In re Amazon Wholesale India Private Ltd (CAAR Delhi)
CAAR held that HDMI Digital Media Receiver [model number K2R2TE] is also a reception apparatus for voice, image and other data in a wireless network such as LAN/WAN. It is a reception apparatus with an inbuilt PCB and software containing many applications which run on Over the Internet (OTT) platform and media is streamed to television sets for display. These devices do not receive signals from satellite/ cable/terrestrial to convert them in the form suitable for display on the television screen. These devices are, therefore, correctly classifiable under sub-heading 8517 62 90.
Therefore, rule that following rule 3(b) of the General Rules of Interpretation, the classification of Fire TV Stick 4K Max a kit comprising HDMI Digital Media Receiver [model with Alexa voice remote 3′ Generation [Model No. L5B83G] would be the classification of HDMI Digital Media Receiver that imparts the essential function to the device, and that is heading 8517 and more specifically sub-heading 8517 62 90.
FULL TEXT OF ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, DELHI
M/s Amazon Wholesale India Private Limited. New Delhi, a company having IEC No. 0513081950 and PAN AAMCA0671Q, (M/s Amazon Wholesale, in short) has filed an application dated 10.09.2021 seeking advance ruling on the question of classification of HDMI Digital Media Receiver [model No. K2R2TE] with Alexa Voice remote 3rd Generation Model No. L5B83G as a kit (Fire TV Stick 4K Max) under section 28-H of the Customs Act, 1962 before the Customs Authority for Advance Rulings, New Delhi (CAAR, New Delhi, in short). The application was registered under Serial No. 15/2021-Delhi dated 10.09.2021.
2. On registration of the application, the six concerned Principal Commissioner/Commissioner of Customs, viz. (i) Delhi Air Cargo, (ii) Bangalore Air Cargo, (iii) Chennai Air Cargo, (iv) Chennai Sea, (v) Nhava Sheva/JNCH Sea, and (vi) Mumbai Air cargo were requested vide letter dated 17.09.2021 to furnish their comments in the matter. The comments from all the six concerned Principal Commissioner/Commissioners have been received and discussed later in this order.
3. The applicant vide their written submissions dated 09.09.2021 have described the features and functionality of Fire TV Stick 4K Max and possible CTH classification as under:
3.1 Features: Fire TV Stick 4K Max is a network appliance and an entertainment device, also known as digital media receiver, designed to stream digital audio/video content via the interne. It is an HDMI digital media receiver designed to stream digital audio/video content to high-definition television. It connects to the HDMI port of a television. Once connected, the user gets access to television episodes and movies on Amazon Instant Video, Netflix, HBO NOW, and more via the internet. The user can also play games, music and download additional applications. The source of signals for Fire TV Stick is Internet. The device comes with inbox voice remote control and accessories. Fire TV Stick is not capable of receiving signals from satellite/cable/terrestrial source to convert them in the form suitable for display on the television. Fire TV Stick does not support cellular services. It requires an internet connection to perform the functions, i.e., they do not have modem incorporated in them. The Alexa voice remote is primarily meant to operate the Fire TV Stick via Bluetooth when paired with the remote. Being infrared enabled, the Alexa voice remote can also be used to control other devices (such as compatible TVs, satellite boxes etc.).
3.2 Functioning: A user sends instruction either by way of audio instruction through inbuilt microphone in the remote or by pressing buttons on the remote. Such instructions are to select the programme/movie/any other media that the user wants to watch through Fire TV Stick. These instructions are transmitted wirelessly in the form of RF signals via Bluetooth to the Fire TV Stick and further transmitted to Amazon server on cloud through the medium of internet. The specific signals containing the media requested by the user are received in return by the Fire TV Stick from the Amazon server in the form of RF signals. These signals are processed and converted into a form readable by a television. The processed signals are then transmitted to the connected television so that the requested media can be viewed by the user. Notably, the Fire TV Stick is not capable to receive signals from satellite/ cable/ terrestrial source to convert them in the form suitable for display on television.
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3.3 Classification 01 subject devices:
1.1.1 As noted above, the Fire TV Stick conies along with remote control & accompanying accessories for retail sales. Thus, classification of this set (i.e. Fire TV Stick with remote) is governed by Rule 3(b) of the ( iencral Rules of Interpretation (`G1 Rules’) as given under First Schedule of Customs Tariff Act, 1975. Rule 3(h) of (11 Rules provides that a set of different items will be classified as per that item which gives the ‘essential character’ to the entire set. It is submitted, in the instant case, the accompanying remote is only meant to operate the Fire TV Stick, ‘‘ bile the main functions, viz. streaming audio/video is performed by Fire TV Stick. Therefore, the essential character is given to the set by Fire TV stick only, and the set will be classifiable as per the classification of Fire ‘I’V stick. This view has also been endorsed by CBIC vide Circular No. 01/2013-Cus dated 01.01.2013, whereby it was clarified that the main device (i.e., the device which is to be controlled using the remote control) shall give the essential character to the set consisting of device & remote control.
3.3.2 As is evident from the features & functions of the Fire TV Stick (described in foregoing paras), the said device transmit/receive RF signals carrying the user’s instructions, converts the same into a readable format & transmits the said instructions to the Amazon server. Once the request is processed in the server, the Fire TV Stick receives the results in RF signal format and transmits the same to the television to be displayed on the screen. Therefore, Fire TV Stick is a machine used for reception, conversion & transmission of data, classifiable under sub-heading 8517 62 90. Relevant Tariff Entry is being extracted below, for the ease of reference:
Description of Good%
851″ 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
851 62 – Machines for the reception, conversion and minsmi,sion or regeneration of take, images or other data, including switching and routing apparatus:
85176290 —–Other
3.3.3 Reliance is placed upon the Advance Ruling No. CAAR/Del/Amazon/15/2021 dated 05.07.2021 issued by the Customs Authority for Advance Ruling, New Delhi (`CAAR New Delhi’) in Applicant’s own case, wherein previous models of Fire TV Sticks (Fire TV Stick Lite 1′ Gen & Fire TV Stick 3rd Gen), have been held as classifiable under CTH 8517 62 90, as communication apparatus. Vide the aforesaid ruling, CAAR New Delhi has held that the Fire TV Sticks are reception apparatus for voice/ image & other data in wireless network, thus classifiable under sub-heading 8517 62. Notably, vide the aforesaid ruling it was also observed that since Fire TV Sticks cannot receive satellite/ cable/ terrestrial signals, the same cannot be classified under CTH 8528.
The comments of the concerned Principal Commissioner/Commissioner were shared with the applicant. The suggested classification of the goods under consideration can be summarized as below:
