New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (3) TMI 5 - CESTAT BANGALORE

2016 (3) TMI 5 - CESTAT BANGALORE - 2016 (337) E.L.T. 65 (Tri. - Bang.) - Classification of import of Multimedia Speakers - Appellant claimed the classification of the same as falling under Customs Tariff Heading 8518 22 00 while the Revenue’s contention is to classify it under Chapter Heading 8519 81 00 where speakers imported were having additional functions of USB Port with playback port and under 8527 99 19 where speakers imported were having the facility of FM Radio along with USB port play .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e huge speaker into a FM radio. Even going by the common parlance test, nobody would buy a huge speaker for the purpose of FM radio. - Also, the goods in question are speakers with added function, as such the main role of the item in question remains amplifying the sound received by it either from outside source or from inbuilt feature. As such, going by the Interpretative Rules and Section note 3 to Section XVI, the criteria for classifying the product is the principal and the main function .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he invoices raised by them against the customers and the statement of Service Manager of the assessee. Examination of these documents shows that goods are primarily sold as speakers. Even the brochures placed on record indicate that the goods are being traded as speakers only and not as either FM radio or the sound reproduction system. - This view is also strengthened by the decision of the Hon’ble Supreme Court in the case of Xerox India Ltd. vs. Commissioner of Customs, Mumbai: 2010 (11) T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

estion was printing. - Decided in favor of assessee. - C/20139/2014-DB, C/20140/2014-DB, C/20141/2014-DB - Final Order No. 20239-20241 / 2016 - Dated:- 9-2-2016 - SMT. ARCHANA WADHWA, JUDICIAL MEMBER AND SHRI ASHOK K. ARYA, TECHNICAL MEMBER For the Petitioner : Mr. G. Shivadass, Advocate For the Respondent : Mr. Ajay Saxena, Commissioner (AR) ORDER PER : ARCHANA WADHWA All the three appeals have been decided by a common order as the issue involved is identical. 2. After hearing both the sides .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ustoms Duty and 12% Countervailing Duty (CVD). However, the Revenue s contention is that the said Multimedia Speakers , being imported by the appellant are properly classifiable under Chapter Heading 8519 81 00 and 8527 99 19 depending upon whether the same are having features of FM Radio, etc. Though the Basic Customs Duty in respect of the two contending entries is the same but there is a difference of CVD, thus resulting in excess duty liability against the assessee. 2.1 The appellant was imp .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

g with USB port playback, which the Revenue intends to classify it under Chapter Heading 8527. 2.2 For better appreciation of contending entries, the same are being reproduced below: 8518 Microphones and stands therefor; loudspeakers, whether or not mounted in their enclosures, headphones and earphones, whether or not combined with a microphone, and sets consisting of a microphone and one or more loudspeakers, audio-frequency electric amplifiers; electric sound amplifier set. 8518 10 00 … .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nt as under: (i) CTH 8518 22: Speakers having USB port but with no USB playback or Radio (ii) CTH 8519 81: Speakers having USB port with USB playback but without radios (iii) CTH 8527 99: Speaks having radio (irrespective of whether they were having USB playback facility or not) It is not disputed that what is being imported by the appellant is a speaker. However, inasmuch as some of the speakers have additional functions of USB playback as also of FM radio, the same are being held as other prod .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

an be operated from the same speaker. It is their contention that such inbuilt facilities given in the speakers will not convert the speakers into either FM radio or reproducing apparatus. Reading of the above entries, according to the learned advocate, clearly shows that items intended to be covered by Chapter Heading 8519 and 8527 are entirely different products. For the above propositions, he also relies upon various Circulars of the Board as also to various decisions. Learned advocate submit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

aid proposition, he also refers to various decisions laying that Circulars issued by the Board cannot overrule statutory provisions. 3. Countering the arguments, learned Commissioner (AR) appearing for the Revenue draws our attention to the impugned orders passed by the authorities below and submits that the goods imported by the appellant are not speakers simpliciter but as they contain additional feature of having a USB port with playback and a radio facility, it has to be held that they canno .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f Interpretation, the speakers having USB port or radio are required to be classified under chapter Heading 8519 and 8527 as held by the lower authorities. 4. We have considered the submissions made by both the sides. We have also gone through the contending tariff entries which stand reproduced by us in the preceding paragraphs. There is no dispute on the facts that some of the speakers being imported by the appellant have USB port with USB playback in addition and some of them have the facilit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

However, wherever the speakers have an additional facility of USB port, which has been explained to us as a facility wherein a pen drive can be inserted and the sound recorded in the pen drive can be amplified by the speaker, Heading 8519 covers Sound recording or reproducing apparatus . The question which is required to be decided is as to whether introducing such facility of USB port for USB playback is otherwise admittedly speaker can be considered to be a reproducing apparatus or not. The r .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

housing . The additional feature of FM radio in the speaker, in our opinion, would again not convert the huge speaker into a FM radio. Even going by the common parlance test, nobody would buy a huge speaker for the purpose of FM radio. 4.1 At this stage, we may advert to the Circular No.27/2013-Cus. dated 1.8.2013 which alone stands relied upon by the lower authorities for coming to the conclusion against the assessee. The said circular stands given by the Ministry of Finance on the representat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sets consisting of a microphone and one or more loudspeakers: audio-frequency electric amplifiers: electric sound amplifier sets; 8519 - Sound recording or reproducing apparatus; 8527 - Reception apparatus for radio-broadcasting whether or not combined, in the same housing, with sound recording or reproducing apparatus or a clock. 4. The view that in case of a multifunction speaker system , the reception apparatus for radio-broadcasting (heading 8527) or reproduction function of sound as provide .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cation of goods is to be determined by application of the General Rules for the Interpretation (GRIs) of the First Schedule to the Customs Tariff Act (CTA), 1975. GRI 1 requires that, in classifying articles, for legal purpose it shall be determined according to the terms of the headings and any relative Section or Chapter Notes,.. . Hence, all relevant legal texts must be considered. In this regard, Note 3 to Section XVI stipulates that, unless the context otherwise requires, composite machines .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in heading 8518, by application of General Rules 1. Speakers classified under heading 8518 include both passive speakers and active speakers. Active speakers, like many subwoofers, contain a built-in audio amplifier. The subheading under which speakers are classified depends on the number of drive units - the actual loudspeaker cones or ribbons - in each cabinet or enclosure. Speakers with a single drive unit in each cabinet are classified under subheading 851821. Speakers with more than one dr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ording or reproducing apparatus : Other apparatus : Using magnetic, optical or semiconductor media : Other : Other. (c) Speaker with USB port having FM radio but without USB playback the principal function of the device is imparted by Radio (reception apparatus for radio-broadcasting) and hence the multifunction speaker system classifiable under subheading 852799 by virtue of General Rules 1, Note 3 to Section XVI and 6. (d) Speaker with FM, USB port and USB playback , if it is held that the pri .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ection XVI, 3(c), and 6. As is seen from the above, the products considered in the said circular are identical to the products being imported by the assessee. For arriving at the conclusion that the speaker with the USB playback would fall under Heading 8519 and the speakers with FM radio would fall under Heading 8527, the Board has referred to the General Rules for the interpretation specifically to Rule 1 and to Section Note 3 to Section XVI. The said Note is to the effect that where composite .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ough with additional facilities, it leads to inevitable conclusion that the main and principal function of the product is as speaker. As such, according to us, even in accordance with Section Note 3 to Section XVI, the items in question have to be classified as speakers as admittedly that is the principal function of the product. The interpretation adopted in the said Circular is, in fact, contrary to the interpretation adopted by the Board in other circulars, though not dealing with the same it .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

et, global positioning system, personal digital assistant (PDA), GPS receivers, camera and many other features. After taking into account the various provisions of law, it was observed as under: 2. It is represented that mobile, cellular handset/telephone has the essential characteristic of transmission and reception apparatus, such as aerial, display screen, keypad and that the same should be of small size so that it can be hand-held and is of lightweight for use as telephone instrument. The ot .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

g of at least a CPU, a key board and a display would be classifiable under sub-heading 8471 30; and radio navigational aid apparatus would be classifiable under sub-heading 852691. From the scope of the headings/sub-headings. Board found that all mobile or cellular telephones whether working on the Global System for Mobile Communications (GSM) standard, Code Division Multiple Access (CDMA) cellular systems, Wireless Local Loop (WLL) or any other Mobile technologies, principally used as communica .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

acilities such as storage of contact information such as phone numbers (dialed/received /missed call), names and addresses, to-do lists, notes, appointments, E-mail address, facility for Short Message Service (SMS)/Multimedia Messaging Service (MMS), calculator, alarm clock, calendar, games and other similar facilities as a standard feature. These facilities assist the user to make calls to desired person, identify the caller, keep track of his calls, send/receive messages and enhanced use of co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ith PCs, function as Global Positioning System (GPS) receiver. These devices work on operating systems (software) like Symbian OS, Microsoft Windows Mobile OS, Linux OS, which are similar to the software used in desktop PC/laptop. All these functionalities grouped as PDA or pocket PC or camera or GPS receiver, contained in cellular/mobile phones, though represent as composite machine, for the purpose of classification, it will be governed by the Customs Tariff Act and the General Rules for Inter .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ction i.e., wireless, in any of the bandwidth allotted to mobile/cellular networks say 850 MHz to 1900 MHz; and ii. consist of transmission and reception hardware such as trans-ceivers, antenna, microphone, speaker, battery, radio-frequency chip, basic band chip, power management chip, Subscriber Identity Module (SIM), International Mobile Equipment Identity (IMEI) or other unique identity for cellular/mobile phone as well as radio-frequency transmission software such as GSM, General Packet Radi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s. In terms of Chapter Note 5D(ii), it is made clear that such mobile phones shall not be classified under Heading 8471 when they are presented separately. In other words, only when such phones are presented along with ADP machine or when composite machines consisting of ADP and mobile phones, where ADP is the principal function, these would be classified under Heading 8471. Further, it is clarified that GPS receivers having phone function that does not operate through any of the cellular networ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ded. Further consumers purchase such cellular phones mainly because of their ability to transmit data in all situation and locations, and at all times, not just in specified places that offer Wireless/ Wi-Fi access. In short, it is found that goods are marketed and consumers purchase a smart phone or other similar cellular/mobile phone, because of the phone function with additional facilities and not for their PDA or GSM capabilities alone; as such these additional facilities will not become ope .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t convert the phones into any other item. As the goods are being marketed and being purchased by the consumers as smart phone or other similar cellular or mobile phone, the additional facilities will not convert the phones into any other item. 4.3 In fact to the same effect is another Circular of the Board being Circular No.20/2013-Cus. dated 14.5.2013 wherein it was held that the classification of the Tablet Computer having an additional facility of connecting to an cellular network to make a v .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

retative Rules have been taken into consideration and the same Section Note 3 to Section XVI stands taken note of and the products have been held to be classifiable according to their main and principal and essential function. We really fail to understand as to how subsequent Circular stands issued wherein a different view stands expressed without assailing the fact that a speaker remains a speaker but with some additional facilities and features. 4.5 We find that the lower authorities have sole .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

E.L.T. 790 (Tri.-LB) has also held that the circulars which are against statutory provisions cannot be followed and cannot allow to override the statutory provisions in case of conflict. 4.6 In fact, there cannot be any dispute about the above legal proposition as it stands fully settled. 4.7 As we have already observed that even the lower authorities are not disputing the fact that the goods in question are speakers with added function, as such the main role of the item in question remains ampl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version