TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1287
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....said query the appellant have explained that the classification of the product has already been decided by the this Tribunal, in the case of Logic India Trading Vs. Commissioner of Customs, Cochin[2016(337) ELT 65 (Tri.Bang.)] which has been affirmed by the Hon'ble Apex Court reported in 2016 (342) ELT A34(SC). Therefore, requested to assess the Bills of Entry under CTH 85182200. Thereafter the Bills of Entry was assessed to CTH 85279990 attracting IGST @28. 5. The said order was challenged before the Ld. Commissioner (Appeal) who affirmed the order of the Adjudicating Authority. Against the said order appellants were before us. 6. The Ld. Counsel for the appellants submits that the issue has been examined in the Tribunal in the case of Logic India Trading Company (Supra) and the said decision has been followed by this Tribunal in the case of Commissioner of Customs (Port), Kolkata Vs. Santosh Radio Products vide Final Order No. 76070/2018 dated 04.05.2018. Further in the case of OM SAI Shipping and Clearing Agency vide Final Order No. 75047275048/2020 dated 3rd January, 2020. Further in the case of Kejriwal Electronics Limited versus Commissioner of Customs (Port), Kolkata v....
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.... decided is as to whether introducing such facility of USB port for USB playback is otherwise admittedly speaker can be considered to be a reproducing apparatus or not. The reading of the various subheadings of the said Heading reveals that it covers the products like Audio CD player, CD players, MP3 players, time code recorders, etc. In our opinion, the speaker is primarily a speaker and some additional feature or facility for use of USB playback will not convert the same into a product equivalent to the products covered by Heading 8519. Similarly, Heading 8527 takes into its ambit the "Reception apparatus for radio-broadcasting, whether or not 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 ....
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.... Conference, there was general agreement that in case of : (a) "Speaker with USB port but without USB playback or FM radio", the product would be classified in heading 8518, by application of General Rules 1. Speakers classified under heading 8518 include both passive speakers and active speakers. Active speakers, like many subwoofers, contain a built-in audio amplifier. The subheading under which speakers are classified depends on the number of 'drive units' - the actual loudspeaker cones or ribbons - in each cabinet or enclosure. Speakers with a single drive unit in each cabinet are classified under sub-heading 8518 21. Speakers with more than one drive unit in each cabinet - for example one woofer and one tweeter - are classified under subheading 8518 22. Speakers that are not mounted in a cabinet or enclosure are classified under sub-heading code 8518 29. (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 sub-heading 8519 81 of the Harmonized Customs Tariff, which provides for Sound recording or reprod....
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....in fact, contrary to the interpretation adopted by the Board in other circulars, though not dealing with the same items but expressing opinions on the items with advanced multifunctions. 4.2 Reference can be made to Circular No. 17/2007-Cus., dated 19-4-2007 wherein the classification of 'higher technology featured mobile/cellular handsets or telephones' was the subject matter of consideration. The cellular phones are classifiable under Heading 8517 12 of the Customs Tariff Act. It was observed that as a result of advanced technology, the cellular phones have additional features of word processing, email, internet, global positioning 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,....
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.... color screens, QWERTY keyboard, touch screen. It may also run application software and synchronize with PCs, function as Global Positioning System (GPS) receiver. These devices work on operating systems (software) like Symbian OS, Microsoft Windows Mobile OS, Linux OS, which are similar to the software used in desktop PC/laptop. All these functionalities grouped as PDA or pocket PC or camera or GPS receiver, contained in cellular/mobile phones, though represent as composite machine, for the purpose of classification, it will be governed by the Customs Tariff Act and the General Rules for Interpretation (GRI) as explained in para 4 above. Accordingly, in 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....
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....ese additional facilities will not become operational without subscribing to a cellular phone service plan. Hence, it is clarified that these instruments are to be categorized as mobile/cellular phones from the point of trade parlance." As is seen from the above, the Ministry itself, while expressing opinion on the classification of the mobile phones having a number of additional features, concluded that inasmuch as the essential purpose of the mobile phone is to communicate, the additional features of having so many other functions will not convert the phones into any other item. As the goods are being marketed and being purchased by the consumers 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 ....
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....raised by the seller of the goods stand examined by it and the description stand given as "Multimedia Speaker". This also reflects upon the fact that the goods in question, in common parlance are also traded as speakers. The appellants have also submitted an affidavit of the dealers, the invoices raised by them against the customers and the statement of Service Manager of the assessee. Examination of these documents shows that goods are primarily sold as speakers. Even the brochures placed on record indicate that the goods are being traded as speakers only and not as either FM radio or the sound reproduction system. 4. The aforesaid decision has been subsequently followed in a series of cases of similar nature. Thus, in the case of Global Enterprises vs Commissioner of Central Excise, Delhi II (2017/354/ELT 548(Tri-Del.), identical question of law was considered. The Tribunal held the classification of the said goods under CTH 8518. The relevant paras thereof are reproduced below: - 4.We have heard both the sides extensively and perused the appeal record, written submission and sales brochure of the impugned products. We take up for consideration, first the classi....
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....dered the impugned goods as composite goods and applying note 3 of Section XVI of the Central Excise Tariff Act, held that FM radio present in the amplifier speakers provide a "principal function" or "clearly defined function" and accordingly he held that the said product should be considered as "radio communication receivers - others" rather than speakers (audio frequency electric amplifier). We have carefully perused the finding of the Original Authority as recorded in para 103 of the impugned order. We note that the Original Authority fell in error in appreciating the factual details of the impugned goods, commercial parlance as to how it is brought and sold and also applicable scope of tariff entries in terms of the provisions of section note/chapter note. We reproduce the pictorial representation of multimedia speakers with built in FM radio as below: 6.We note the product, as represented above basically contains two speakers and a woofer. FM radio is built in, in the woofer. The whole set is a multimedia speaker system generally connected to other devices like computers or audio players for sound output. A comparison of the above goods with multimedia speakers + sub-....
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....ibunal observed as follows: 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 Interpretative Rules and Section Note 3 to Section XVI, the criteria for classifying the product is the principal and the main function it performs, which in the present case remains to be that of a speaker. We accordingly hold that the goods in question are properly classifiable under Chapter Heading 8518 22 00. We may also add that the invoices raised by the seller of the goods stand examined by it and the description stand given as "Multimedia Speaker". This also reflects upon the fact that the goods in question, in common parlance are also traded as speakers. The appellants have also submitted an affidavit of the dealers, the invoices raised by them against the customers and the statement of Service Manager of the assessee. Examination of these documents shows that goods are primarily sold as speakers. Even the brochures pla....