TaxTMI 
TaxTMI 
2023 (12) TMI 1490
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....they have sought ruling on classification of the said goods under the Customs Tariff Act, 1975, on question: Whether MEMS Microphone can be classified under Tariff Item 85423900? 3.1 The applicant is seeking advance ruling on the issue of classification of Micro Electro Mechanical System (MEMS) Microphone under the Schedule to the Customs Tariff Act, 1975. The applicant has inter-alia stated that, they are engaged in the business of manufacturing mobile phones and for the said purpose, they import various parts and equipments; earlier, they were importing traditional microphones which were bulky and have since become outdated and replaced by high performance and highly sensitive silicon based integrated circuit MEMS Microphones which are the subject matter of the present application. 3.2 Further, the applicant has stated that, the product for which advance ruling has been sought, is a miniature, high-performance, low-power, matched sensitivity silicon microphone; it is characterised as a Micro Integrated Circuit Microphone which is composed of MEMS silicon sensor components, Application-Specific Integrated Circuit amplifier chip, PCB substrate, shell, Gold wire, and other com....
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....tegrated circuits (MCOs) : a combination of one or more monolithic, hybrid, or multi-chip integrated circuits with at least one of the following components : silicon-based sensors, actuators, oscillators, resonators or combinations thereof, or components performing the functions of articles classifiable under heading 85.32, 85.33, 85.41, or inductors classifiable under heading 85.04, formed to all intents and purposes indivisibly into a single body like an integrated circuit, as a component of a kind used for assembly onto a printed circuit board (PCB) or other carrier, through the connecting of pins, leads, balls, lands, bumps, or pads. For the purpose of this definition: 1. "Components" may be discrete, manufactured independently then assembled onto the rest of the MCO, or integrated into other components, 2. "Silicon based" means built on a silicon substrate, or made of silicon materials, or manufactured onto integrated circuit die, 3. (a) "Silicon-based sensors" consist of microelectronic or mechanical structures that are created in the mass or on the surface of a semiconductor and that have the function of detecting physical or chemical phenomena and....
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....often intended for mounting with their terminals or leads in, or on, a supporting carrier (e.g., printed circuit boards (PCBs) or other carriers, such as thick-film, thin-film, insulated metal substrates, etc.) or connecting to an electric interface, Packages of the MCOS can be made of several materials, have various designs and forms, and can protect the unit from mechanical and environmental influences. The MCOS can have different features (e.g., a package can be solid, or have holes, windows or membranes) or attachments that are necessary for specific functions. The MCOS use these different features and attachments to receive input from outside supplied physical or chemical quantities and process these data for output in relation with silicon- based sensors, actuators, oscillators, resonators. They can be used in variety of applications, including computer, communication (e.g, telephones for cellular networks), consumer, industrial or automotive applications." The above explanation clearly states that the MCOs can be used in variety of applications but still would be covered under the CTH 8542 if they fulfil the meaning of MCO provided in the Explanatory Not....
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....S CROSS Ruling N281202 dated December 6, 2016), held that the concerned products are ICs constructed of circuit elements that are created in the mass on the surface of a silicon semiconductor wafer, inseparably in a single package and performing various functions shall be classifiable under CH 8542. 4.4.3 Binding Tarriff Information ("BTI") reference no. DEBTI13690/19-1 of European Commission for Taxation and Customs Union, dated 03/06/2019, classified MEMS Microphone under CH 8542. The classification under CH 8542 shall take precedence over CH 8518. 4.4.4 last part of the Note 12 to the Chapter 85 states that, for classification of the articles defined in the above-mentioned note, CH 8542 shall take precedence over any other heading in the nomenclature. Therefore, the Product being an MCO, its classification under CTH 85423900 will take precedence over classification under Sub-heading 85181000. The relevant part of chapter note is extracted below: "For the classification of the articles defined in this Note, headings 85.41 and 85.42 shall take precedence over any other heading in the Nomenclature, except in the case of heading 85.23, which might cover them by refere....
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....imilar to an empty box or a suitcase. 30. Before concluding, we reiterate that in the present case, the levy is on a computer based embedded system. The software embedded in the programmed EPROM, which is an IC chip, constitutes the "brain" of the system. The programmed EPROM is an integral part of the system. The levy is on the unit. The levy is not on the programmed EPROM. The programme embedded is not an easily removable. Hence, it will not fall in the category of recorded media under tariff item 85.24 and remains an IC under tariff item 85.42. 4.4.5 Further the Hon'ble Tribunal in the Commissioner of Cus., Bangalore vs Instrument Research Associates, 2004 (170) E.L.T. 321 (Tri. - Bang.) has taken the similar view. The relevant extract of the judgement is extracted below: On a careful consideration, it is seen from the Commissioner's order that the item is electronic micro assemblies. Electronic Micro Assemblies are clearly classifiable under Heading 8542. Note 5 of Chapter 85 also clearly lays down as to what are electronic integrated circuits and electronic micro assemblies and it states that 'for the classification of the articles defined in t....
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....les of Interpretation (GRI, in short) lays down that the titles of Sections, Chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter notes; the heading 8518 covers Microphones and stands therefor; 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; however, in terms of Chapter Notes to Chapter 85, ICs will be classified under heading 8542 and the same will take precedence over any other entry in the Schedule; therefore, irrespective of the description of the heading in 8518, the subject product being a MCO and being covered within the meaning of ICs, will be covered under CTH 8542 alone. In this regard, in the case of Commissioner of Central Excise, Nagpur vs Simplex Mills Co. Ltd. [2005 (181) E.L.T. 345 (SC)], it is held that classification of a product is determined according to the terms of the Headings and any relative Section or C....
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....ommissionerate wherein, it is inter-alia stated that, (i) the applicant is seeking advance ruling for classification from CTH 85181000 in which they are already importing the same product to CTH 85423900. It appears that the applicant does not fulfil the provisions of Section 28E(b) of the Customs Act, 1962 to seek advance ruling in respect of the goods which are already being imported by them in commercial quantity before any written decision of the Authority. In view of the above, it appears that the application filed by M/s. Vivo Mobile India Pvt. Ltd. merits rejection in terms of Section 28E(b) of the Customs Act, 1962, (ii) the microphones are rightly classifiable under heading 851810 and its parts are classified under 851890. Definition of MEMS microphone as available in common trade parlance is as follows: A MEMS microphone is an electro-acoustic transducer housing a sensor MEMS (Micro Electro Mechanical System) and an application specific integrated circuit (ASIC) in a single package. The usage targets all audio applications and converts variable incoming sound pressure to capacitance variations that the ASIC transforms into analog or digital outp....
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....cation under 854239. Accordingly, in terms of rule 3(a) of GRI, the description against which the advance ruling is being sought, there is no iota of doubt that the same are identified as Microphone, amplified or technologically added by the MEMS application. (v) a similar matter of monitors has been examined and decided in the case of Commissioner of Customs, Mumbai v. Viking Integration Projects (P) Ltd. reported in 2003 (155) E.L.T. 179 (Tri- Mumbai) by CEGAT West Zonal Bench, Mumbai. 6. In response to the comments of the concerned Commissionerate, the applicant while reiterating the submissions already made in the application for advance rulings, has also inter-alia stated that in light of the rulings issued by the CAAR, the instant application for advance ruling is maintainable and cited that section 28E(b) does not preclude any applicant from raising a question merely because similar goods have been imported in the past. As long as there is no dispute that the question raised is not pending before any officer, Authority or Court and will be applicable only with respect to the future proposed imports, the application cannot be held to be not maintainable. Vis-a-vis....
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.... is not ousted by proviso to section 28-1 (2) of the Customs Act, 1962.'. Reiterating the earlier stand taken by the CAAR, New Delhi, in the interest of certainty in the matter of classification of goods, I intend to issue ruling in the instant application, recognising the fact that the subject goods had earlier been imported by the applicant. 9. Finding that the application is valid in terms of the provisions of the Customs Act, 1962 and the Customs Authority for Advance Rulings Regulations, 2021, having gone through submissions of the applicant, comments of the concerned Commissionerate and having heard the applicant, I proceed to examine the question on merits. Further, since the question under the application for advance ruling relates to classification of goods, guidance of the Harmonized Commodity Description and Coding System of the World Customs Organization, to which India is a signatory, would be useful. 10. I also note that the technical literature of M/s MEM Sensing Microsystems submitted by the applicant described the product as MSM381A2718Z9DM2E (Analogue Output MEMS microphone) and states that it is an omnidirectional, bottom-ported, analog output MEMS micr....
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....e interesting if MEMS can be merged not only with microelectronics, but with other technologies such as photonics, nanotechnology, etc. This is sometimes called "heterogeneous integration." https://www.techtarget.com/iotagenda/definition/micro-electromechanical-systems-MEMS A MEMS (micro-electromechanical system) is a miniature machine that has both mechanical and electronic components. The physical dimension of a MEMS can range from several millimeters to less than one micrometer, a dimension many times smaller than the width of a human hair. & in Japan, MEMS are more commonly known as micromachines, and in European countries, MEMS are more commonly referred to as microsystems technology (MST). Unlike conventional mechatronic devices, MEMS are often manufactured with the same batch fabrication techniques used to create integrated circuits (ICs) and many commercial MEMS products are integrated and packaged together with ICs. 12. In light of the foregoing, I note that the MEMS microphones come in IC-like packages for surface mount assembly. However, they are not integrated circuit of heading 8542. Thus, the rulings and judgements quoted by the applicant, referring to device....