TaxTMI 
TaxTMI 
2023 (7) TMI 1189
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....stion of classification of the proposed items of import, Echo Dot (5lh Generation) Model No. C2N6L4 ['Echo Dot (5th Gen)', in short] and Echo Dot (5th Generation) with clock Model No. C4E8S3 ['Echo Dot (5th Gen) with clock', in short]. Ruling has also been sought on applicability of various notification on import of the subject goods. 3.1 The applicant has stated that, both the devices are collectively referred to as 'the Echo Dot devices'; they will sell the Echo Dot devices to the distributors, retailers and customers in India. [Images as below] 3.2 As per the applicant, the Echo Dot devices, are voice command devices with multiple functions, including answering questions, playing music, reading news/ audiobooks, providing traffic, weather and other real-time information and controlling smart devices; the Echo Dot devices are communication devices in the form of speaker with Alexa Technology built in it; these devices respond to the name "Alexa", which is commonly known as the 'wake word'; this 'wake word' can be changed by the user to either "Amazon", "Computer" or "Echo"; Echo Dot (5th Gen) is an upgraded version of Echo Dot (4th Genera....
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....tch a few magic words like "Alexa in the 0 present case; a user may change this wake word to "Amazon" or "Echo'; the Echo Dot devices have 3 microphones to detect sound; once, the Echo Dot devices, through microphones, analyze these words, they become operative and start recording user s voice; the captured voice command is then sent over the internet to Amazon services in the cloud called Alexa Voice Service (AVS, in short); Amazon server processes the voice commands, interprets them and sends a response back to the Echo Dot devices which then processes and presents the response to the user either as a voice reply or in the form of an action i.e. performing a specific function (turn on the lights); for example, a user gives a command, "Alexa, play the previous song again", the moment, the Echo Dot devices hear the word Alexa, they become operative and start recording the command which in present example is 'play the previous song again'; the Echo Dot devices then sends this recorded command to AVS which analyses this command and finds out the results from Amazon cloud to be sent back to the Echo Dot devices; the Echo Dot devices play the same either through the interna....
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....performing two or more complimentary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function." 3.9 The applicant has further submitted that, Echo Dot devices can perform multiple functions and most of the functions can be performed only when the Echo Dot devices are connected to an already enabled wi-fi or active blue-tooth connection, by the process of communication (transmission, conversion and reception) either with the Amazon cloud or with its user's phone; in other words, Echo Dot devices cannot provide voice enabled services or function as a speaker or a control apparatus or a clock etc. without the communication function; the inbuilt speaker act as an output medium for the information/audio sought by the user, however, it is integration of the Alexa and the capability to receive/transmit data (and voice etc.) which gives the principal function to the Echo Dot devices and this function is specifically covered under heading 8517 of the Customs Tariff Act; the relevant sub-heading for the classification of the devices would be 85176290. 3.10 The applicant has also stated that, CAA....
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....5th Gen) with clock' are rightly classifiable under sub-heading 85176290 under Schedule I to the Customs Tariff Act, (B) If the answer to the above question is in the positive, whether the applicant is eligible to claim benefit of serial number 20 of Notification No. 57/2017-Cus. dated 30.06.2017, as amended? (C) If the answer to question (A) is in the negative and classification is confirmed under heading 8518 relying on previous ruling no, CAAR/Amazon/17/2021 dated 20.07.2021, whether benefit of serial number 10 of Notification No. 12/2022-Customs dated 01.02.2022 is applicable on import of Echo Dot devices? (D) If the answers to questions (A) and (C) are in negative, then, what is the appropriate classification and effective rate of duties on import of the Echo Dot devices? 5. Comments in the matter have been received from the concerned Commissionerate of Customs, wherein, it is stated inter-alia that, the claim of the importer that communication by way of transmission, reception, conversion of voice and other form of data is the principal function of Echo Dot, is unacceptable; it is found that the input through the in-built microphone and output through the inbuilt s....
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.... an advance ruling by CAAR, New Delhi, in the past and informed that against the said ruling, the applicant has filed an appeal; that for a similar product, CAR Mumbai had also issued a ruling for classification under Sub-heading 851762, in the past, against an application for advance ruling filed by another applicant. Further, the AR explained features and functioning of the product in question and averred that the product should be considered as communication device, based on the principal function of the product. She further explained that the product in questions is a multifunctional device, though it works as a speaker also, but it is much more than a speaker, basically, the product in question is a communication device, thus it merits classification under Sub-heading 85176290. In support of her argument, she referred to rulings issued by HMRC and World Customs Organisation. While referring to the ruling issued by CAAR, New Delhi for similar product, she stated that the said ruling had been given based on the description i.e speaker in the catalogue, but conclusion in the previous ruling has been drown without giving any explanation. She mentioned that the other product for wh....
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....pters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes. Rule 3 of the GRI provides, "3. When by application of rule 2(b) or for any other reason, goods are, prima-facie, classifiable under two or more headings, classification shall be effected as follows: (a) the heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only Of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion....
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....act that the principal function of the device is to act as speaker. Though, other functions viz making to do list, setting alarm, playing audio books, weather & traffic update etc. are also being performed by the goods in question, however all these other functions are secondary to the principal function i.e speaker. 9.5 In view of the goods in question being described as smart-speaker, it would be appropriate to discuss the coverage of goods under headings 8518. Heading 8518 covers Microphones and stands therefor: Loudspeakers, whether or not mounted in their enclosures: Headphones and Earphones, whether or not combined with a microphone, and sets consisting of a microphone and one or more Loudspeakers: Audio-Frequency Electric Amplifiers: Electric Sound Amplifier sets. Moreover, even w/o acting as communication devices for communicating with Amazon cloud/AVS, these devices can connect with smart phone and play songs taking input from the smart phone. 9.6 On the basis of the product description and functions as given in the application and as advertised by the applicant to the public at large, I find that the principal function of the goods in question is to reproduce sound and ....
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....e to the goods however these functions add value to a device. By the logic applied by the applicant any machine even though capable of performing a specific function, if it is also fitted with wi-fi module to connect with internet, will become a communication device under heading 8517 & all other headings meant for classification of machines performing specific function, will be left redundant and useless. 9.9 Lastly, I note that in the previous Ruling No. CAAR/Del/Amazon/17/2021 dated 20.07.2021, the Authority while giving ruling on classification of the similar goods has reasoned out in detail the opinion regarding classification under heading 8518. 10. Keeping in view the foregoing, I am of the view that classification of the proposed items of import, "Echo Dot (5th Generation) Model No. C2N6L4 and Echo S Dot (5th Generation) with clock Model No. C4E8S3 will be under Sub-heading 85182210 of the first schedule to the Customs Tariff Act, 1975. 11. As regards questions relating to applicability of notifications on import of the goods in question, it is ruled that exemption under serial number 20 of Notification No. 57/2017-Cus dated 30.06.2017, as amended, is not admissible as i....