2026-VIL-755-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs - Classification of Bluetooth Wireless Earphones/Headphones/Neckbands, Eligibility to benefit of Notification No. 57/2017 dated 30.06.2017 - Whether the goods imported by the appellant are classifiable under CTI 8517 62 90 (Telephone sets, including smartphones and other telephones for cellular networks or for other wireless networks) or under CTI 8518 30 00 (Headphones and earphones, whether or not combined with a microphone) – HELD - The primary function of the imported goods is audio reproduction (sound output) and not transmission or reception of voice/data in a wireless network. The Bluetooth connectivity is merely a technology by which the audio signal reaches the device and does not transform the earphones into a "data transmission machine" for classification purposes. Applying the principles laid down by the Supreme Court in Welkin Foods, the CTH 8518 (Headphones and earphones) is a classic eo nomine provision, which names the article, and the Bluetooth/Wireless connectivity is a technology that does not change the essential character of the product. Further, the use of the earphones with mobile phones is the "actual use" that cannot determine the classification, which must be based on the objective characteristics and properties of the goods at the time of import - The impugned order has correctly found that the primary function of the imported goods is audio reproduction (sound output) and not transmission or reception of voice/data in a wireless network. The fact that the earphones contain a Bluetooth chip to receive audio wirelessly does not make them “machines for transmission of data” any more than a radio receiver’s ability to receive electromagnetic waves makes it a “data transmission machine”. This is precisely the principle of the eo nomine identity of a product not being overridden by secondary functional characteristics - The goods imported by the appellant are classifiable under CTI 8518 30 00 and not under CTI 8517 62 90. As the goods are classifiable under CTH 8518 30 00, the demand is upheld for the normal period of limitation under section 28(1) of the Customs Act, but the demand confirmed for the extended period of limitation under section 28(4) is set aside. The imposition of penalty under section 114A is also set aside as the extended period of limitation could not have been invoked – The appeal is partly allowed
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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