Regarding Harmonised Customs Tariff Classification of multifunction devices, referred to as “multifunction speaker system

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.... Customs Tariff Classification of multifunction devices, referred to as "multifunction speaker system" - regarding Representatives of trade have claimed classification of "multifunction speaker system" (combination of one or more of the following: Universal Serial Bus (USB) port, USB playback, Frequency Modulation (FM) radio as loudspeakers under heading 8518 based on premise that the principal function is that of a speaker system which involves conversion of digital signal to analogue, amplification, and relay to the listener. 2. This issue was discussed in the Conference of Chief Commissioners of Customs and Directors General on Customs Tariff and Allied Matters, held on 05-06 June 2013, at Vishakhapatnam. Broadly following types of....

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....5. The classification of goods is to be determined by application of the General Rules for the Interpretation (GRIs) of the First Schedule to the Customs Tariff Act (CTA), 1975. GRI 1 requires that, "in classifying articles, for legal purpose it shall be determined according to the terms of the headings and any relative Section or Chapter Notes,..". Hence, all relevant legal texts must be considered. In this regard, Note 3 to Section XVI stipulates that, "unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of per-forming two or more complementary or alternative functions are to be classified as if consisting only of that comp....

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....ice is imparted by Radio (reception apparatus for radio-broadcasting) and hence the multifunction speaker system classifiable under subheading 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 subheading that could equally apply the heading / subheading that comes last in numerical order is used to classify the goods. Hence the said product is classifiable under subheading 8527 99....