Amazon Echo devices not just speakers or monitors, they are convergence devices: Delhi High Court

The Delhi High Court recently ruled that Amazon’s Echo Dot devices cannot be termed as mere speakers and its Echo Show devices are not just monitors [Amazon Wholesale India Private Limited v. Customs Authority Of Advance Ruling, New Delhi & Anr]..These devices are convergence devices which perform a host of other functions thereby being eligible for certain Customs Duty exemptions available to convergence devices, the Court said.Justices Yashwant Varma and Dharmesh Sharma made the observation while accepting claim by Amazon for certain exemptions from the customs duty.The Court agreed with Amazon's stance that eleven of its devices belonging to the Echo Dot and Show range fell under the Customs Tariff Heading (CTH) 8517 which includes “apparatus for transmission or reception of voice, images or other data including apparatus for communication in a wired or wireless network.".The Court passed the ruling while setting aside a ruling by the Customs Authority for Advance Rulings (AAR). The AAR had denied Amazon’s claim for the categorisation of its devices under CTH 8517.The High Court, however, opined that AAR had taken an “extremely narrow if not myopic view” while considering the principal function of the devices.The Court concluded that the "soul" of these devices was their ability to act “as means for the transmission and reception of data” and to perform multiple tasks through the recognition of voice commands and by interacting with Amazon services in real time. .It found that the Echo devices fell within the category of machines meant for the “reception, conversion and transmission or regeneration of voice or other data."It disagreed with the AAR’s view that the description of these devices could be confined to loudspeakers and displays or monitors. The Court reasoned that such entries would not cover convergence devices. The bench also rejected the AAR’s conclusion that in absence of the internet, the devices would function merely as speakers. “The aforesaid line of reasoning is rendered wholly untenable when one bears in mind the indubitable fact that the subject devices were not intended to be used merely as speakers but were embodiments of 'technological convergence' representing a combination of technologies enabling the holder thereof to replace multiple devices with one gadget or tool for the purposes of communication, information and entertainment," the Court said. .On Echo Show devices, the Court particularly noted that they could be used not only for playing video content, but also for video calling and messaging.Mere monitors cannot possibly perform those functions nor could such attributes be said to be found in them, the Court added. The Court, therefore, concluded that AAR’s view on the categorization of these devices cannot be upheld. Hence, it ruled that the eleven devices in question would correctly fall under CTH 8517..“Echo Show 5, Echo Dot 4th Generation and Echo Dot 4th Generation with Clock are held eligible to claim exemptions in accordance with SI. No. 20 of the Notification dated 30 June 2017, as amended vide Notification dated 01 February 2021,” the Court held..Advocates V Lakshmikumaran, Yogendra Aldak, Jyoti Pal, Kunal Kapoor and Anjali Singh appeared for Amazon. Senior standing counsel Satish Kumar along with advocate Dhruv appeared for the Customs AAR..[Read Judgment]