TaxTMI 
TaxTMI 
2025 (2) TMI 1198
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....en examined in extenso and the rival entries discussed threadbare. The subject issue is no more res integra. There are a catena of decisions holding the classification of the impugned goods under heading under CTH -8518. In the case of Logic India Trading Company vs Commissioner of Customs, Cochin (2016 (337) ELT 65 (Tr-Bang.), as maintained by the Hon'ble Apex Court, reported in 2016 (342) ELT A-34 (SC), while dealing with similar set of facts, the courts have held the classification of the said goods under CTH 8518. Relevant paras of the said decision are referred to hereunder below: - "4. We have considered the submissions made by both the sides. We have also gone through the contending tariff entries which stand reproduced by us in the preceding paragraphs. There is no dispute on the facts that some of the speakers being imported by the appellant have USB port with USB playback in addition and some of them have the facility of F.M. radio also. As is seen from the above reproduced entries, Heading 8518 22 00 covers "Multiple Loudspeakers, mounted in the same enclosure". The product in question has been shown to us in the Court Room. The loudspeakers are in different sizes an....
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....rding 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 mentions functions and does not refer to the complexity or sophistication of these functions. It appears that any sound reproducing playback device or reception apparatus for radio-broadcasting will need speakers for its effective functioning. 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,..".....
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....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 Heading 8527, the Board has referred to the General Rules for the Interpretation specifically to Rule 1 and to Section Note 3 to Section XVI. The said Note is to the effect that where composite machine consists of two or more machine, the classification would be decided depending upon the machine which performs the principal function. However, we find that the principal function of the "Multimedia Speaker" is amplification of the sound and the USB port or FM radio is an additional feature introduced to such speakers. Looking at the speakers produced before us, and by appreciating the fact tha....
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....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 work on cellular networking technology or other wireless network. 6. Further, such cellular/mobile phones may contain certain facilities such as storage of contact information such as phone numbers (dialed/received/ missed call), names and addresses, to-do lists, notes, appointments, E-mail address, facility for Short Message Service (SMS)/Multimedia Messaging Service (MMS), calculator, alarm clock, calendar, games and other similar facilities as a standard feature. These facilities assist the user to make calls to desired person, identify the caller, keep track of his calls, send/receive messag....
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....puter to the Internet. In this use, the mobile phone is providing a gateway between the cellular service providers 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 operate through any of the cellular network or mobile technologies for the transmission or reception of signals, but operates exclusively through direct satellite connection or differential GPS (on the long wave radio frequencies between say 285 kHz to 325 kHz) is however classifiable under sub-heading 8526 91 as other radio navigational aid apparatus. 9. In trade parlance too, it is noticed that the goods are sold as cellular or mobile phones with various additional facilities, the use of which is dependent on the cellular service provided. Further consumers purchase such cellular phones mainly bec....
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....s. 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 quasijudicial. 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. 539 (Tribunal-LB) has also held that the circulars which are against statutory provisions cannot be followed and cannot allow to override the statutory provisions in case of conflict. 4.6 In fact, there cannot be any dispute about the above legal proposition as it stands fully settled. 4.7 As we have already observed that even the lower authorities are not disputing the fact that the goods in question are speakers with added function, as such the main role of the item in question remains amplifying the sound received by it either from outside source or from inbuilt feature. As such, going by the In....
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....r not mounted in their enclosures 8518 21 00 Single loudspeaker, mounted in their enclosures 8518 22 00 Multiple loudspeakers, mounted in the same enclosure 8518 29 00 Other 8518 30 00 Headphones and earphones, whether or not combined with a microphone, and sets consisting of a microphone and one or more loudspeakers 8518 40 00 Audio-frequency electric amplifiers 8518 50 00 Electric sound amplifier sets 8518 90 00 Parts" "8527 Reception apparatus for radio- broadcasting, whether or not combined, in the same housing with sound recording or reproducing apparatus or a clock - Radio-broadcast receivers capable of operating without an external source of power : 8527 12 00 Pocket-size radio cassette-players 85271300 Other apparatus combined with sound recording or reproducing apparatus 8527 19 00 Other Radio-broadcast receivers not capable of operating without an external source of power, of a kind used in motor vehicles : 8527 21 00 Combined with sound recording or reproducing apparatus 8527 29 00 Other Other Other 8527 91 00 Combined with sound recording or reproducing apparatus 8527 92 00 Not combined with sound recording or reproducing apparatus but ....
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....the impugned goods are speakers with added function and the main role of the item, in question, remains amplifying the sound received from outside source or from inbuilt feature. Applying the interpretative rules and section note 3 of Section XVI, the Tribunal held that the product should be classified as speakers only. The said decision is affirmed by the Hon'ble Supreme Court in 2016 (342) E.L.T. A34 (S.C.). 5. Apart from the above it would be pertinent to also place on record the Tribunals' findings on the subject matter, in the appellant's own case decided vide Order No. F.O.-76070/2018 dt. 4/5/2018. Relevant portion of the said order is as under: - "5. After considering the arguments from both sides and on perusal of the records, we note that the goods imported have been described as "multi-media speaker system". It is stated to contain features of playing USB/FB/FM either by connecting the same or through blue tooth. The Department has argued that in view of the additional features in the imported goods, the same are more properly classified as music system under 8527 but we note that essential function of the imported goods is nothing but multi media speakers. We also fin....