J U D G M E N T

YASHWANT VARMA, J.

1. The appellant herein assails the correctness of the views expressed by the Customs Authority for Advance Rulings1 as embodied in the impugned order dated 20 July 2021 and insofar as it holds that the 11 impugned devices are classifiable under Customs Tariff Heading2 8518 and 8528. The appellant asserts that the devices in question are correctly classifiable under CTH 8517 and more particularly Tariff Entry 8517 62 90 thereof. The 11 devices in question are asserted to fall in the category of “Echo Family Devices” and which

1 AAR 2 CTH

the appellant claims to be essentially communication devices with an inbuilt speaker. From the synopsis which was placed by the appellant before the AAR, the common features and functionality attributes of the Echo Family Devices was described as follows:

 “Common features of Echo Family Devices: The Echo family devices are communication devices with inbuilt speaker with Alexa Technology built in it. They can perform multiple functions, including answering questions, playing music, reading news/ audio- books, providing traffic, weather and other real-time information and controlling smart devices. The Subject Echo Devices do not support cellular services. They require an internet connection to perform their functions i.e. they do not have modem incorporated in them. These devices are Bluetooth enabled, which makes it possible to connect such devices with user's phone and/or external speaker. When the devices are connected to the user's phone, they can play audio stored in the user's phone. When they are connected to an external speaker, the audio output is played through the external speaker instead of the internal speaker. (Page No. 13 -14 of AAR No.5)

 Common functioning of Echo Family Devices: These devices respond to the name “Alexa”, which is commonly known as the 'wake word'. They are pre-programmed to catch the wake word using the microphone in-built to detect the sound. Once the subject devices analyse the wake word, the device becomes operative and starts recording user's voice. When the user finishes speaking, the devices convert this voice/audio data into radio frequency ("RF") signals to be sent to Amazon cloud over the internet. Amazon cloud converts the RF signals into commands that it interprets. Thereafter, it analyses the command and sends back the results over the internet in the form of RF signals to the devices which, in turn, convert the results into electric signals played as audio output on in-built speakers for the user to hear them or on external speakers or on visual output on the display segment for the user to see. The subject devices control the smart appliances in a similar manner. (Page No.

22- 24 of AAR No.5)

(Diagram on control of smart devices on page 24 of AAR No.5)

2. The individual features of the subject devices were also explained by way of a tabular statement and relevant parts whereof are reproduced hereinbelow:

3. The principal question which appears to have arisen for consideration was whether the subject devices were liable to be placed in CTH 8517 and which includes “apparatus for transmission or reception of voice, images or other data including apparatus for communication in a wired or wireless network” or under CTH 8518 which essentially deals with microphones, loudspeakers, headphones and earphones or under CTH 8528 and which is concerned with monitors and projectors, not incorporating television reception apparatus, reception apparatus for television, whether or not incorporating radio broadcast receivers, or sound or video recording or reproducing apparatus.

4. The AAR in terms of the impugned order has held that the principal function of the three Echo 4th generation devices appears to be the reproduction of sound and thus they being liable to be classified as speakers. It has held that while these devices may be voice enabled and compatible in a WI-FI environment, those features would, at best, lead one to recognize