TaxTMI 
TaxTMI 
2025 (6) TMI 1363
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....s such as multimedia speakers, headphones, gaming devices, computers, computer peripherals, etc. The multimedia speakers imported by the appellant are high power speakers capable of reproducing a very wide range of audible frequencies by receiving input from external audio playback devices connected to the speakers through wire/ auxiliary cable like CVD/DVD player, MP3 player, ADP machines, etc. Further, some of the speakers imported by the Appellant have audio playback facility also wherein the speakers can play music stored in storage devices in digital format like USB pen drives, memory cards, etc. which are connected to the speakers through USB/MMC jack available on the speakers. Further, some of the speakers also incorporate AM/FM tuner and can play radio. 3. The Appellant was importing the abovementioned multimedia speakers with added features of USB/SD card/ MMC Playback and/or in-built FM radio by classifying the same under Tariff Item 8518 40 00 as 'audio frequency electric amplifiers' till October 2013. However, post issuance of Circular No. 27/2013-Cus. dated 01.08.2013, the appellant, for smooth clearance of the said products, started to classify the same under....
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....s thereon. 6.1. Aggrieved from the said order, the appellant has filed the present appeal. 7. During the course of hearing, the Ld. Counsel appearing on behalf of the appellant, has made various submissions, which are summarized below: - A. Issue Is No Longer Res Integra the classification of Multimedia speakers with additional ancillary features of USB/SD CARD/MMC PLAYBACK AND/OR FM RADIO stands settled in favour of the appellant under CTH 8518. (i) The multimedia speakers imported by the appellant with additional features of USB/ SD card/ MMC playback and/ or FM radio have the principal functionality of loudspeakers with ancillary features of audio playback facility and/or FM radio. Note 3 of Section XVI of Schedule I to the Customs Tariff Act stipulates that in case of a composite machine capable of performing two or more functions, it has to be classified as if consisting only of that component or as being that machine, which performs the 'principal function'. Further, in terms of Rule 3(b) of General Rules of Interpretation ('GRI), mixtures or composite goods consisting of different materials or made up of different components, shall be classified on the basis....
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....368) E.L.T. 683 (Tri. Chennai) [Maintained in 2023 (383) E.L.T. 497 (S.C.)]. (vi) Hence, it is their contention that the demand confirmed vide the impugned order classifying the multimedia speakers under CTH 8519/8527 is unsustainable and liable to be set aside. (vii) Further, that as evident from the Bill of material (Annexure 7 providing details of materials used in manufacture of a complete set of multimedia speaker and break-up of cost thereof), the cost attributable to the USD/ SD card reader or FM is miniscule. Therefore, it is amply clear that the essential character/principal function of the subject goods is to function as a multimedia speaker or loudspeaker. Hence, classification of the subject products in terms of the ancillary functions or add-on features under CTH 8519/8527 is untenable and the demand confirmed basis the same is accordingly liable to be set aside. (viii) The appellant had classified the multimedia speakers under Customs Tariff Item 8518 40 00 as 'audio frequency electric amplifiers' till October 2013 at the time of importation. However, the same was re-classified under Customs Tariff Item 8518 29 00 as 'Multiple or single loudspeakers ....
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....n is the principal and the main function it performs, which remains to be speakers, in spite of the fact that the multimedia speakers under consideration had added features of USB playback and/or FM radio. In the instant case as well, the headphones imported by the appellant are primarily meant to provide audio/sound facility restrictively to the person using it with merely an ancillary feature of in-built FM radio. Hence, the headphones imported by the Appellant merit classification under Customs Tariff Item 8518 30 00 as 'headphones and earphones, whether or not combined with a microphone, and sets consisting of a microphone and one or more loudspeakers' and not as radio broadcast receivers as contended by the Department. (iii) Hence, basing on these submissions, the appellant contends that the entire demand confirmed vide the impugned order is liable to be set aside. 7.1. With regard to the invocation of the extended period of limitation against the appellant, It is the submission of the Ld. Counsel for the appellant that in the present case, there cannot be suppression of facts or wilful misstatement with intent to evade payment of duty and hence, extended period of limi....
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....8. The Ld. Authorized Representative of the Revenue reiterated the findings in the impugned order. 9. Heard both sides and perused the appeal records. 10. After hearing both sides, we find that the issues that are primarily required to be decided in this appeal are: - (1) Whether the multimedia speakers with added ancillary features of USB/SD card/ MMC Playback and/ or FM radio imported by the appellant are classifiable under CTH 8527/8519 as claimed by the Revenue or under CTH 8518 as claimed by the appellant. (2) Whether the headphones with added feature of FM radio is classifiable under CTH 8527 as 'radio broadcast receivers' as claimed by the Revenue or under CTH 8518 as claimed by the appellant. 11. With regard to the first issue, we find that an identical issue had come up before this Tribunal in the appellant's own cases. In M/s. Jupiter International Limited vs Commissioner of Customs (Port), Kolkata [2025 (2) TMI 430 - CESTAT Kolkata], under similar facts and circumstances, it has been observed as under: - "The appellant, Jupiter International Ltd imported a consignment of Two models of Multimedia Speakers having additional function such as Blue tooth/SD/M....
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....n'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: .... 6. The detailed analysis of the classification of all such Audio-Visual Receivers was also undertaken independently by this Tribunal in the case of ONKYO SIGHT & SOUND INDIA PVT.LTD. vs Commissioner of Customs, Chennai (2019(368) ELT 683(Tri- Chen.), wherein too the Southern Regional Bench of the Tribunal did not agree with the department's stance for classification of the said products under CTH 8527 and had retained the CTH 8518 claiming the goods as Audio Frequency Amplifier along with Home Theatre Systems as multiple loudspeakers mounted in the same enclosure. 7. In view of said matter having been examined ad nauseam as referred supra, we find no merit in the order of the lower authority which is therefore set aside. 8. The appeal filed by the appellant is hereby allowed with consequential relief, if any, as per law." 11.2. Thus, we find that the issue is no longer res integra as the same has already been dealt with by this....
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....external source of power, of a kind used in motor vehicles: u 10% - 12.2. A perusal of the above two Tariff Entries clearly reveals that the Tariff Heading 8518 covers 'headphones and earphones' specifically. While classifying goods, as per the General Rules of Interpretation, a specific heading is always to be preferred over a general heading. In the present case, the appellant has imported 'headphones and earphones', which are specifically covered under Tariff Item No. 8518 30 00. Thus, we hold that the goods imported by the appellant are appropriately classifiable under Tariff Item No. 8518 30 00, as claimed by the appellant. 12.3. In this regard, we also take note of the judgment pronounced in the case of Logic India Trading Company vs. CC [2016 (337) ELT 65 (Tri. - Bang.)], wherein by placing reliance on the Interpretative Rules, Section Note 3 to Section XVI and the judgment pronounced by Hon'ble Apex Court in the case of Xerox India Ltd. v. Commissioner of Customs, Mumbai [2010 (260) E.L.T. 161 (S.C.)], it has been held that the criteria for classifying the product under consideration is the principal and the main function it performs, which remains to be speake....