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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 ..... 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 undisputed that while dealing with similar products and which had been broadly placed in the category of "Echo Family Devices", we had on a previous occasion been called upon examine the issue of classification in our decision in Amazon Wholesale India Private Limited vs. Customs Authority for Advance Rulings, New Delhi & Anr. 2023 SCC OnLine Del 7817. 4. Upon consideration of the rival submissions which were addressed on that appeal, we had recognized the principal attributes of the Echo Family Devices making them liable to be acknowledged as "convergence devices" as opposed to a mere speaker or other audio devices of a like character. This becomes evident from the following observations that came to be rendered by us in the aforenoted judgment:- "40. However, of significant import was No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 of the industrial or other application which the chilled water is put to. Air-conditioning system is just one amongst the various industrial applications in relation to which chillers are used. Only because 90% of the chillers manufactured by the respondent are used in the air-conditioning systems cannot be the basis for classification of the chillers as parts of air-conditioning system classifiable under Heading 84.15. 14. End use to which the product is put to by itself cannot be determinative of the classification of the product. See Indian Aluminium Cables Ltd. v. Union of India [(1985) 3 SCC 284 : 1985 SCC (Tax) 383]. There are a number of factors which have to be taken into consideration for determining the classification of a product. For the purposes of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Court in Xerox India Limited v. Commissioner of Customs, Mumbai and where the question of multifunctional machines and their classification arose for consideration. The products in that case were capable of being used as a printer, fax machine, copier as well as a scanner. The Department in that case sought to place those machines under Tariff Entry 8479 89, being the residual entry as opposed to the assessee which claimed the product to be a part of CTH 8471-Automatic Data Processing Machines. While answering the question as posited in favour of the appellant/assessee, the Supreme Court observed thus:- "15. In order to determine the classification of the multifunctional machines, it is necessary to look into some relevant provisions. Rule 3 (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, and in the light of the submissions by the appellants, there has been no case made out for classification of the goods under the residuary Sub-Heading 8479.89. We may also notice that the Tribunal, while considering the decision on which reliance was placed by the learned counsel appearing for the appellants, has stated that those decisions are distinguishable on facts without appreciating that in principle, the case cannot be distinguished." 51. We find ourselves unable to sustain the view as expressed by the AAR for the following additional reasons. Undisputedly, India follows the HSN system of classification. We take note of the determinations made by competent authorities in jurisdictions overseas with respect to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 from the findings and conclusions recorded hereinabove, 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. We are also of the firm opinion that 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." 6. We additionally note that the scope of CTH 8518 was explained by us in Amazon Wholesale India Private Limited in the following terms:- "42. CTH 8518, on the other hand stood confined to loudspeakers, headphones and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... '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 had no occasion to examine the questions in light of our decision and which would constitute the binding declaration of the legal position by the jurisdictional High Court. In any event, and for reasons assigned in that decision, we are of the firm opinion that the orders impugned here cannot be sustained. 8. However, and before parting, we deem it apposite to deal with some amendments which have come to be introduced in CTH 8518 by way of Finance Act, 2022. As a result of those amendments, CTH 8518 has seen the inclusion of the expression "wireless" in terms of CTH 8518 29 10 and CTH 8518 22 10, while CTH 8517 has remained untouched. However, it becomes pertinent to note that the bro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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