Redington Ltd Vs Principal Commissioner of Customs (CESTAT Chennai)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, allowed the appeal filed by the importer and held that Bluetooth wireless headsets, earphones, earbuds, neckbands, and similar devices with mobile telephony functions are classifiable under Customs Tariff Item (CTI) 85176290 as apparatus for the transmission or reception of voice, image, or other data, and not under CTI 85183000 as headphones or earphones.
The dispute arose from imports of JABRA-brand Bluetooth devices made between 28.08.2021 and 30.04.2022. The importer classified the goods under CTI 85176290 and claimed concessional Basic Customs Duty under Notification No. 57/2017-Cus. The Revenue initiated proceedings on the ground that the products were classifiable under CTI 85183000 and accordingly liable to a higher rate of customs duty. A show cause notice was issued proposing reclassification of the goods, recovery of differential customs duty of ₹2.71 crore along with interest, confiscation, and penalties. The Principal Commissioner confirmed the reclassification, duty demand, and interest, leading to the present appeal.
The importer argued that the essential character and principal function of the products must determine classification. It contended that the devices were Bluetooth-enabled communication apparatus capable of transmitting and receiving voice and data through wireless networks and therefore fell under CTI 85176290. Reliance was placed on CBIC Circular No. 36/2013-Cus. dated 05.09.2013, which clarified that Bluetooth wireless headsets with mobile telephony functions are active parts of wireless networks and are classifiable under Heading 8517 rather than Heading 8518.
