A Division Bench of the Delhi High Court has determined that the Echo Show 5, Echo Dot 4th Generation, and Echo Dot 4th Generation with Clock qualify for exemptions under SI. No. 20 of the June 30, 2017, Notification.
The Bench of Justices Yashwant Varma and Dharmesh Sharma observed that categorizing these devices solely as speakers, even though they can function as such at the user’s discretion, does not accurately reflect their primary attribute.
Amazon Wholesale India, the appellant, challenged the Customs Authority for Advance Rulings‘ classification of the 11 devices under Customs Tariff Headings 8518 and 8528. The appellant contends that the devices belong to CTH 8517, specifically Tariff Entry 8517 62 90, as they fall under the “Echo Family Devices” category, described as communication devices with built-in speakers.
The crux of the matter was whether the devices should be placed under CTH 8517, CTH 8518, or CTH 8528. While CTH 8517 encompasses apparatus for voice, image, or data transmission, CTH 8518 pertains to microphones, loudspeakers, headphones, and earphones, and CTH 8528 deals with monitors and projectors.
The court disagreed with the Customs Authority for Advance Rulings’ view that the Echo 4th generation devices primarily function as speakers. It noted that these devices, despite being voice-enabled and Wi-Fi compatible, should not be solely classified as “smart speakers.”
Instead, the court asserted that they are “convergence devices” performing functions such as reception, conversion, and transmission of data, qualifying them for classification under CTH 8517.
Regarding Echo Show Devices, the court rejected the notion that their principal function is to act as displays or monitors. The court insisted that these devices should be placed under CTH 8528, specifically Tariff Entry 8528 59.00, due to their capability to play videos and display content during video calls.
The department argued that Echo 4th generation devices and the Echo Studio, accepting voice commands with Wi-Fi capability, should be considered as smart speakers under Notification No. 12/2022-Customs. However, the court emphasized that the terms “hearable devices” are not found in CTH 8518 or 8528 but are only used in the exemption notification.
In conclusion, the court disagreed with the denial of classification and exemption benefits to the Echo Show 5, Echo Dot 4th Generation, and Echo Dot 4th Generation with Clock under CTH 8517. The court emphasized that the devices’ multifunctionality, beyond being mere speakers, warrants their rightful classification and exemption status.
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