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Synopsis

In a recent verdict, the Delhi High Court determined that Amazon's Echo Dot devices are more than mere speakers, and its Echo Show devices are not simply monitors but qualify as convergence devices.

The ruling came in Amazon's claim seeking exemptions from customs duty for specific devices.

The bench of Justices Yashwant Varma and Dharmesh Sharma accepted Amazon's argument that eleven devices from its Echo Dot and Show range fall under Customs Tariff Heading (CTH) 8517, encompassing "apparatus for transmission or reception of voice, images, or other data, including apparatus for communication in a wired or wireless network."

The high court overturned a previous decision by the Customs Authority for Advance Rulings (AAR), which had rejected Amazon's request to categorize its devices under CTH 8517.

The court criticized the AAR for taking an "extremely narrow, if not myopic, view" regarding the principal function of the devices. It emphasized that the devices' essence lies in their capacity to transmit and receive data, perform tasks through voice commands, and interact with Amazon services in real-time.

Contrary to the AAR's interpretation, the court held that the Echo devices go beyond being simple loudspeakers and displays. It opined that such entries would not encompass convergence devices.

Rejecting the AAR's notion that the devices would function solely as speakers in the absence of the internet, the court clarified that these gadgets represent "technological convergence," combining various technologies for communication, information, and entertainment.

Regarding Echo Show devices, the court highlighted their versatility, not only playing video content but also facilitating video calling and messaging. It asserted that traditional monitors lack such functionalities, leading to the conclusion that the AAR's views on device categorization were untenable.

Conclusively, the court ruled that the eleven devices in question correctly fall under CTH 8517. The specific models—Echo Show 5, Echo Dot 4th Generation, and Echo Dot 4th Generation with Clock—are deemed eligible for exemptions, as per SI. No. 20 of the Notification dated June 30, 2017, as amended by the Notification dated February 1, 2021.

Case Title: Amazon Wholesale India Private Limited v. Customs Authority Of Advance Ruling, New Delhi & Anr.