Minda D-Ten Private Limited Vs Commissioner of Customs (Import) (CESTAT Delhi)
The Bluetooth module receives radio frequency analog signals from other devices (like mobile phone), converts the radio frequency 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.
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 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.
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.
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.
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.
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.
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.
FULL TEXT OF THE CESTAT DELHI ORDER
Minda D-Ten India Private Limited1 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 Heading3 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.
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 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:
