In re Amazon Seller Services Private Limited (CAAR Mumbai)
CAAR Mumbai held that Amazon Fire TV Stick/HDMI digital media receiver with dual core processor, dedicated Videocore4 GPU, 1 GB of memory and 8 GB of storage having a dual band, duel antenna 802.11 AC Wi-Fi is classifiable under CTH 8517 62 90 of the First schedule of the Customs Tariff Act, 1975.
FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI
1. M/s. Amazon Seller Services Private Limited had proposed to import Fire TV Stick. The application of advance ruling, seeking the classification of the said device, was received in the secretariat of the erstwhile Authority for Advance Rulings (Central Excise, Customs and Service Tax), New Delhi on 14.07.2016. However, since no rulings were issued by the said authority, the pending application was transferred to the Customs Authority for Advance Rulings, Mumbai in February, 2021. Communications were sent to the applicant from the secretariat of the CAAR, Mumbai to inform whether they are still desirous of receiving an advance ruling in respect of the pending application. The applicant, vide their communication dated 25.022021, informed that they are still interested in receiving the adv–ance ruling and also that they will submit the application in the revised format in due course. Thereafter, the said application was c-mailed by the applicant in July, 2021, which was followed by physical submission of the application in August, 2021.
2. In the said application, the applicant has expressed their desire to import the subject goods through air cargo complexes of New Delhi, Mumbai, Chennai and Bengali as well as the sea ports of Chennai and Nhava Sheva, Raigad as envisaged under section 28-1 (1) of the Customs Act, 1962 read with the relevant regulations in force.
3. The comments of the aforesaid six Principal Commissioners/Commissioners of Customs in respect of the original application regarding classification of Fire TV Stick filed before the erstwhile AAR are on record. However, after receipt of fresh application in light of the Customs Authority for Advance Rulings Regulations, 2021, letters were again sent to the said Commissionerates. The comments, which were received from the Commissionerates, were further shared with the applicant.
4. The applicant has informed that a show cause notice No. S/16-Audit- 1626/2018-19 NCH, dated 25.07.2019 was issued by the Commissioner of Customs (Audit), Mumbai Customs Zone-1 pertaining to classification of Fire TV Stick under section 28(4) read with section 124 of the Customs Act, 1962 arising out of short levied/ short paid Customs duty due to “wrongful classification of goods” (i e Amazon Fire TV Stick/HDMI digital media receiver Model No. LY73PR & E9L29Y) under CTH 8517 62 90 instead of 8528 71 00 and –wrongful claim of lower rate of IGST” (i.e. 18% instead of 28%).
4.1. In light of the pending application before the Advance Ruling Authority, the applicant approached the Hon’ble Bombay High Court in Writ Petition No. WP/47412020 seeking stay on adjudication of the above mentioned show cause notice. The Hon’ble High Court granted ad-interim stay vide its order dated 24.02.2020.
4.2 From the information provided by the applicant and based on documents on record it is observed that the applicant has claimed that a Fire TV stick is a HDMI digital media receiver designed to stream digital audio/video content to high- definition television. This device is a dual-core processor with a dedicated Videocore4 GPU,1 GB of memory and 8 GB of storage having a dual band, duel antenna 802.11 AC Wi-Fi. 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 interne_ The user can also play games, music and download additional applications. The applicant has further stated that the source of receiving signals by Fire TV Stick is an Internet. Moreover, Fire TV sticks are not capable of receiving signals from satellite/cable/terrestrial source to convert them in the form suitable for display on the television. The Fire TV sticks do not support cellular services. They require an interne connection to perform their functions i.e. they do not have a modem incorporated in them.
5. The applicant was heard on 23.11.2021. Sh. Lakshmi Kumaran, advocate, representing the applicant, argued that since their petition before the High Court is only for staying the decision in the show cause notice issued by the Commissioner (Audit) while their application for advance ruling is pending, there is no bar in proceeding with the pending advance ruling application. However, it was pointed out to the representative of the applicant that in the pending writ petition the erstwhile AAR was also a respondent, and therefore, no decision on pending advance ruling application is possible, unless the Hon’ble High Court finally disposes of the writ petition or the applicant withdraws the writ petition.
6. Sh. Lakshmi Kumaran stated that they will withdraw their writ petition before the Hon’ble High Court and inform the Secretariat of the CAAR, Mumbai. Subsequently, Vide Order No. CAAR/Mum/ARC/01/2021 dated 13.12.2021, the secretary to the CAAR, Mumbai was directed to place this matter for decision only when one of the two scenarios outlined in the preceding paragraphs takes place.
7. Thereafter, the applicant informed the secretariat of CAAR, Mumbai vide email dated 23.11.2022 enclosing therewith the final order of the Hon’ble Bombay High Court dated 09.11.2022 the disposal of a Writ Petition no. WP/474/2020, whereby the CAAR, Mumbai has been directed to decide the said application within twelve weeks. The Hon’ble Bombay High Court held:
“By consent and keeping open all rights and contentions of the parties and in view of what is recorded by this Court in its order dated 24th February 2020, the following order is passed:
(a) the show cause notice dated 25th July 2019 is hereby quashed and set aside;
(b) the Authority for Advance Ruling shall consider petitioner’s application filed on 14th July 2016 and dispose the same in accordance with law within twelve weeks from today;
(c) if the Authority for Advance Ruling holds against petitioner, respondent no.2 may take such further steps as required in accordance with law including issuance of any show cause notice within eight weeks of passing their ruling.”
Copy of this order was e mailed to the Commissioner (Audit), Customs, Mumbai Zone -1 immediately.
8. Subsequently, the applicant was heard on 30.11.2022. Ms. Jyoti Pal and Mr. Prasad Salvi, advocates from M/s Lakshmi Kumaran and Sridharan, Mr. Anand Tripurari and Jeshwin Immanuel from the applicant M/s. Amazon Seller Services Private Limited appeared and explained order of Hon’ble High Court of Bombay, previous CAAR rulings and technical difference distinguishing CTII 8517 from CTH 8528 of Customs Tariff Act, 1975. They also invited attention to their earlier submissions in support of their application. Based on their oral as well as written submissions they requested to pass a ruling within the time frame given by the Horeble High Court of Bombay. Applicant’s CAAR-1 application along with enclosures describes in details the product specifications and product functioning.
9. I have gone through the records of the case and written as well as oral submissions made by the applicant. The applicant has filed the advance ruling application for six different ports/ Jurisdictional Commissioners namely:
a) The Pr. Commissioner of Customs, Air Cargo Complex & Airport, Air India SATS Air Freight Station Terminal, Devanahalli, Bengaluru
b) The Pr. Commissioner of Customs, Chennai VII (Air Cargo Commissionerate), New Custom House, Air Cargo Complex, Meenambakkam
c) The Commissioner of Customs, Chennai II (Import Commissionerate), Custom House,60, Rajaji Salai, Chennai
d) The Commissioner of Customs. Air Cargo (Import), New Customs House, Near I.G.I. Airport, New Delhi
e) The Pr. Commissioner of Customs (III), (Import), Air Cargo Complex, Sahar, Andheri (East), Mumbai
f) The Commissioner of Customs (Nhava Sheva -V), Jawaharlal Nehru Customs House, Nhava Sheva, Tal Uran, District Raigad, Maharashtra — 400707;
10. I observed that the comments were received from the jurisdictional Pr. Commissioners/Commissioners and the same were forwarded to the applicant for submitting the applicant’s response.
a) Comments received from the Pr. Commissioner of Customs, ACC, Bengaluru has opined for the Fire TV stick to be classified under tariff heading 85287390. They have supported their claim by stating that:
“Fire TV Stick can be used only when it is connected to the HDMI port of the HD Television and the programmes can be viewed with internet connection via Wifi and programmes to be seen can be controlled with the remote, the product is rightly classifiable under Chapter Heading No.85287390 (Other), in view of the exclusion of the transmission or reception apparatus of heading 8528 in Chapter Heading 8517 “
b) Comments received from the Pr. Commissioner of Customs, Chennai VII (Air Cargo Commissionerate), has suggested CU-18528711 by stating that:
“Fire TV Stick, is a portable device which connects to HDMI port of a television and thereafter the user get access to television episodes and movies and can also play games and music. Further, this product is supported with remote controller to change programmes. No other reception apparatus is required other than this product to view the programmes on television. Therefore, it appears that the product under reference, Fire TV Stick, is a new technological development of reception apparatus for Television. All reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus: Not designed to incorporate a video display or screen are merit classifiable under CTH 8528 71 00”
c) The Commissioner of Customs, Chennai II has suggested classification under CTH 85176290 by offering following comments:
