Custom, Excise & Service Tax Tribunal
Minda D Ten India Private Limited vs New Delhi on 3 August, 2021
Author: Dilip Gupta
Bench: Dilip Gupta
1
C/52239/2019
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH
CUSTOMS APPEAL NO. 52239 OF 2019
(Arising out of Order-in-Appeal No. CC(A)CUS/D-II/PPG-161/2019-20 dated 23.05.2019
passed by Commissioner of Customs (Appeal), New Delhi)
Minda D-Ten Private Limited ...Appellant
Plot No. 383, Industrial Growth Center,
Phase-II, Sectore-3, Bawal,
District- Rewari, Haryana - 123501
VERSUS
Commissioner of Customs (Import), ...Respondent
New Customs House,
New Delhi
APPEARANCE:
Shri B.L. Narasimhan, Shri Rachit Jain, Ms. Jyoti Pal and Ms. Ashwini Bhatiya,
Advocates for the Appellant
Shri Rakesh Kumar, Authorized Representative of the Department
CORAM: HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT
HON'BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL)
Date of Hearing: June 30, 2021
Date of Decision: August 03, 2021
FINAL ORDER No. 51693/2021
JUSTICE DILIP GUPTA:
Minda D-Ten India Private Limited 1 has filed this appeal to assail
the order dated 23.05.2019 passed by the Commissioner of Customs
(Appeals) 2 by which the assessment order dated 23.02.2017 passed
by the Assistant Commissioner classifying the Bluetooth module
imported by the appellant under Customs Tariff Heading 3 8529 90 90,
as claimed by the Department and not under CTH 8517 62 90 as
claimed by the appellant, has been upheld and the appeal has been
dismissed.
1. the appellant
2. the Commissioner (Appeals)
3. CTH
2
C/52239/2019
2. The appellant is engaged in the manufacture and supply of car
infotainment systems (information and entertainment systems). This
system can be divided into two categories, namely (i) car infotainment
systems embedded with Bluetooth module and (ii) car infotainment
systems not embedded with Bluetooth module. The appellant, inter
alia, imports Bluetooth module for use in the manufacture of car
infotainment systems embedded with Bluetooth module.
3. The issue involved in this appeal concerns import of a Bluetooth
module through Bill of Entry dated 17.01.2017 bearing description
'Bluetooth EDR module [Model No. NF2301-16M] (135312-
09400880A0Z)(WPC LIC NO. 593 dated 15/05/15) (Parts of car audio)'
from Fujitsu Ten Singapore Pvt. Ltd.
4. According, to the appellant the said Bluetooth module is a multi-
chip system for multimedia Bluetooth applications comprising radio
(Bluetooth Processor), baseband, flash memory, DSPs, which work
together to achieve a fully compliant Bluetooth system. In case
products like laptop, mobile phone, infotainment systems are required
to be connected to each other through Bluetooth technology, a
Bluetooth module has to be present in it.
5. The functioning of Bluetooth module has also been described. It
has been stated that for instance in a case whether two devices are
mobile phone and car infotainment systems, a user will have to switch
on the Bluetooth of the mobile phone which is to be connected with
the car infotainment systems. Once the Bluetooth is ON in the mobile
phone, a user will have to switch ON the Bluetooth of the car
infotainment system also. Since Bluetooth works on a specific
frequency, both the products can be interconnected to each other
through radio waves. Thereafter, the Bluetooth module of the mobile
3
C/52239/2019
phone and Bluetooth module of the car infotainment system
communicate with each other. Without the presence of the Bluetooth
module in electronic devices like mobile phone, laptop, printer or car
infotainment system, the said devices can still perform their respective
functions but they will not be able to connect wirelessly through
Bluetooth technology.
6. According to the appellant, the Bluetooth module installed in the
car infotainment system receives data from the connected mobile
phone; converts the analog data into digital data; and transmits the
data either back to the mobile phone (for two way communication) or
to the micro-controller (brain) of car infotainment system for further
processing. In this manner, the Bluetooth module performs the
function of reception, conversion and transmission of data.
7. The appellant has further stated that the Bluetooth module is of
general use and can be used in the following applications:
S. No. Applications
1. Bluetooth-enabled automotive wireless gateways
2. Hands free car kits for embedded car audio system
3. Bluetooth audio source gateways for PND systems
4. High quality stereo Bluetooth headsets
5. High quality mono Bluetooth headsets
6. Bluetooth speakers
7. Bluetooth VoIP handsets
8. Multimedia USB dongles
9. Bluetooth multimedia photo frame
10. Bluetooth portable media player
8. The appellant sought classification of the Bluetooth module
under CTH 8517 62 90 of the First Schedule to the Customs Tariff Act,
4
1975 and claimed the benefit of a Notification dated 01.03.2005,
which during the relevant period of import, granted exemption from
payment of Basic Customs Duty on all goods (with few exceptions)
classifiable under CTH 8517. However, the Department disputed the
4. the Tariff Act
4
C/52239/2019
afore-mentioned classification by the appellant under CTH 8517 and
sought to classify the impugned goods under CTH 8529 90 90.
9. The Assistant Commissioner, after noticing the basic function of
Bluetooth module and the usage of Bluetooth, concluded that
Bluetooth module cannot be termed as a "part". The Assistant
Commissioner also found that Bluetooth module can be termed as an
apparatus/machine. Ultimately, the Assistant Commissioner observed
that since Bluetooth module is principally used in car infotainment
system, it will merit classification under CTH 8529 90 90. The relevant
portion of the order dated 23.02.2017 of the Assistant Commissioner
is reproduced below:
"The issue to be decided in the classification of "Bluetooth
Module" which the said Importer has claimed under CTH
85176290. The basic question to be decided is the
independent status of Bluetooth Module, if it is a part, an
apparatus, a machine or an accessory.
The basic function of Bluetooth is to enable exchange of data
between two Bluetooth enabled device within a wired or
wireless network. It's application can be used for the following
devices (a) Printer (b) Computers (c) Hard Drive (d)
Keyboard/Mouse (e) Speaker (f) Compact Disc (g) Digital
Camera (h) Global Positioning System (i) Clock Radio (j) Video
Monitors/Televisions (k) Video game Machines.
As Bluetooth in used in so many devices as enumerated
above and all these devices can work independently
without having Bluetooth Chip in these devices, so it
cannot be termed as part and has been rightly pointed
out by the Importer in the written submission. They had
also referred to the judgment of the Hon'ble Supreme Court in
the case of Commissioner of Central Excise Delhi Versus
Insulation Electrical Private Limited 2008 (224) ELT 512 (SC),
wherein it has been averred that "A part is an essential
component of the whole cannot function". Admittedly, all
Bluetooth compliant devices can function without having
Bluetooth Module. In the same judgment accessory has been
defined as "Accessory is supplementary or subordinate in
nature and need not be essential for actual functioning of the
product. Here the Bluetooth can be correctly termed as an
accessory as it facilitates exchange of data between two
devices upto a defined limit of around 10 mtrs.
As delineated above, to be termed as a machine, it
should independently perform a given function when
attached to electric current, a Bluetooth will provide
transfer of data or voice etc., it will function only after
attached to the desired device to perform an activity, as
desired. Hence can be termed as a machine. Thus
Bluetooth Module has inbuilt devices to term it as an
apparatus/machine but classifying the same under CTH
85176290 does not appear in order.
5
C/52239/2019
The said party's submission that Bluetooth Module will attract
classification under 85176290 in view of the chapter note 2 (b)
to annexed to section XVI of the customs tariff, Wherein it
states that "other parts if suitable for use "other parts, if
suitable for use solely or principally with a particular kind of
machine, or with a number of machines of the same heading
(including a machine of heading 8479 or 8543) are to be
classified with the machines of that kind or in heading
8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538
as appropriate. However, parts which are equally suitable for
use principally with the goods of heading 8517 and 8525 to
8528 are to be classified in heading 8517", are to be classified
in heading 8517. As Bluetooth Module does not come under the
gambit of parts and duly acknowledged by the importer and
they have supported this argument by citing the judgment of
Commissioner of Central Excise Delhi Versus Insulation
Electrical Private Limited, 2008 (224) ELT 512 (SC).
In view of the foregoing discussions, it is apparent that
Bluetooth Module cannot be termed as part of car
Infotainment systems. It can be termed as an apparatus
or machine. As the apparatus/machine do not
specifically fall under any chapter heading, it will attract
can be safely classification under CTH 8543, which states
that "Electric Machine and apparatus having individual
functions, not specified or included elsewhere in the chapter"
and CTH 85437099 is more akin to its classification. Further, as
per note 2(b) of chapter note under section XVI, wherein it
states that "other parts, if suitable for use solely or principally
with a particular kind of machine, or with a number of machine
of the same heading (including a machine of heading 8479
or 8543) are to be classified with the machine of that
kind. Since Bluetooth Module is principally used in car
infotainment system, as declared by the Importer, it will
merit classification under CTH 85299090."
(emphasis supplied)
10. The Commissioner (Appeals), as can be seen from the order
itself, merely reproduced parts of the order passed by the Assistant
Commissioner and dismissed the appeal after upholding the
assessment order. The relevant portions of the order passed by the
Commissioner (Appeals) are reproduced below:
"5.1 The basic function of Bluetooth is to enable exchange of
data between two Bluetooth enabled devices within a wired or
wireless network. It's application can be used for the following
devices (a) Printer (b) Computers (c) Hard Drive (d)
Keyboard/Mouse (e) Speaker (f) Compact Disc (g) Digital
Camera (h) Global Positioning System (i) Clock Radio (j) Video
Monitors/Televisions (k) Video game Machines. As Bluetooth
in used in so many devices as enumerated above and all
these devices can work independently without having
Bluetooth Chip in these devices, so it cannot be termed
as part.
5.2 In the case of Commissioner of Central Excise Delhi Vs.
Insulation Electrical pvt. Ltd. 2008(224) ELT 512(SC) it is
clarified that "A part is an essential component of the whole
without which the whole cannot function. Admittedly, all
6
C/52239/2019
Bluetooth compliant devices can function without having
Bluetooth Module. In the same judgment accessory has been
defined as "Accessory is supplementary or subordinate in
nature and need not be essential for actual functioning of the
product. Here the Bluetooth can be correctly termed as an
accessory as it facilitates exchange of data between two
devices upto a defined limit of around 10 mtrs.
5.3 I find that Bluetooth Module will attract
classification under 85176290 in view of the chapter
note 2 (b) to annexed to section XVI of the customs
tarill, Wherein it states that "other parts if suitable for use
"other parts, if suitable for use solely or principally with a
particular kind of machine, or with a number of machines of the
same heading (including a machine of heading 8479 or 8543)
are to be classified with the machines of that kind or in heading
8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as
appropriate. However, parts which are equally suitable for use
principally with the goods of heading 8517 and 8525 to 8528
are to be classified in heading 8517", are to be classified in
heading 8517. As Bluetooth Module does not come under
the ambit of parts and duly acknowledged by the
importer and they have supported this argument by citing the
judgment of Commissioner of Central Excise Delhi Versus
Insulation Electrical Private Limited, 2008 (224) ELT 512 (SC).
Similarly, the circular no. 36/2013-cus dated 05.09.2013
quoted by the Importer in support of their defense, do not
squarely cover Bluetooth Module. That circular settles the
classification of Bluetooth wireless.
5.4 In view of the foregoing discussions, it is apparent
that Bluetooth Module cannot be termed as part of car
Infotainment systems. It can be termed as an apparatus
or machine. As the apparatus/machine do not
specifically fall under any chapter heading, it will attract
its classification under CTH 8543, which states that
"Electric Machine and apparatus having individual
functions, not specified or included elsewhere in the
chapter" and CTH 85437099 is more akin to its
classification. Further, as per note 2(b) of chapter note under
section XVI, wherein it states that "other parts, if suitable for
use solely or principally with a particular kind of machine, or
with a number of machine of the same heading (including a
machine of heading 8479 or 8543) are to be classified with the
machine of that kind. Since Bluetooth Module is principally
used in car infotainment system, as declared by the
Importer, it will merit classification under CTH
85299090."
(emphasis supplied)
11. Shri B.L. Narasimhan, learned counsel appearing for the
appellant made the following submissions:
(i) The impugned goods are appropriately classifiable under
CTH 8517 and not under CTH 8529. For any product to be
classifiable under the sub-heading 8517 62, it should
receive, convert, and transmit voice, images and other
7
C/52239/2019
data. The impugned goods receive, transmit and convert
data, voice, etc. through radio frequency signals to enable
connectivity between the mobile phone of the user and car
infotainment system. Accordingly, the impugned goods
squarely fall under sub-heading 8517 62 and consequently
the appellant has rightly classified the impugned goods
under CTH 8517 62 90;
(ii) The Bluetooth module cannot be called as 'part' of car
infotainment system for the reason that the car
infotainment system can perform its function even without
the Bluetooth module and even the Assistant
Commissioner and the Commissioner (Appeals) have given
a finding that the Bluetooth module is not a 'part'. The
function of the Bluetooth module is to provide wireless
connectivity to the car infotainment systems. Once the
Bluetooth module is not a 'part' of car infotainment
systems, it cannot be classified under CTH 8529 because
the scope of entry is to cover only 'parts' suitable for use
solely or principally with Heading 8525 to 8528 and not to
cover accessories;
(iii) It can be seen from the findings recorded by the
Commissioner (Appeals) that Bluetooth module can be
used in printers, computers, speaker etc. and all these
devices can work independently without having Bluetooth
chip in these devices. Therefore, Bluetooth module cannot
be termed as 'part' of car infotainment systems. Despite
this finding, the Commissioner (Appeals), in the last line of
the impugned order just before the operative portion of
8
C/52239/2019
the impugned order, observed that since Bluetooth module
is principally used in car infotainment systems, as declared
by the importer, it will merit classification under CTH 8529.
The classification upheld under CTH 8529 is, therefore, bad
in law;
(iv) Even if it is assumed for the sake of argument that the
Bluetooth module is 'part' of car infotainment systems, still
it cannot be classified as 'part' of car infotainment systems
under CTH 8529 because of application of Section Note
2(a);
(v) There is no discussion of Section Note 2(a) by the
Commissioner (Appeal). Clauses under Section Note 2 are
to be sequentially applied and one cannot, therefore,
directly jump to Section Note 2(b) without exhausting the
possibility of Section Note 2(a). In this connection, reliance
has been placed on the decision of the Supreme Court in
Collector of Central Excise vs. Delton Cables Ltd. 5;
and
(vi) An order has to be sustained on the basis of the findings
given thereunder and not on what could be the intention of
the person passing the order. In this connection, reliance
has been placed on the judgment of the Supreme Court in
Mohindhr Singh Gill and another vs. Chief Election
Commissioner, New Delhi and Others 6.
5. 2005 (181) E.L.T. 373 (S.C.)
6. (1978) 1 SCC 405
9
C/52239/2019
12. Shri Rakesh Kumar, learned Authorized Representative of the
Department, supported the impugned order and made the following
submissions:
(i) Where the subject goods are principally (primarily/
mainly/chiefly) used with the apparatus/machines of
Headings 8525 to 8528, the same shall be classified under
Heading 8529. The subject goods may not be an integral
part, but can be a part principally used for the apparatus of
Heading 8525 to 8528 to enhance its outcome;
(ii) Chapter Heading 8517 essentially talks about
telephone/telecommunication but the appellant had
declared the goods as 'part' of Car infotainment System;
(iii) The Tariff Heading of goods is ascertained on the basis of
the description of subject goods as declared and not
otherwise. The importer declared the goods as "Bluetooth
EDR module (Module No. NF 2301-16M) part of car audio",
which means that the goods are customized for car audio
system only. Hence, the goods were correctly classified
under CTH 8529 90 90. In this connection reliance has
been placed on the judgment of the Supreme Court in
Westinghouse Saxby Farmers Ltd. vs. Commr. of
Central Excise, Calcutta 7;
(iv) The submission of the appellant that the order of
Commissioner (Appeals) under challenge has mentioned
the subject goods as an independent apparatus and not as
'part' is incorrect as the assessment order and the order of
7. MANU/SC/0162/2021
10
C/52239/2019
Commissioner (Appeals) categorically classify the subject
goods under Chapter Heading 8529;
(v) The submission of the appellant that it is a general 'part'
which can be used anywhere is irrelevant as the subject
goods shall only be used in the apparatus (Car Audio) as
declared by importer;
(vi) The submission about Chapter Note 2(a) is out of context
as the declaration of the importer on the Bill of Entry is
'parts' of car infotainment systems;
(vii) Since Bluetooth is directly responsible for enhancing the
features of the system, without which the system cannot
function to give the desired output, it has been correctly
classified as a 'part' of the system falling under CTH 8529
90 90; and
(viii) The benefit of Exemption Notification should not be
extended to circumvent duty on goods and should never
be elastically stretched to cover such goods which may not
come under its periphery. Reliance has been placed on the
judgment of the Supreme Court in Commissioner of
Customs (Import) Mumbai vs. Dillep Kumar and
Company & Ors 8.
13. The submissions advanced by the learned counsel for the
appellant and the learned Authorized Representative of the
Department have been considered.
14. The appellant claims that the Bluetooth module imported by the
appellant should be classified under CTH 8517 62 90 of the First
Schedule to the Tariff Act as it receives, transmits and converts data,
8. 2018 (361) E.L.T. 577 (S.C.)
11
C/52239/2019
voice, etc., through radio frequency signals to enable connectivity
between the mobile phone and car infotainment systems. However,
the Department has sought to classify it under CTH 8529 90 90 as it
would be a 'part' principally used for the apparatus of Headings 8525
to 8528 to enhance its outcome.
15. To appreciate the contentions advanced on behalf of the parties,
it would be appropriate to reproduce the relevant portions of Chapter
85 and they are as follows:
Chapter 85
Electrical machinery and equipment and parts thereof;
sound recorders and reproducers, television image and
sound recorders and reproducers, and parts and accessories
of such articles
8517 Telephone sets, including telephones for
cellular networks or for other wireless
networks; other apparatus for the
transmission or reception of voice, images or
other data, including apparatus for
communication in a wired or wireless network
(such as a local or wide area network), other
than transmission or reception apparatus of
heading 8443, 8525, 8527 or 8528.
******** **********
-- Other apparatus for transmission or reception
of voice, images or other data, including
apparatus for communication in a wired or
wireless network (such as a local or wide area
network)
8517 62 -- Machines for the reception, conversion and
transmission or regeneration of voice, images
or other data, including switching and routing
apparatus:
******** **********
8517 62 90 --- Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . u 10% -
******** **********
8529 Parts suitable for use solely or principally with
the apparatus of headings 8525 to 8528
******** **********
8529 90 90 --- Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . u 10% -
16. The Bluetooth module receives radio frequency analog signals
from other devices (like mobile phone), converts the radio frequency
12
C/52239/2019
analog signals into digital signals and thereafter transmits the signals
back to the Bluetooth module of mobile phone (in radio frequency
signal form) or to the micro controller (brain) of the car infotainment
system (in electric signal form). For any product to be classifiable
under the sub-heading 8517 62, it should receive, convert, and
transmit voice, images and other data. The Bluetooth module receives,
transmits and converts data, voice, etc. 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 8517 62 and consequently deserves to be classified
it under CTH 8517 62 90.
17. Even after holding that Bluetooth module is not a 'part' as it can
be used in many devices like printers, computers, hard drive, compact
disc, digital camera etc., and all these devices can work independently
without Bluetooth module, the Commissioner (Appeals) still accepted
the contention of the Department that it would be classifiable under
13
C/52239/2019
CTH 8529 90 90 on the basis of Section Note 2(b) for the reason that
Bluetooth module is principally used with car infotainment system.
18. There is no challenge by the Department to the finding recorded
by the Commissioner (Appeals) that Bluetooth module is not a 'part' of
car infotainment systems as the Department has not filed any cross-
appeal. It is, therefore, not possible to accept the contention of the
learned Authorized Representative of the Department that despite a
specific finding having been recorded by the Commissioner (Appeals)
that the Bluetooth module is not a 'part', of car infotainment systems,
it should still be considered as a 'part' because of the description given
by the appellant in the Bill of Entry.
19. Chapter Note 2 deals with classification of parts of machines and
it is reproduced below:
SECTION XVI
"Notes:
1. xxxxxxx
2. Subject to Note 1 to this Section, Note 1 to Chapter
84 and to Note 1 to Chapter 85, parts of machines (not
being parts of the articles of heading 8484, 8544, 8545,
8546 or 8547) are to be classified according to the
following rules:
(a) parts which are goods included in any of the
headings of Chapter 84 or 85 (other than headings
8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522,
8529, 8538 and 8548) are in all cases to be classified in
their respective headings;
(b) other parts, if suitable for use solely or principally
with a particular kind of machine, or with a number of
machines of the same heading (including a machine of
heading 8479 or 8543) are to be classified with the
machines of that kind or in heading 8409, 8431, 8448,
8466, 8473, 8503, 8522, 8529 or 8538 as appropriate.
However, parts which are equally suitable for use
principally with the goods of headings 8517 and 8525 to
8528 are to be classified in heading 8517;
(c) all other parts are to be classified in heading 8409,
8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as
appropriate or, failing that, in heading 8487 or 8548."
14
C/52239/2019
20. Thus, having held that Bluetooth module is not a part of
machine, there was really no occasion for the Commissioner (Appeals)
to examine Section Note 2.
21. Even otherwise, Section Note 2(b) of Section XVI covers parts
which are not covered under Section Note 2(a) and provides that such
parts, if suitable for use solely or principally with a particular kind of
machine, are to be classified with the machine of that kind or in
Heading 8529, 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or
8538. The order passed by the Commissioner (Appeals) completely
ignores Section Note 2(a). It cannot be doubted that clauses under
Section Note 2 are to be sequentially applied and, therefore, Section
Note 2(a) has to be first considered. Since Section Note 2(a) is
applicable, the Commissioner (Appeals) could not have applied Section
Note 2(b).
22. The submission of learned Authorized Representative of the
Department that since the Commissioner (Appeals) has classified
Bluetooth module under Heading 8529 it should be presumed that he
has considered it to be a 'part' cannot also be accepted in view of the
specific finding recorded by the Commissioner (Appeals) that Bluetooth
module is not a 'part'. An order has to be sustained on the basis of the
findings given thereunder and not on what could be the intention of
the person passing the order in view of the judgment of the Supreme
Court in Mohindhr Singh Gill.
23. Once Bluetooth module is classified under CTH 8517 62 90, it
would not be necessary to examine the contention advanced by the
learned counsel for the appellant that even if Bluetooth module is
considered to be a 'part' of car infotainment systems, it would still
merit classification under CTH 8517 62 90.
15
C/52239/2019
24. Learned Authorized Representative of the Department has
placed reliance upon the judgment of the Supreme Court in
Westinghouse. This judgment is regarding classification of 'parts'
whereas, as noticed above, the Bluetooth module cannot be
considered as a 'part'. Even otherwise, the dispute in Westinghouse
was regarding two Chapters, namely Chapter 85 and 86. In the
present appeal the dispute is between two Headings of the same
Chapter and not between two Chapters. The judgment is also in
connection with Section Note 2 to Section XVII, which covers Chapter
86. Section Note 2 to Section XVI and Section Note 2 to Section XVII
are different.
25. Before concluding, it is necessary to take note of the order
passed by the Commissioner (Appeals). It can clearly be seen from his
order dated 23.05.2019 that he has at many places merely reproduced
the order passed by the Assistant Commissioner, without recording his
independent findings and to highlight this position, the two orders can
be compared:
Order of Assistant Commissioner Order of Commissioner (Appeals)
1. The basic function of Bluetooth is to The basic function of Bluetooth is to
enable exchange of data between two enable exchange of data between two
Bluetooth enabled device within a Bluetooth enabled devices within a
wired or wireless network. It's wired or wireless network. It's
application can be used for the application can be used for the
following devices (a) Printer (b) following devices (a) Printer (b)
Computers (c) Hard Drive (d) Computers (c) Hard Drive (d)
Keyboard/Mouse (e) Speaker (f) Keyboard/Mouse (e) Speaker (f)
Compact Disc (g) Digital Camera (h) Compact Disc (g) Digital Camera (h)
Global Positioning System (i) Clock Global Positioning System (i) Clock
Radio (j) Video Monitors/Televisions Radio (j) Video Monitors/Televisions
(k) Video game Machines. (k) Video game Machines. As
As Bluetooth in used in so many Bluetooth in used in so many devices
devices as enumerated above and all as enumerated above and all these
these devices can work independently devices can work independently
without having Bluetooth Chip in these without having Bluetooth Chip in
devices, so it cannot be termed as these devices, so it cannot be termed
part as part.
16
C/52239/2019
2. Admittedly, all Bluetooth compliant Admittedly, all Bluetooth compliant
devices can function without having devices can function without having
Bluetooth Module. In the same Bluetooth Module. In the same
judgment accessory has been defined judgment accessory has been defined
as "Accessory is supplementary or as "Accessory is supplementary or
subordinate in nature and need not be subordinate in nature and need not be
essential for actual functioning of the essential for actual functioning of the
product. Here the Bluetooth can be product. Here the Bluetooth can be
correctly termed as an accessory as it correctly termed as an accessory as it
facilitates exchange of data between facilitates exchange of data between
two devices upto a defined limit of two devices upto a defined limit of
around 10 mtrs. around 10 mtrs.
3. The said party's submission that I find that Bluetooth Module will attract
Bluetooth Module will attract classification classification under 85176290 in view of
under 85176290 in view of the chapter the chapter note 2 (b) to annexed to
note 2 (b) to annexed to section XVI of section XVI of the customs tarill, Wherein
the customs tariff, Wherein it states that it states that "other parts if suitable for
"other parts if suitable for use "other use "other parts, if suitable for use solely
parts, if suitable for use solely or or principally with a particular kind of
principally with a particular kind of machine, or with a number of machines
machine, or with a number of machines of the same heading (including a machine
of the same heading (including a machine of heading 8479 or 8543) are to be
of heading 8479 or 8543) are to be classified with the machines of that kind
classified with the machines of that kind or in heading 8409, 8431, 8448, 8466,
or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as
8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are
appropriate. However, parts which are equally suitable for use principally with
equally suitable for use principally with the goods of heading 8517 and 8525 to
the goods of heading 8517 and 8525 to 8528 are to be classified in heading
8528 are to be classified in heading 8517", are to be classified in heading
8517", are to be classified in heading 8517. As Bluetooth Module does not come
8517. As Bluetooth Module does not come under the ambit of parts and duly
under the gambit of parts and duly acknowledged by the importer and they
acknowledged by the importer and they have supported this argument by citing
have supported this argument by citing the judgment of Commissioner of Central
the judgment of Commissioner of Central Excise Delhi Versus Insulation Electrical
Excise Delhi Versus Insulation Electrical Private Limited, 2008 (224) ELT 512
Private Limited, 2008 (224) ELT 512 (SC).
(SC).
4. In view of the foregoing discussions, it is In view of the foregoing discussions, it is
apparent that Bluetooth Module cannot apparent that Bluetooth Module cannot be
be termed as part of car Infotainment termed as part of car Infotainment
systems. It can be termed as an systems. It can be termed as an
apparatus or machine. As the apparatus or machine. As the
apparatus/machine do not specifically apparatus/machine do not specifically fall
fall under any chapter heading, it will under any chapter heading, it will attract
attract can be safely classification under its classification under CTH 8543, which
CTH 8543, which states that "Electric states that "Electric Machine and
Machine and apparatus having individual apparatus having individual functions, not
functions, not specified or included specified or included elsewhere in the
elsewhere in the chapter" and CTH chapter" and CTH 85437099 is more akin
85437099 is more akin to its to its classification. Further, as per note
classification. Further, as per note 2(b) 2(b) of chapter note under section XVI,
of chapter note under section XVI, wherein it states that "other parts, if
wherein it states that "other parts, if suitable for use solely or principally with a
suitable for use solely or principally with particular kind of machine, or with a
a particular kind of machine, or with a number of machine of the same heading
number of machine of the same heading (including a machine of heading 8479 or
(including a machine of heading 8479 or 8543) are to be classified with the
8543) are to be classified with the machine of that kind. Since Bluetooth
machine of that kind. Since Bluetooth Module is principally used in car
Module is principally used in car infotainment system, as declared by the
infotainment system, as declared by the Importer, it will merit classification under
Importer, it will merit classification CTH 85299090.
under CTH 85299090."
17
C/52239/2019
26. As an appellate authority, the Commissioner (Appeals) should
have considered the factual and legal aspects and then arrived at a
decision but it clearly transpires that the Commissioner (Appeals)
simply reproduced the findings of the Assistant Commissioner.
27. The observations made by the Commissioner (Appeals) at serial
no. 3 in the aforesaid chart are also disturbing. While the Assistant
Commissioner noted the submission advanced by the appellant that
Bluetooth module will attract classification under 8517 62 90, the
Commissioner (Appeals) recorded a finding that the Bluetooth module
will attract classification under 8517 62 90, little realizing that this was
infact the classification sought by the appellant. Even otherwise, this
portion of the order passed by the Assistant Commissioner has many
mistakes, but the Commissioner (Appeals) has reproduced the
mistakes also.
28. In view of the aforesaid discussion, Bluetooth module deserves
classification under CTH 8517 62 90 as contended by the appellant and
not under CTH 8529 90 90 as contended by the Department.
29. The order dated 23.05.2019 passed by the Commissioner
(Appeals), therefore, cannot be sustained and is set aside. The appeal
is, accordingly, allowed.
(Order pronounced on 03.08.2021)
(JUSTICE DILIP GUPTA)
PRESIDENT
(P V SUBBA RAO)
MEMBER (TECHNICAL)
Shreya/JB
18
C/52239/2019
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH
CUSTOMS APPEAL NO. 52239 OF 2019
(Arising out of Order-in-Appeal No. CC(A)CUS/D-II/PPG-161/2019-20 dated 23.05.2019
passed by Commissioner of Customs (Appeal), New Delhi)
Minda D-Ten Private Limited ...Appellant
Plot No. 383, Industrial Growth Center,
Phase-II, Sectore-3, Bawal,
District- Rewari, Haryana - 123501
VERSUS
Commissioner of Customs (Import), ...Respondent
New Customs House,
New Delhi
APPEARANCE:
Shri B.L. Narasimhan, Shri Rachit Jain, Ms. Jyoti Pal and Ms. Ashwini Bhatiya,
Advocates for the Appellant
Shri Rakesh Kumar, Authorized Representative of the Department
CORAM:
HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT
HON'BLE MR. P. ANJANI KUMAR, MEMBER (TECHNICAL)
Date of Decision: August 03, 2021
ORDER
Order pronounced.
(JUSTICE DILIP GUPTA) PRESIDENT (P. ANJANI KUMAR) MEMBER (TECHNICAL) Shreya