10% duty for Amazon enclosure model P5B83L, classifiable under Tariff Law: AAR

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The Mumbai Customs Advance Rulings Authority has ruled that this Amazon wireless speaker model no. P5B83L deserves classification under heading 8518 and more specifically under subheading 85182100 of the First Schedule to the Customs Tariff Act.

The applicant M/s Amazon Seller Services Pvt. ltd. has filed a request with the customs authority for advance rulings for the classification of the wireless speaker device model: P5B83L under subheading 85182100.

Sri Lakshmikumaran, Solicitor, appearing on behalf of the plaintiff stated that the product is a subwoofer compatible with Echo devices (via Wi-Fi or Bluetooth). He has no microphone. It has Wi-Fi connectivity and Bluetooth function. He is not capable of voice interaction. It can be paired with Echo devices through the Vox app. The product does not support cellular services. It requires an internet connection to perform its functions. It can be used in a residential or small office environment. Once connected to the internet and paired with compatible Echo speakers, users can listen to music on this speaker. It has an MTK 8516 processor, 1GB of RAM and 4GB of storage space. The wireless subwoofer operates on the frequency of approximately 80 Hz. which varies depending on the device it is paired with. It is designed to produce better quality sound and is compatible with various Echo devices. It is a single loudspeaker mounted in a box. A loudspeaker and a woofer perform a similar function. However, a woofer is normally the largest driver in a speaker and is designed to produce low frequencies, such as those associated with bass or drums for music or thunder and explosions in a home theater. In accordance with CBEC (now CBIC) Circular No. 27/2013-Cus.de, active and passive speakers can be classified under Item 8518 of the First Schedule of the Customs Tariff Act of 1975. Depending on the number of trips units, the eight-digit classification is determined. The applicant stated that the wireless speaker can be properly classified under subheading 85182100 because it includes a single drive unit in its housing.

It was held by the authority that “Although the device contains Bluetooth and Wi-Fi functionality for transmitting or receiving data by electromagnetic waves in a wireless network, however, this functionality is only an additional function, which makes it compatible with devices Distinct echo. This device is only a loudspeaker and its main function is to reproduce sound by converting the electrical variations or oscillations of an amplifier into mechanical vibrations which are communicated to the air, which correctly falls under heading 8518 Note 3 to Section XVI states that “unless the context otherwise requires, composite machinery consisting of two or more machines assembled to form a whole and other machinery designed for the purpose of performing two or more functions complements or alternatives must be classified as if they comprised only that component or as being that machine which performs the main function”. Consequently, heading 8518 seems to be the correct one for the classification of the disputed device”.

It was further held that “Loudspeakers classified under heading 8518 include both passive loudspeakers and active loudspeakers. Active speakers, like many subwoofers, contain a built-in audio amplifier. The subheading into which loudspeakers are classified depends on the number of “drive units” – the actual loudspeaker cones or ribbons – in each cabinet or enclosure. Loudspeakers equipped with a single loudspeaker in each cabinet are classified under subheading 85182100. The offending device has a single loudspeaker”.

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