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TMI Blog2024 (8) TMI 1068X X X X Extracts X X X X X X X X Extracts X X X X ..... rough: Mr. V. Lakshmikumaran, Mr. Yogendra Aldak, Ms. Jyoti Pal, Mr. Kunal Kapoor and Ms. Anjali Singh, Advs. For the Respondents Through: Mr. Anurag Ojha, SSC along with Mr. Subham Kumar, Mr. Kumar Abhishek, Mr. Dipak Raj Singh and Mr. Varun Garg, Advs. ORDER 1. These appeals impugn two decisions handed down by the Customs Authority for Advanced Rulings [AAR] which had been petitioned by the appellant with the purpose of receiving an opinion with respect to the classification of three devices, namely Echo Dot (5th Gen), Echo Dot (5th Gen) with Clock and Echo Pop. The appellant calls upon us to render our opinion on whether the devices in question are classifiable under Customs Tariff Heading [CTH] 8517 62 90 and if our answer be in the negative, whether those devices would fall under CTH 8518. 2. The AAR, in terms of the order impugned dated 12 July 2023 has held Echo Dot (5th Gen) as well as Echo Dot (5th Gen) with Clock are liable to be placed under CTH 8518 22 10 of the First Schedule to the Customs Tariff Act, 1975 [CTA Act] . Similarly, it has found that Echo Pop is liable to be placed under the aforenoted CTH in the impugned order dated 27 September 2023. 3. Before us, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enting a combination of technologies enabling the holder thereof to replace multiple devices with one gadget or tool for the purposes of communication, information and entertainment. It would thus be wholly incorrect to view the subject devices as being simply speakers. xxxx xxxx xxxx 48. We also find merit in the submission of Mr. Lakshmikumaran who had drawn our attention to the decision rendered by the AAR, Mumbai who had while examining the question of classification of a similar device, namely the Apple HomePod correctly come to conclude that it was principally a convergence device. 49. While the precept of principal function is well settled, we deem it apposite to notice the decision of the Supreme Court in Commissioner of Central Excise, Delhi v. Carrier Aircon Ltd.15, where the question which arose was whether chillers were liable to be classified in the category of air conditioning machines merely because they were predominantly used in air conditioning plants. While answering in favour of the assessee, the Supreme Court observed as follows: 13. From the above, it is established that the primary function of the chiller is to refrigerate or chill water/liquid irrespective o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d other refrigerating or freezing equipment. Accordingly, the chillers in question shall fall under specific Heading 84.18 of the Tariff Act . This view is supported by the explanatory notes of HSN below Heading 84.15. HSN provides that: If presented as separate elements, the components of air conditioning machines are classified in accordance with the provisions of Note 2(a) to Section 16 (Headings 84.14, 84.18, 84.19, 84.21, 84.79, etc.) . Chillers manufactured by the respondent are cleared as separate elements and not as (sic part of) air conditioning machines, therefore, the same have to be classified under Tariff Entry 84.18 as refrigerating or freezing equipments as the basic function of the chillers is to chill the water or liquid. Chillers manufactured by the respondent cannot be classified under Heading 84.15 simply because 90% of the chillers manufactured by the respondent were being used in the commissioning of central air-conditioning plant. End use to which the product manufactured is put to, cannot determine the classification of the product when the product manufactured falls under a specific heading. 50. Closer to our case is the decision rendered by the Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter Note 5 (B), as it is to be used principally in ADPM, it is connectable to the central processing unit, and it is able to accept data in a form (codes or signals) which can be used by the system. Further, there would be no application of Chapter Note 5 (E) as correctly pointed out by the learned counsel for the appellants, as the multifunctional machines are presented independently. Moreover, since predominant components are relating to printing function, Chapter Note 5 (D) also becomes relevant which includes printers under Heading 84.71. We are also satisfied with the contention of the appellants that based on the nature of the functions they perform, the multifunctional machines would serve as input and output devices of an ADPM (computer) and thus serve as unit of an ADPM, which on a reading of Chapter Note 5 (C), clearly classifies them as falling under Sub-Heading 8471.60 of the Act. 18. We are not in agreement with the submission made by the learned Senior Counsel for the Revenue. The primary contention of the respondent is that no one function of the multifunctional machines, even printing, can be seen as predominant. This has clearly been shown to be incorrect on facts, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reception of voice, image or other data including apparatus used for communication in either a wired or wireless network environment. The appellant had sought to place the seven devices in question in Tariff Entry 8517 62 90 and which fell within the umbrella entry of machines for the reception, conversion and transmission or regeneration of voice, images or other data. The devices, as we have found above, clearly qualified and fell within the range of products which CTH 8517 covered. xxxx xxxx xxxx 47. 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. xxxx xxxx xxxx 55. As would be evident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peakers would for the purposes of the said notification be placed in the category of hearable devices . All that the said notification therefore purports to achieve is to include portable Bluetooth speakers in the category of hearable devices and that too for the purposes of extending the benefits of exemption in terms of that notification. The said notification thus cannot be viewed as a determination of the question of classification of devices which receive or transmit data, be it audio or visual, or those which are capable of analyzing data and having special attributes ascribed to the devices in question. It may be additionally noted that neither CTH 8518 nor 8528 employ the expression hearable devices . That expression formulated to describe a particular range of products is used only in the exemption notification. Thus, the mere inclusion of Bluetooth speakers under the heading of hearable devices also does not convince us to doubt the views expressed hereinabove. 7. It becomes pertinent to note that the decisions of the AAR which are impugned before us came to be pronounced prior to the judgment rendered by us in Amazon Wholesale India Private Limited. The AAR, thus clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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