TaxTMI 
TaxTMI 
2026 (5) TMI 1611
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....n on the premise that the Imported items were classifiable under CTI 85183000 under the category of wireless speakers and liable for payment of BCD@15% in terms of SI.No. 18 of Notification No. 57/2017-Cus. During the course of investigation, statements of some of the staff were recorded by the Officers of Customs under Section 108 of the Customs Act, 1962, who appears to have inter-alia submitted that the Imported Bluetooth wireless headsets/ head phones/ ear phones / ear buds/ neck bands etc. are having principal function of communication in mobile telephony systems. The Appellant's representatives also appear to have submitted the website details of the supplier and also submitted the catalogues for the JABRA brand wireless Bluetooth devices. 3. Post Investigation, a SCN was issued to the importer/Appellant to show cause as to why: - i. The CTH 85176290 claimed by the importer for Bluetooth Wireless headphones / earphones/ Ear buds/ neckbands imported vide Bills of Entry listed in the Annexure-l should not be rejected. ii. The Bluetooth Wireless headphones/ earphones/ ear buds/ Neckbands imported vide Bills of Entry listed in the Annexure-l should not be rec....
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....tooth Wireless Headphones /Earphones / Ear buds/ Neckbands, imported vide Bills of Entry listed in Annexure-l, under Section 28(1) of Customs Act, 1962; iii. The amount of Rs.2,00,00,000/- paid by the importer vide TR Challans No. 000904 dated 24.03.2023 and No. 0010801 dated 30.03.2023 shall be appropriated against the differential duty demanded; iv. I confirm interest in terms of Section 28AA of Customs Act, 1962 on the duty confirmed in this order; v. I refrain from holding the imported goods viz., Bluetooth Wireless headphones/ earphones/ ear buds/ neckbands imported vide Bills of Entry list in the Annexure-1 as liable to confiscation under Section 111(m) of Customs Act, 1962; vi. I drop the proposal to impose penalty on the importer M/s Redington Ltd., under Section 112(a) or Section 117 of the Customs Act, 1962." 6. The Appellant being seriously aggrieved by the above order, has thus filed this appeal before this forum, mainly on the following grounds: - i. The essential character and principal function of the imported goods has to be given primacy and significance to determine the classification of the goods and that the Impugn....
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....requencies. Basically, Bluetooth technology is a unifier enabling wide range of devices to work together and the Bluetooth is named in memory of Herald. I. Bluetooth, a tenth century Danish King, who unified Denmark and Norway. As such, the core technical aspect of Bluetooth is linking various devices using radio frequencies. Wireless Bluetooth devices include cell-phones, two-way radios, remote garage door openers, television remote controls and GPS receivers; v. The presence of Bluetooth Technology is the specific distinguishing factor from wireless headphones/headsets. All wireless headphones and headsets are classifiable under CTH 8518 except the headsets containing Bluetooth. Bluetooth is a short range wireless technology that is used for exchanging data between fixed and wireless devices over short distances; vi. The Bluetooth Technology is standardized by IEEE (Institute of Electrical and Electronics Engineering) 802.15.1. The catalogue of the Imported product has the specific particulars of Bluetooth technology which is subject to the standardization of IEEE; vii. The basic and critical element to be taken into account is the presence of Bluetooth....
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....8518 carries only audio signals and are not an active part of a network, whereas a Bluetooth headset with mobile telephony function is an active part of wireless network, includes a software part for the wireless network and simultaneously receives / transmits voice and data in a wireless network. Thus, "Bluetooth wireless headsets for mobile cell phones" equipped with communication device fully comply with the subheading 8517.62. Based on the above submissions, it was prayed for allowing the Appeal and also prayed to quash and set aside the Impugned Order. 8. Per contra, the Ld. Authorized Representative Mr. Anoop Singh, largely reiterated the findings of the Impugned Order and submitted that main function of the impugned goods is similar to the traditional earphones/headphones which are classifiable under CTH 851830 i.e., to listen through the earphones/headphones and to speak through the microphones. While performing these central functions of an earphone fitted with a microphone, these impugned goods differ from traditional earphones mostly with their sophistication/ease of use and technological enhancements viz., i. Audio enhancing and quality aspects of listeni....
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....r Wireless Network (Such As A Local Or Wide Area Network), Other Than Transmission Or Reception Apparatus Of Heading 8443, 8525, 8527 OR 8528 Customs Tariff sub-Heading 8517 62 reads as under: HS Code Item Description 8517 62 Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus 85176290 others Customs Tariff Heading 8518 reads as under: HS Code Item Description 8518 Microphones And Stands There for; Loudspeakers, Whether or Not Mounted In Their Enclosures; Headphones And Earphones, Whether Or Not Combined With a Microphone, Handsets Consisting Of A Microphone And One Or More Loudspeakers: Audio Frequency Electric Amplifiers; Electric Sound Amplifier Sets. Customs Tariff Item 8518 3000 reads as under: HS Code Item Description 85183000 Headphones and earphones, whether or not combined with a microphone, and sets consisting of a microphone and one or more loudspeakers 12. From the facts as explained and the information made available in the documents which are part of Appeal Memorandum, it is found that the Imported item J....
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....through radio frequency signals to enable connectivity between the user's mobile phone and car infotainment system. The Bluetooth module, therefore, receives data like contact names and numbers saved in the user's phone, voice data in the form of radio frequency signals during an active call (i.e. the signals first received by phone and then from phone to the car infotainment system through the Bluetooth module). The Bluetooth module also transmits voice data in the form of radio frequency signals during an active call (i.e. the user's voice is first received by the microphones installed in the car, converted into electric signals and sent to the Bluetooth module to be further transmitted to phone for regular telecommunication transmission thereafter). Thus, the Bluetooth module is engaged in reception, transmission and conversion of voice and other form of data. Accordingly, it would fall under sub-heading 851762 and consequently deserves to be classified it under CTH 8517 62 90."(at Pg.No. 306). 14. The significant aspect that we notice from the above judgment is that a Bluetooth device receives radio frequency analog signal from other devices and converts the radi....
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.... North Block, New Delhi, 5th September, 2013 Subject: Classification of "Bluetooth Wireless Headset for mobile phone / cell phone" under Harmonised Customs Tariff - reg. Doubts have been raised on whether "Bluetooth Wireless Headset for mobile phone/cell phones" is classifiable in heading 8517 or 8518 of the Customs Tariff. The relevant text of these heading is as under: 85:17"...; other apparatus for the transmission or reception of voice, image or other data, including apparatus for communication in a wireless network (Such as a local or wide area network) ...." 85:18 "..; Headphones and earphone, whether or not combined with a microphone,..." 2. The illustrative product description for the purpose of classification of similar or identical headsets for "mobile phones cell phone" is as follows: Wireless headsets consisting of a single (monaural) over - the ear earphone combined in the same hosing with a microphone, a radio transceiver, a rechargeable battery, a poser input, a LED indicator light and controls standard (Wireless protocol for exchanging data within a personal Area Network (PAN) using short length radio waves over ....
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....f wireless network, includes a software part for the wireless network and simultaneously receives/transmits voice and data in a wireless network. Thus, "Bluetooth wireless headsets for mobile phone / Cell phones" equipped with communication device fully comply with the subheading 8517.62. 5. In view of the above, the Board is of the view that "Bluetooth wireless headsets for mobile phones / cell phones" is correctly classified in heading 85.17, subheading 8517.62, by application of GRI 1 (Note 3 to Section XVI), 3 (b) and 6. 6. Accordingly, Suitable instructions may be given to the field formation. Difficulty face, if any, may be brought to notice of the Board. "(emphasis added wherever necessary). [Emphasis added by us for clarity] 17. The above Circular at Para 4 very categorically explains the products which are covered under CTH 8518 and CTH 8517. It emphatically clarifies in no uncertain terms that headphones combined with a microphone of heading 8518 carries only audio signals and are not an active part of a network. The General Rules for Interpretation (GIR) of the First Schedule is referred in the above Circular. For the purpose of clarity, the neces....
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....ance of GIR and Section Note of HSN are appropriately referred and applied in the above referred Circular. For example, Note 3 of Section XVI of HSN states that : 'unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.' A constructive reading of the GIR and Note 3 of Section XVI states that the essential character and principal function of the Imported goods are the definite determinative factor in determining the classification of the imported goods. From a cumulative reading of the above in the context of the clarificatory Circular and the technical features as found in the Catalogue enclosed in the Appeal Memorandum we have no doubts in our minds to conclude that the Imported goods have to be classified under CTI 85176290. 19. Further, it is also seen that a Bluetooth headset with mobile telephony is an active part of wireless network which includes a software part for the wire....
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....phones and stands/loudspeakers mounted or not in their enclosure, which inter alia includes headphones and earphones, whether combined with a microphone or not. A first blush at the description itself gives an impression that while 8517 is for the items like telephone/smart phone, other apparatus for transmission or reception of voice/images, etc., but TI 8518 has a narrow application, basically something to do with microphone/loudspeakers with microphone connected or not with headphones or earphones. There is nothing specific under 8518 as to the usability of these items with Telephones/mobiles/smartphones. This is where the clarification issued by Board circular - supra plays a crucial role; taking note of the advances in the technological field, the board has clearly clarified that classification of such devices/Apparatus that could be used as Apparatus for transmission or reception of voice, images, wired or wireless should be under 8517. 23. The other aspect which is required to be considered is the usage/end-use of the goods in question as considered in the larger perspective, i.e., how the same has been interpreted globally. For this, the US Rulings in the cases of ....