Principal function governs tariff classification of a single-drive wireless speaker despite Wi-Fi and Bluetooth connectivity.

A wireless speaker with a single drive unit mounted in an enclosure was classified according to its principal function as a loudspeaker, while Wi Fi and Bluetooth connectivity were treated as ancillary features. Applying Rule 1 of the General Rules for Interpretation and Note 3 to Section XVI, the tariff classification followed the heading describing the product's essential character. The device was therefore placed under Heading 8518 and specifically sub-heading 8518 21 00, consistent with the speaker tariff structure and the cited customs circular.

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Issues: Whether the wireless speaker device Model No. P5B83L is classifiable under sub-heading 8518 21 00, and if not, what is its correct classification.

Analysis: The device was found to be a single loudspeaker with a single drive unit mounted in an enclosure, designed to reproduce sound by converting electrical variations into mechanical vibrations. Its Wi-Fi and Bluetooth connectivity were treated as ancillary features enabling compatibility with Echo devices, while the principal function remained that of a speaker. Applying Rule 1 of the General Rules for the Interpretation of the First Schedule to the Customs Tariff Act, 1975 and Note 3 to Section XVI, classification had to follow the heading describing the principal function. The reasoning was reinforced by the tariff structure for speakers under Heading 8518 and the sub-classification based on the number of drive units, together with Circular No. 27/2013-Cus. dated 01.08.2013.

Conclusion: The device is classifiable under Heading 8518 and more specifically under sub-heading 8518 21 00 of the First Schedule to the Customs Tariff Act, 1975.

Final Conclusion: The advance ruling settled the classification in favour of the applicant by treating the product as a speaker whose essential character and tariff classification are governed by its principal function and single-drive construction.

Ratio Decidendi: For tariff classification, a composite device must be classified according to its principal function, and a single-drive speaker mounted in an enclosure falls under sub-heading 8518 21 00 even if it contains additional connectivity features.

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