TaxTMI 
TaxTMI 
TaxTMI 
2019 (10) TMI 505
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....the main system, usually sub-woofer is equipped with a USB port, and / or SD card reader, and/or FM Radio and /or MP 3 player along with a LED display for operation, on the front panel. Such systems are invariably accompanied by sophisticated remote control with interactive interface. The main system contain Printed Circuit Boards (PCBs) with complex internal circuitry to retrieve, read and to produce audio files of MP 3/ WMA audio formats stored on a USB memory device, such as USB flash drives/ flash players/ SD cards and also to play FM Radio. It is also incorporated with a built in amplifier and various terminals that allow for connectivity with the help of audio jacks to various audio sources such as CD players, DVD players, Blu-ray players etc. The main system is connected to an external source of power and is interconnected to other speakers (satellite speakers). Depending on the source, the sound is reproduced by the entire speaker system. Prima facie, these products which are new generation speaker systems, are not just simple loudspeakers/ audio speakers. They are multi-function devices that are meant essentially for reproducing sound and providing wholesome entertainment.....
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....ratus; that the disputed goods are known in the market as speaker and they are marketed as a speaker. It is well settled principle of law that a product need to be classified under the heading where it is generally known in the market to be classified. The speakers are not known as sound reproducing apparatus as required for a product to be classified under Chapter heading 8519. 4. The learned advocate has mentioned that the issue of classification of multimedia speakers with an additional facility such as USB playback or FM radio etc. has already been decided by this Tribunal in the case of M/s. Logic India Trading Co. vs. CC, Cochin reported under [2016 (337) ELT 65 (Tri-Bang)] wherein it has been held that even if the Multimedia speakers having additional facilities such as USB port, FM radio etc. will not alter the classification of the product as primary function of the imported machine systems is speaker and therefore, same deserves to be classified under Chapter heading 8518 of the Customs Tariff Act, 1975. It has further been mentioned that the Hon'ble Supreme Court has also endorsed the above decision of this Tribunal by dismissing the appeal filed by the Department vide ....
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....he impugned goods having only FM radio, or combined with sound recording or reproducing apparatus in the same housing are classifiable under CTH 8527. 7. Reliance is placed by Revenue on Cross Ruling NY N244871 dated 20.8.2013. The description of merchandise/ goods considered under the cited ruling (a 32-inch sound bar speaker system with an FM Radio and Bluetooth wireless technology) is similar to the impugned goods. The Ruling decides classification of the said merchandise /goods under Harmonized Tariff Schedule of the US. The Ruling has persuasive value for classification of similar goods under CTH 8527. 8. Having heard both the sides and perusing the record, we find that the matter is no longer res integra as it has already been decided by this Tribunal in the case of M/s. Logic India Trading Co. vs. CC, Cochin (supra); that the multimedia speakers even if they are having additional features like USB port, etc. will appropriately be classified under CTH 8518 as pre-dominant function of the electric apparatus remains as a speaker. The relevant extract of the decision in the case of M/s. Logic India Trading Co. vs. CC, Cochin (supra) is reproduced herein below: "4. We have co....
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....roducts 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 recording or reproducing apparatus; 8527 - Reception apparatus for radio-broadcasting whether or not combined, in the same housing, with sound recording or reproducing apparatus or a clock. 4. The view that in case of a "multifunction speaker system", the "reception apparatus for radio-broadcasting (heading 8527)" or "reproduction function of sound as provided by USB playback (heading 8519)" is less important than the function of amplification and relay of sound, thereby leading to the inference that such products are classifiable in heading 8518, overlooks the fact that the HS nomenclature only men....
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.... "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 sub-heading 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 sub-heading that could equally apply the heading/sub-heading that comes last in numerical order is used to classify the goods. Hence the said product is classifiable under sub-heading 8527 99 by virtue of General Rule 1, Note 3 to Section XVI, 3(c), and 6." As is seen from the above, the products considered in the said circular are identical to the products being imported by the assessee. For arriving at the conclusion that the speaker with the USB playback would fall under Heading 8519 and the speakers with FM radio would fall under....
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.... ........... 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 8526 91. From the scope of the headings/sub-headings. Board found that all mobile or cellular telephones whether working on the Global System for Mobile Communications (GSM) standard, Code Division Multiple Access (CDMA) cellular systems, Wireless Local Loop (WLL) or any other Mobile technologies, principally used as communication device would get covered under sub-heading 8517 12. These are essentially communication devices working on the basis of towers and base stations arranged into a network of cells, which send and receive radio signals for the cellular/mobile phone for communication. In view of the above, Board clarifies that sub-heading 8517 12 will cover all types of telephones that....
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...., 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 is further explained that cellular/mobile phones can also be employed as data modems to form a wireless access point connecting a personal computer to the Internet. In this use, the mobile phone is providing a gateway between the cellular service provider's data network and PCs. In terms of Chapter Note 5D(ii), it is made clear that such mobile phones shall not be classified under Heading 8471 when they are presented separately. In other words, only when such phones are presented along with ADP machine or when composite machines consisting of ADP and mobile phones, where ADP is the principal function, these would be classified under Heading 8471. Further, it is clarified that GPS receivers having phone function that does not....
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....arlier 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 wherein a different view stands expressed without assailing the fact that a speaker remains a speaker but with some additional facilities and features. 4.5 We find that the lower authorities have solely and mainly relied upon the said circular of the Board. It is well settled that the circular issued by the Board are not binding on the Courts, be it judicial or quasi-judicial. Though there are plethora of judgments to that count but one such reference can be made to Hon'ble Supreme Court's decision in the case of CCE, Bhopal v. Minwool Rock Fibres Ltd. - 2012 (278) E.L.T. 581 (S.C.). Further, the Larger Bench of the Tribunal in the case of Bimetal Bearings Ltd. v. CCE, Chennai - 2008 (232) E.L.T. 790 (Tri.-LB) = 2010 (18) S.T.R....