2025 (12) TMI 1627 - AAR - Customs

Smartwatch bands import classification: are straps 'parts' of transmission devices under Heading 8517 or mere accessories? Held 9113.

Whether smartwatch bands qualify as 'parts' of transmission apparatus under Heading 8517 turned on the 'essential component' test, i.e., whether absence ... Classification of apple watch bands (leather and non-leather) - to be classified under 85177990 or under 42050090? - whether the watch bands can be termed as 'Parts' or not? - HELD THAT:- In the case of Electrosteel Castings v. CCE [1987 (1) TMI 345 - CEGAT, NEW DELHI] the Hon'ble Tribunal observed that 'part' is a component whose absence will disable a machine or appliance. It must be regarded as an essential ingredient or part of that machine - In the present case, both kinds of the apple watch band (leather and non-leather) are used only for securing the apple watch onto user's wrist. Apple watch is finished/complete goods in itself and absence of apple watch band will not make it disable as it can still works as transmission apparatus of heading 8517 - the apple watch bands are not parts of a communication device under heading 8517 as they do not contribute connectivity. data transmission/reception/conversion. In the present case, it can be understood that watch bands or straps irrespective of nature of material, are essentially used to secure the watch onto user's wrist. Watch band do not perform any other specific functions than securing the watch onto wrist. it is not the case that the quality of polyester or leather used in making of bands, have specific nature impacting the performance of the watch. It is also clear that watch bands are interchangeable from one watch to another according to their models. Therefore, watch band cannot be understood as items of Section XVI or Chapter 85. Thus, exclusion clause is not applicable in present case. The subject goods are sold as an accessories to apple watch under generic name 'watch band'. Further, the applicant has submitted that these bands are to be imported independently, not along with the watch. On the basis of tariff heading, explanatory notes, the information available on website of Apple, product details submitted by the applicant and Rule 1 of GIR, I find that subject goods are specifically covered under heading 9113, hence merit classification under CTH 9113. Watch bands/bracelets of base metal (e.g., metal link/mesh bracelets): 9113 20 90 - Watch bands of plastics/rubber, leather or textile (complete bands, not 'parts'): 9113 90 90. Issues: (i) Whether Apple Watch bands (leather and non-leather), imported separately, are classifiable as parts of Apple Watch under Chapter 85 (CTH 8517 79 90 for non-leather and CTH 4205 00 90 for leather) or as watch straps/bands under Heading 9113.Analysis: The question is one of tariff classification under the First Schedule read with Section and Chapter Notes and the General Interpretative Rules. Rule 1 of GIR requires classification to follow the terms of the headings and any relative Section or Chapter Notes; HSN Explanatory Notes are an important interpretive aid. Section Note 2(b) to Section XVI and GRI 3(a) address parts of goods of Chapter 85; Note 1(g) to Chapter 91 and Section Note 1(b) to Section XVI govern exclusions. The Authority examined the functional nature of the bands, the absence of any electromagnetic or other features in the bands that contribute to connectivity/data transmission, and whether the bands are essential components without which the Apple Watch cannot function. Evidence on record, including product descriptions and photographs, showed bands primarily perform the fastening function and are sold as independent accessories. The applicant's contention that bands enable certain watch functionalities was not established by demonstrating any intrinsic functional or electronic contribution of bands to data transmission or sensors; sensors and communications are within the watch body. The Authority applied the ordinary/commercial understanding of the goods, relevant GIRs and HSN notes, and considered interchangeability and compatibility distinctions relied upon by the parties.Conclusion: The Apple Watch bands (both leather and non-leather) are classifiable under Heading 9113 as watch straps/watch bands and parts thereof (non-leather bands under 9113 20 90 and bands of plastics/rubber, leather or textile under 9113 90 90). The applicant's proposed classification under Chapter 85 (CTH 8517 79 90) and under Chapter 42 (CTH 4205 00 90) is not accepted.