Principal function governs tariff classification of multimedia speakers with added USB and FM features as speakers.

Composite goods are to be classified by their principal function, and ancillary features do not change the tariff heading where the essential character remains that of the main article. Multimedia speakers with USB playback and FM radio were treated as speakers because they were described and marketed as such, and the added functions did not displace that essential character. Applying Rule 1 of the General Rules for Interpretation and Note 3 to Section XVI, the goods were held classifiable under CTH 85182200, not under CTH 85279990.

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Issues: Whether multimedia speakers with additional facilities such as USB playback and FM radio are classifiable under CTH 85182200 as speakers, or under CTH 85279990 as radio reception or other apparatus.

Analysis: The classification turned on the principal function of the imported goods. The goods were described and marketed as multimedia speakers, and the added USB playback or FM radio features did not displace their essential character as speakers. Applying Rule 1 of the General Rules for the Interpretation of the First Schedule to the Customs Tariff Act, 1975, together with Note 3 to Section XVI, the relevant test was the principal function of the composite article. The earlier line of decisions had consistently held that such products remain classifiable as speakers, and the same reasoning was followed here.

Conclusion: The goods are classifiable under CTH 85182200 and not under CTH 85279990.

Final Conclusion: The impugned classification adopted by the lower authorities was set aside and the appeals succeeded with consequential relief.

Ratio Decidendi: For composite goods having additional electronic features, classification must follow the principal function of the product, and ancillary functions do not alter the tariff heading where the essential character remains that of the main article.

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