2023 (12) TMI 1490 - AAR - Customs

MEMS microphone classification under Customs Tariff, not an integrated circuit or MCO and therefore classifiable under Sub-heading 85181000

Advance ruling application addressed classification of MEMS microphones. Applying the General Rules for Interpretation of the Harmonized System, the ... Classification of goods under the Customs Tariff - classification of Micro Electro Mechanical System (MEMS) Microphone - Multi-component integrated circuits (MCOs) / Electronic integrated circuits - Precedence of headings 85.41 and 85.42 over other headings - General Rules for the Interpretation of the Harmonized System (GRI) Rule 1 - Maintainability of advance ruling applications where goods have been earlier imported Section 28E(b) - Advance ruling under section 28-H of the Customs Act, 1962 - maintainability of the application in light of the prior imports of the goods in question - HELD THAT:- It is noted that the present application has posed a question for advance ruling related to the on-going activity, however, I note that CAAR, New Delhi, had already held that, 'though the application for advance ruling relates to the on-going activity. However, a ruling by the Authority shall impart certainty to the issue of appropriate classification, provided that the jurisdiction of this Authority is not ousted by proviso to section 28-1 (2) of the Customs Act, 1962.'. Reiterating the earlier stand taken by the CAAR, New Delhi, in the interest of certainty in the matter of classification of goods, I intend to issue ruling in the instant application, recognising the fact that the subject goods had earlier been imported by the applicant. The MEMS microphones come in IC-like packages for surface mount assembly. However, they are not integrated circuit of heading 8542. Thus, the rulings and judgements quoted by the applicant, referring to devices performing multiple functions or where the goods in questions are integrated circuit in itself, are not applicable in the instant case. Though, it has been stated that last part of the Note 12 to the Chapter 85 states that, for classification of the articles defined in the above-mentioned note, heading 8542 shall take precedence over any other heading in the nomenclature and referring to the Explanatory Notes (Volume 5) to the Harmonized Commodity Description and Coding System (2022, Edition Seventh) and it is also stated that the above explanation clearly states that the MCOs can be used in variety of applications but still would be covered under the CTH 8542 if they fulfil the meaning of MCO provided in the Explanatory Notes but, the applicant has missed an important provision under the said explanatory notes of heading 8542 wherein, it is inter-alia unambiguously stated that all separate (tradeable) units, which are not classifiable under 8504, 8532, 8533, 8541 or which do not fall under the definition of silicon based sensors, actuators, oscillators and combination thereof are excluded from the definition of an MCO. Thus, the product in question which appears to be an assembly, constitute a complete machine or device i.e microphone, hence, it merits classification as a complete machine or device. Without going into the discussion as to whether end-use is relevant for classification or not, it is pertinent to mention that the applicant has stated that in the present case, the product is used as microphone component for installation onto a PCB of mobile phones and other electronic devices. Lastly, I note that rule 1 of the GRI lays down that the titles of Sections, Chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter notes. Further, rule 6 of GRI provides that for legal purposes, the classification of goods in the sub-heading of a heading shall be determined according to the terms of those sub-headings. Moreover, since the applicant has repeatedly mentioned that the product in question perform the function of a microphone and the since Micro-Electro Mechanical Systems, or MEMS is a technology and also a MEMS (micro-electromechanical system) microphone is a miniature machine that has both mechanical and electronic components. Thus, by application of rule 1 and 6 of GRI, the product under consideration i.e. MEMS Microphone is classifiable under Sub-heading 85181000 of the First Schedule to the Customs Tariff Act, 1975. Issues: (i) Whether the product described as a MEMS microphone is classifiable under Tariff Item 85423900 as an electronic integrated circuit / multi-component integrated circuit (MCO) or under Tariff Item 85181000 as a microphone.Analysis: The Authority examined the product's construction, technical literature, HS Explanatory Notes and Chapter Notes to Chapter 85, and competing decisions cited by the applicant and the department. The applicant's submission that the product is a multi-component integrated circuit (MCO) composed of silicon-based MEMS sensor, ASIC amplifier, PCB substrate and package was considered against the Explanatory Notes' definition and exclusions for MCOs and electronic integrated circuits. The General Rules for Interpretation (GRI), including Rule 1 and Rule 6, and the precedence of headings set out in the Chapter Notes were applied to determine whether the product falls within the terms of heading 85.42 or is more specifically described by heading 85.18. The Authority also noted technical descriptions in public-domain sources showing that MEMS microphones are miniature machines combining mechanical and electronic components and observed that the product functions as a complete microphone device intended for use as such. The departmental comments relying on GRI 3(a) and the specific description of heading 85.18 were considered, and the Authority applied GRI 1 and GRI 6 to determine classification at the sub-heading level.Conclusion: The product is classifiable under Tariff Item 85181000 (Microphones and stands therefor). The applicant's request to classify the goods under Tariff Item 85423900 is rejected; classification under 85181000 is affirmed in favour of Revenue.