. 23. Once Bluetooth module is classified under CTH 8517 62 90, it would not be necessary to examine the contention advanced by the learned counsel for the appellant that even if Bluetooth module is considered to be a 'part' of car infotainment systems, it would still merit classification under CTH 8517 62 90. 24. Learned Authorized Representative of the Department has placed reliance upon the judgment of the Supreme Court in Westinghouse. This judgment is regarding classification of 'parts' whereas, as noticed above, the Bluetooth module cannot be considered as a 'part'. Even otherwise, the dispute in Westinghouse was regarding two Chapters, namely Chapter 85 and 86. In the present appeal the dispute is between two Headings of the same Chapter and not between two Chapters. The judgment is also in connection with Section Note 2 to Section XVII, which covers Chapter 86. Section Note 2 to Section XVI and Section Note 2 to Section XVII are different. 25. Before concluding, it is necessary to take note of the order passed by the Commissioner (Appeals). It can clearly be seen from his order dated 23.05.2019 that he has at many places merely reproduced the order pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VI of the customs tariff, Wherein it states that "other parts if suitable for use "other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of heading 8517 and 8525 to 8528 are to be classified in heading 8517", are to be classified in heading 8517. As Bluetooth Module does not come under the gambit of parts and duly acknowledged by the importer and they have supported this argument by citing the judgment of Commissioner of Central Excise Delhi Versus Insulation Electrical Private Limited, 2008 (224) ELT 512 (SC). I find that Bluetooth Module will attract classification under 85176290 in view of the chapter note 2 (b) to annexed to section XVI of the customs tarill, Wherein it states that "other parts if suitable for use "other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied with the machine of that kind. Since Bluetooth Module is principally used in car infotainment system, as declared by the Importer, it will merit classification under CTH 85299090. 26. As an appellate authority, the Commissioner (Appeals) should have considered the factual and legal aspects and then arrived at a decision but it clearly transpires that the Commissioner (Appeals) simply reproduced the findings of the Assistant Commissioner. 27. The observations made by the Commissioner (Appeals) at serial no. 3 in the aforesaid chart are also disturbing. While the Assistant Commissioner noted the submission advanced by the appellant that Bluetooth module will attract classification under 8517 62 90, the Commissioner (Appeals) recorded a finding that the Bluetooth module will attract classification under 8517 62 90, little realizing that this was infact the classification sought by the appellant. Even otherwise, this portion of the order passed by the Assistant Commissioner has many mistakes, but the Commissioner (Appeals) has reproduced the mistakes also. 28. In view of the aforesaid discussion, Bluetooth module deserves classification under CTH 8517 62 90 as contended by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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