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2016 (3) TMI 5
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....tervailing Duty (CVD). However, the Revenue's contention is that the said "Multimedia Speakers", being imported by the appellant are properly classifiable under Chapter Heading 8519 81 00 and 8527 99 19 depending upon whether the same are having features of FM Radio, etc. Though the Basic Customs Duty in respect of the two contending entries is the same but there is a difference of CVD, thus resulting in excess duty liability against the assessee. 2.1 The appellant was importing three types of "Multimedia Speakers". The first type of speakers which is without USB port or a F.M. Radio was admittedly a plain speaker having no other function. There is no dispute about the classification of the said speaker. The second type of speaker being imported by the appellant were having additional functions of USB Port with playback port, which the Revenue intends to classify under Chapter Heading 8519 and the third type of speakers is where there was facility of FM Radio along with USB port playback, which the Revenue intends to classify it under Chapter Heading 8527. 2.2 For better appreciation of contending entries, the same are being reproduced below: 8518 Microphones and stands....
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....tions, he also relies upon various Circulars of the Board as also to various decisions. Learned advocate submit that the lower authorities have merely relied upon a Circular of the Board being No.27/2013-Cus. dated 1.8.2013. However, he fairly agrees that the said Circular deals with an identical product being imported by the appellants but submits that the interpretation given in the said Circular is not appropriate. It is his argument that the Circular issued by the Board are not binding upon the Courts and as such, independent interpretation has to be adopted and ruling is required to given. For the said proposition, he also refers to various decisions laying that Circulars issued by the Board cannot overrule statutory provisions. 3. Countering the arguments, learned Commissioner (AR) appearing for the Revenue draws our attention to the impugned orders passed by the authorities below and submits that the goods imported by the appellant are not speakers simpliciter but as they contain additional feature of having a USB port with playback and a radio facility, it has to be held that they cannot be classified as speakers falling under Chapter Heading 8518. He also draws our atte....
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.... combined, in the same housing". The additional feature of FM radio in the speaker, in our opinion, would again not convert the huge speaker into a FM radio. Even going by the common parlance test, nobody would buy a huge speaker for the purpose of FM radio. 4.1 At this stage, we may advert to the Circular No.27/2013-Cus. dated 1.8.2013 which alone stands relied upon by the lower authorities for coming to the conclusion against the assessee. The said circular stands given by the Ministry of Finance on the representations received from the industry in respect of the identical products being imported. The opinion as expressed in the said circular is based upon the outcome of the Conference of Chief Commissioners of Customs and Directorate General on the customs tariff and allied matters. Relevant paras of the said Circulars are reproduced :- "3. The competing headings are : 8518 - Loudspeakers, whether or not mounted in their enclosures: headphones and earphones, whether or not combined with a microphone, and sets consisting of a microphone and one or more loudspeakers: audio-frequency electric amplifiers: electric sound amplifier sets; 8519 - Sound reco....
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....re than one drive unit in each cabinet - for example one woofer and one tweeter - are classified under subheading 851822. Speakers that are not mounted in a cabinet or enclosure are classified under subheading code 851829. (b) "Speaker with USB Port having USB playback but without FM radio", the principal function of the device is imparted by USB playback facility. Therefore the said multifunction speaker system is classifiable in subheading 851981 of the Harmonized Customs Tariff, which provides for Sound recording or reproducing apparatus : Other apparatus : Using magnetic, optical or semiconductor media : Other : Other. (c) "Speaker with USB port having FM radio but without USB playback" the principal function of the device is imparted by Radio (reception apparatus for radio-broadcasting) and hence the multifunction speaker system classifiable under subheading 852799 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....
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....ing system, personal digital assistant (PDA), GPS receivers, camera and many other features. After taking into account the various provisions of law, it was observed as under: "2. It is represented that mobile, cellular handset/telephone has the essential characteristic of transmission and reception apparatus, such as aerial, display screen, keypad and that the same should be of small size so that it can be hand-held and is of lightweight for use as telephone instrument. The other functions such as radio receivers, music players, e-mail, net browsers, calculators, stopwatch, alarm, computing on software platform are subsidiary to the main function of transceiver. 3. .... 4. ... 5. In terms of the First Schedule to the Customs Tariff, "telephones for cellular networks or other wireless networks, push-button type or other", would be classifiable under sub-heading 8517 12. Similarly, "portable automatic data processing machine weighing not more than 10 Kgs., consisting of at least a CPU, a key board and a display" would be classifiable under sub-heading 8471 30; and "radio navigational aid apparatus" would be classifiable under sub-heading 852691. F....
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.... terms of Section Note 3 to Section Note XVI when the goods satisfy the following conditions these would be characterized as transmission apparatus in cellular/wireless network rather than as an Automatic Data Processing (ADP) machine or camera or GPS receiver. i. use transmission of signals (representing speech, messages, data or pictures) by means of electromagnetic waves which are transmitted through the ether without any line connection i.e., wireless, in any of the bandwidth allotted to mobile/cellular networks say 850 MHz to 1900 MHz; and ii. consist of transmission and reception hardware such as trans-ceivers, antenna, microphone, speaker, battery, radio-frequency chip, basic band chip, power management chip, Subscriber Identity Module (SIM), International Mobile Equipment Identity (IMEI) or other unique identity for cellular/mobile phone as well as radio-frequency transmission software such as GSM, General Packet Radio Service (GPRS) and Enhanced Data rates for GSM Evolution (EDGE) etc., Hence, such cellular/mobile phones remain classified in sub-heading 8517 12, as the principal function of these equipments remain as "telephony". 8. It i....
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....as smart phone or other similar cellular or mobile phone, the additional facilities will not convert the phones into any other item. 4.3 In fact to the same effect is another Circular of the Board being Circular No.20/2013-Cus. dated 14.5.2013 wherein it was held that the classification of the "Tablet Computer" having an additional facility of connecting to an cellular network to make a voice calls will not make the Table Computer divert from its main function and Table Computer would remain so. 4.4 When all the three circulars are viewed together, it is seen that the opinion expressed by the Board in Circular dated 1.8.2013 in respect of "multifunctional speaker system" is diagonally opposite to the opinion expressed in the earlier two circulars being Circular No.17/2007-Cus. dated 19.4.2007 and Circular No.20/2013-Cus. dated 14.5.2013. In the other two Circulars, the same Interpretative Rules have been taken into consideration and the same Section Note 3 to Section XVI stands taken note of and the products have been held to be classifiable according to their main and principal and essential function. We really fail to understand as to how subsequent Circular stands issued w....