2018 (9) TMI 1734 - AT - Customs

Classification of imported goods - Multimedia speakers with additional facilities such as USB, SD card and FM radio etc. - whether classified under CTH 851822/851829 or under CTH 8519/8527? - Held that - The very same issue has been decided by the Tribunal in Logic India Trading Co. vs Commissioner of Customs, Cochin 2016 (3) TMI 5 - CESTAT BANGALORE , where it was held that the multifunctional printing machines having fax facility and screening facility would continue to fall under Heading 8471 of the Customs Tariff Act as digital printers only inasmuch as the predominant function of the machine in question was printing. 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. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Classification of imported multimedia speakers with additional features.
2. Imposition of additional duty of customs based on retail sale price.
3. Confiscation of goods and imposition of redemption fine and penalties.
4. Non-imposition of penalty on a co-noticee.

Detailed Analysis:

1. Classification of Imported Multimedia Speakers with Additional Features:
The primary issue addressed was whether multimedia speakers with USB, SD card, and FM radio features should be classified under Customs Tariff Heading (CTH) 851822/851829 or under CTH 85198100/85271300. The Commissioner had reclassified the goods under CTH 85198100/85271300, leading to additional customs duty based on retail sale price. The appellants argued that the classification should remain under CTH 85182200/85182900.

The Tribunal referenced previous decisions, particularly the case of Logic India Trading Co. vs Commissioner of Customs, Cochin, where it was held that such multimedia speakers should be classified under CTH 85198100/85271300. The Tribunal reiterated that the principal function of the speakers is amplification, with additional features not altering their primary classification as speakers. This view was supported by the Hon. Supreme Court, which dismissed the department's appeal against the Tribunal's decision.

2. Imposition of Additional Duty of Customs Based on Retail Sale Price:
Due to the reclassification under CTH 85198100/85271300, the imported goods were subjected to additional customs duty based on the retail sale price as per Section 3(2) of the Customs Tariff Act, 1975, read with Section 4(A) of the Central Excise Act, 1944. The Tribunal upheld that the classification under CTH 85198100/85271300 was correct, thereby justifying the imposition of additional duty.

3. Confiscation of Goods and Imposition of Redemption Fine and Penalties:
The Commissioner had ordered the confiscation of the goods, imposed a redemption fine, and levied penalties under various sections of the Customs Act, 1962. The Tribunal, by setting aside the impugned order, effectively nullified these penalties and fines, granting consequential relief to the appellants.

4. Non-imposition of Penalty on a Co-noticee:
The department was aggrieved by the non-imposition of a penalty on M/s. King Shipping Services Pvt Ltd, a co-noticee. The Tribunal dismissed the department's appeal regarding this issue, maintaining that no penalty should be imposed on the said co-noticee.

Conclusion:
The Tribunal, following precedents and applying the General Rules for the Interpretation of the First Schedule to the Customs Tariff Act, concluded that the primary function of the multimedia speakers was amplification. Consequently, the goods were correctly classifiable under CTH 85182200, and the imposition of additional duty based on retail sale price was justified. The Tribunal set aside the impugned order, allowed the appeals with consequential relief, and dismissed the department's appeal regarding the non-imposition of a penalty on the co-noticee.