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TMI Blog2025 (5) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... rmined the classification of the imported goods as a forestated and confirmed the said duty amount. 2. It is noted from the records that technically the said goods imported under cover of Bills of Entry declared as speaker system have the facility to support USB port, Pen Drive, SD/MMC Card and/or have built in FM, while some of them also have remote features and are capable of operating only with the aid of external source of power. 3. We find that the aforesaid, question of classification of the said products has been examined in extenso and the rival entries discussed threadbare. The subject issue is no more res integra. There are a catena of decisions holding the classification of the impugned goods under heading under CTH -8518. In the case of Logic India Trading Company vs Commissioner of Customs, Cochin(2016(337)ELT 65(Tr-Bang.), as maintained by the Hon'ble Apex Court, reported in 2016(342)ELT A-34(SC), while dealing with similar set of facts, the courts have held the classification of the said goods under CTH 8518.Relevant paras of the said decision are referred to hereunder below: - "4. We have considered the submissions made by both the sides. We have also gone throu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is based upon the outcome of the Conference of Chief Commissioners of Customs and Directorate General on the Customs Tariff and allied matters. Relevant paras of the said circulars are reproduced :- "3. The competing headings are : 8518 - 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 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 provided by USB playback (heading 8519)" is less important than the function of amplification and relay of sound, thereby leading to the inference that such products are classifiable in heading 8518, overlooks the fact that the HS nomenclature only mentions functions and does not refer to the complexity or sophistic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the principal function of the device is imparted by Radio (reception apparatus for radio-broadcasting) and hence the multifunction speaker system classifiable under sub-heading 8527 99 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 principal function of the device is imparted equally by Radio (reception apparatus for radio-broadcasting) and USB playback facility then it would be classified by sequential application of GRI, according to Rule 3(c). According to this rule, of all the possible heading or sub-heading that could equally apply the heading/sub-heading that comes last in numerical order is used to classify the goods. Hence the said product is classifiable under sub-heading 8527 99 by virtue of General Rule 1, Note 3 to Section 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dule to the Customs Tariff, 'telephones for cellular networks or other wireless networks, push-button type or other', would be classifiable under sub-heading 8517 12. Similarly, 'portable automatic data processing machine weighing not more than 10 kgs., consisting 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 8526 91. 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 communication device would get covered under sub-heading 8517 12. These are essentially communication devices working on the basis of towers and base stations arranged into a network of cells, which send and receive radio signals for the cellular/mobile phone for communication. In view of the above, Board clarifies that sub-heading 8517 12 will cover all types of telephones that work on cellular networking technology or other wireless net ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 Radio Service (GPRS) and Enhanced Data rates for GSM Evolution (EDGE) etc., Hence, such cellular/mobile phones remain classified in sub-heading 8517 12, as the principal function of these equipments remain as 'telephony'. 8. It is further explained that cellular/mobile phones can also be employed as data modems to form a wireless access point connecting a personal computer to the Internet. In this use, the mobile phone is providing a gateway between the cellular service providers data network and PCs. 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 network or mobile te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 19-4-2007 and Circular No. 20/2013-Cus., dated 14-5-2013. In the other two circulars, the same Interpretative 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 solely and mainly relied upon the said circular of the Board. It is well settled that the circular issued by the Board are not binding on the Courts, be it judicial or quasi-judicial. Though there are plethora of judgments to that count but one such reference can be made to Hon'ble Supreme Court's decision in the case of CCE, Bhopal v. Minwool Rock Fibres Ltd. - 2012 (278) E.L.T. 581 (S.C.). Further, the Larger Bench of the Tribunal in the case of Bimetal Bearings Ltd. v. CCE, Chennai - 2008 (232) E.L.T. 790 (Tri.-LB) = 2010 (18) S.T.R. 539 (Tribunal-LB) has also held that the circulars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 90, whereas GE contended that the same will be classifiable like any other multimedia speakers under CETH 8518 40 00. For better appreciation of the competing headings, the same are 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 10 Microphones and stands therefor, Loudspeakers, whether or not mounted in their enclosures 8518 21 00 Single loudspeaker, mounted in their enclosures 8518 22 00 Multiple loudspeakers, mounted in the same enclosure 8518 29 00 Other 8518 30 00 Headphones and earphones, whether or not combined with a microphone, and sets consisting of a microphone and one or more loudspeakers 8518 40 00 Audio-frequency electric amplifiers 8518 50 00 Electric sound amplifier sets 8518 90 00 Parts" "8527 Reception apparatus for radio-broadcasting, whether or not combined, in the same housing with sound recording or reproducing apparatus or a clock - Radio-broad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a speaker system. In a plain trade parlance it is clear and apparent that a person intend to buy a multimedia speaker system will consider the impugned product for his requirement. The FM radio is an added, in built feature. As clearly shown in the sales brochure, the main function of the product is being provided by speaker system with sub-woofer. 7. We note that almost similar issue of classification of multimedia speakers having additional function of USB port and FM radio came up for consideration by the Tribunal in Logic India Trading Company - 2016 (337) E.L.T. 65 (Tri. - Bang.). The Tribunal held that the impugned goods are speakers with added function and the main role of the item, in question, remains amplifying the sound received from outside source or from inbuilt feature. Applying the interpretative rules and section note 3 of Section XVI, the Tribunal held that the product should be classified as speakers only. The said decision is affirmed by the Hon'ble Supreme Court in 2016 (342) E.L.T. A34 (S.C.). 5. Apart from the above it would be pertinent to also place on record the Tribunals' findings on the subject matter, in the appellant's own case decided vide Order N ..... X X X X Extracts X X X X X X X X Extracts X X X X
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