Multimedia speakers classified under CTH 8518 2200, not 8527 9100, per CBEC Circular 27/2013-Cus, appeal dismissed

CESTAT Kolkata-AT upheld reclassification of imported multimedia speakers under CTH 8518 2200, as contended by Revenue, and rejected the appellant-importer's claim for classification under CTH 8527 9100. The Tribunal relied on CBEC Circular No. 27/2013-Cus., holding that multimedia speakers without additional functionalities such as USB playback or FM radio fall under Heading 8518. As the appellant failed to produce evidence showing the presence of such additional features, the reassessment by lower authorities was sustained. Finding no infirmity in the impugned order, the appeal was dismissed.

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1. ISSUES PRESENTED AND CONSIDERED

1.1 Whether "Multimedia Speakers" imported under Bill of Entry, listed at Sl. Nos. 1 to 7, are correctly classifiable under CTH 85279100 as declared, or under CTH 85182200 as re-assessed by the customs authorities, in light of CBEC Circular No. 27/2013-Cus. dated 01.08.2013.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1 - Classification of Multimedia Speakers (Items 1-7) under CTH 85279100 vs CTH 85182200

(a) Legal framework (as discussed in the judgment)

2.1 The Court referred to CBEC Circular No. 27/2013-Cus. dated 01.08.2013, which clarifies classification of various configurations of "multimedia speakers" for customs assessment, including:

2.1.1 Paragraph 6(a): "Speaker with USB port but without USB playback or FM radio" to be classified under heading 8518, with sub-classification depending on the number of drive units (851821 or 851822; 851829 for speakers not in an enclosure).

2.1.2 Paragraphs 6(b)-(d): classification of speakers with USB playback and/or FM radio under headings 8519 or 8527, including subheading 852799 by application of the General Rules for Interpretation and Note 3 to Section XVI.

2.1.3 Paragraph 7: Board's direction that "multifunction speaker systems" be classified under heading 8519, heading 8527 or other appropriate heading depending on the specifications.

(b) Interpretation and reasoning

2.2 It was undisputed on facts that the goods in dispute at Sl. Nos. 1 to 7 were "Multimedia Speakers" without additional functionalities such as USB playback or FM radio.

2.3 The Court applied Paragraph 6(a) of the Circular and held that multimedia speakers without FM/USB playback functionality fall under heading 8518, not under heading 8527.

2.4 The Court noted that the importer had not produced any evidence to establish that the disputed goods possessed additional functionalities (USB playback, FM radio etc.) that would attract classification under CTH 85279100.

2.5 On the basis of the product description and the absence of evidence of multi-functionality, the Court treated the goods as speakers with more than one drive unit mounted in a cabinet/enclosure, falling under subheading 85182200 as per the scheme in Paragraph 6(a) of the Circular.

2.6 The Court also relied on the findings of the appellate authority that:

2.6.1 Goods that are multimedia speakers with built-in FM/USB functionality are to be classified under CTH 8519/8527, whereas all other speakers / loudspeakers with sub-woofers are classifiable under CTH 8518.

2.6.2 Items 8-12 of the same Bill of Entry were correctly self-assessed by the importer under CTH 85279100 due to multi-functionality beyond sound amplification, in accordance with Paragraph 6(d) of the Circular, thus reinforcing the distinction drawn by the Circular between simple speakers and multi-function speaker systems.

(c) Conclusions

2.7 The Court concluded that, in terms of CBEC Circular No. 27/2013-Cus. and on the facts established, Items 1 to 7 of the Bill of Entry are correctly classifiable under CTH 85182200 and not under CTH 85279100.

2.8 The re-assessment under Section 17(5) of the Customs Act, 1962, reclassifying Items 1 to 7 from CTH 85279100 to CTH 85182200, as well as the appellate order affirming such re-assessment, were found to be proper and called for no interference.

2.9 The appeal was dismissed, and the re-classification under CTH 85182200 was upheld.

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